A spokeswoman for the West Gate Tunnel Project, the government agency that's managing the works, said the state government was told late on Friday afternoon that Transurban was taking action and is not currently involved in the proceedings.

The government expects works to continue while the lawsuit is under way.

"This is a matter between Transurban and their builder and we hope they can come to a speedy resolution," the spokeswoman said. "We expect construction will continue while the matter is heard."

The project's builders CPB Contractors and John Holland have axed about 450 jobs in the lead-up to the legal challenge, with more than 300 still likely to be shed, according to threats made by the builders.

Tunnelling on the toll road was due to start about nine months ago but has not begun due to a dispute between the builders and head project contractor Transurban over how to process and dispose of soil contaminated with the toxic chemical PFAS.

The builders have claimed the soil issue is a force majeure event – an unforeseeable circumstance that makes it impossible to fulfil the terms of a contract.

Transurban has disputed this claim and has reserved its rights to seek damages from the builders over the late delivery of the road.

The project is now set to be finished in 2023 instead of 2022, which will probably mean Transurban loses tolling revenue.

However, the company, which is tipping in $4 billion to build the new tollway linking the West Gate Freeway in Spotswood and CityLink in Docklands, will benefit from a 10-year extension on CityLink tolling, which was enabled after the government amended the concession deed.

Tolls on CityLink will increase by 4.25 per cent every year until 2029, then rise by CPI.

By 2044-45, Transurban stands to make an extra $37 billion in nominal terms ($7.5 billion in present value terms) as a result of the new tolls.

Michael Fraser is a director of Diligence Research, which conducts research into ethical investment and monitors Transurban closely.

He said the company was a "well-resourced ASX-listed company" that should have known the environmental risks involved in building the West Gate Tunnel. The company should have picked up the additional costs of dealing with PFAS, rather than taking its builders to court, he said.

And he said it was imperative the Victorian government held fast on its promise not to bail out the project. "Victorians have paid enough," he said.

Mr Fraser said investors and superannuation funds in particular that invested in Transurban "should be asking why Transurban chose not to inform the market of this legal proceeding, and really question if Transurban meets the criteria for [ethical investment]".

Builders and the West Gate Tunnel Project notified workers of redundancies in a letter sent in May, warning that "operational requirements resulting from the current PFAS situation" would lead to a "major change that is likely to have a significant impact on certain employees across all aspects of our project".

Transport Infrastructure Minister Jacinta Allan blasted the project's builders and Transurban over the job losses, raising the possibility they were playing a tactical game aimed at extorting the Victorian taxpayer.

"This behaviour that we are seeing most recently from these companies and also Transurban is absolutely disgraceful," Ms Allan said after the cuts.

Earlier this year, Transurban said "evolving" Environment Protection Authority guidelines on how PFAS should be managed had caused delays on the project.

During the project's environmental effects statement process in 2017, PFAS chemicals were treated as unregulated contaminants and PFAS soil could be reused, a spokesman said.

But a change in policy meant that most, if not all, of the project's 2.3 million tonnes of waste must now be tested for PFAS and classified by the EPA, he said.

The tender process for landfill operators bidding to accept the soil has been delayed, with environmental and planning approvals still yet to be granted.

The Bacchus Marsh community is opposed to any of the project's soil being sent to a local landfill, Maddingley Brown Coal, and has threatened to launch legal action to stop this going ahead.