Department of Transport officers have warned that the construction quality of the South Coast motorway and its tunnel could be compromised following the state government's decision last week to award a key tender at a "bargain basement price".

Last week, the government appointed RUST-Ekert Ventures to the pivotal role of overseeing the estimated $600-700 million motorway project for around $5 million.

Details of the tender process and the competing bids are confidential, but industry sources have confirmed three rival tenders were short-listed -- all for amounts from two to three times that of RUST-Ekert.

The appointment is also notable because two of the three losing tenders had enormous local motorway project experience, between them managing the construction of virtually all Queensland's existing motorways.

The losing short-listed tenders were by Kinhill, CMPS & F P/L, and Connell Wagner P/L.

CMPS & F P/L, which unsuccessfully bid around $16 million, had previously managed construction of the Gateway Bridge Arterial Road, the Logan Motorway, and the Sunshine Motorway Stage 2. Connell Wagner had managed the building of the Gateway Bridge and the Sunshine Motorway Stage 1, and Kinhill is currently overseeing construction of the Yandina bypass, and Sydney's airport-rail link.

Connell Wagner and Kinhill have also been involved in preparing reports on the South Coast motorway.

The appointment is good news for the state government, given it had set aside around $10 million for project management in its motorway budget of $600-$700 million.

However industry sources said the budget $5 million price had been achieved because RUST-Ekert would not be responsible for many of the "inspection of quality" and audit tests that had been conducted on motorway constructions by previous project managers.

Departmental officers, who cannot be named, said the responsibility for inspecting the construction would be handed to the building, construction, and engineering companies soon to be contracted to the project -- a situation, they said, of Caesar inspecting Caesar.

The project director of the South Coast Motorway, Mr Mike Wilke, yesterday confirmed that RUST-Ekert would require contractors to maintain their own standards, but described this as "world's best practice".

"We depend on the successful contractor looking after his own quality assurance -- this is the way of the future and that's why there's a substantial difference in our price."

Mr Wilke said both RUST and Ekert were experienced in large scale project management. He said Ekert was currently managing the JORN radar project for the Department of Defence, and RUST was one the world's largest environmental and infrastructure service companies -- in the same group of companies as Pacific Waste Management.

"This is a substantially larger highway project than anyone's done before and that's why we've approached it in a somewhat different manner", he said.

Meanwhile one Queensland Transport source claimed Treasury had instructed Queensland Transport to accept the lowest bid -- no matter the department's assessment of the technical merits of each tender.

He said there was "genuine amazement" within the department that the job was being done for $5 million.

The Transport Minister, Ken Hayward, said departmental officers should take their concerns to the CJC if they thought anything was irregular in the tendering process.

Project managers call for construction and engineering tenders, provide information to bidders, oversee the project, and traditionally conduct inspections, tests, and audits, and assess contractors' claims for additional work.

RUST-Ekert have already taken out newspaper advertisements for contractors interested in the "design, construction, maintenance, operation, and possible financing" of the 60 km motorway and its associated 2.8 km tunnel at Daisy Hill. The project is due to be completed by 1999.

The government predicts the tunnel along with measures to protect koala habitats will cost $135 million, although engineers have disputed the cost and the tunnel's ability to protect the habitats.

The spokesman for the group VETO which is opposing the motorway, David Keogh, said a leading engineer had estimated the road's construction could blow out to $955 million.

He said the government could be tempted to take some dangerous short cuts in an effort to reduce costs.