The cost of building the West Gate Tunnel has blown out by more than $1 billion amid claims the state government is acting with “astounding hypocrisy” in rushing to sign contracts that lock in the controversial project.

Builders CPB/John Holland began moving into a construction compound near Whitehall Street in Footscray on Tuesday, in preparation to begin work on the northern tunnel portal in January.

The West Gate Tunnel project will now cost at least $6.7 billion to build, up $1.2 billion from previous estimates.

In 2015, Transurban and the state government claimed “no state funds” would be required for the project.

In 2016 the state government announced it was allocating $1.5 billion of taxpayer funding, but by Tuesday it had confirmed it was spending $2.7 billion.

The Greens and the state Coalition had vowed to block key legislation needed to help fund the toll road after planning minister Richard Wynne gave the project the green light.

Western suburbs Greens MP Colleen Hartland and Liberal MP Bernie Finn slammed the state government and toll road operator Transurban, warning they would use the upper house vote to help block the extension of CityLink tolls – a lynchpin of the project’s funding model.

But the state government has locked in taxpayers to pick up the bill should such a move occur, signing a contract that allows for the government to pay for the road and its operation if Parliament opposes the ten-year CityLink toll extension – on top of the  $2.7 billion the state has already committed to spending.

The necessary legislation for amendments to the CityLink concession deed will be introduced into Parliament before the road is complete in 2022.

The state government claims the $6.7 billion price tags reflect “massive improvements” to the project’s scope, including tunnels being longer than those in the original business case, additional noise walls and the creation of new open spaces.

The contract signing comes just days after almost 30 of Australia’s leading transport and urban planning experts slammed the West Gate Tunnel project as “an expensive strategic mistake” that the state government must immediately ditch.

Ms Hartland said the state government’s moves to circumvent Parliament are exactly the types of actions Labor criticised the Liberal party for taking with the East West Link.

“This just confirms that Daniel Andrews is in the pocket of Transurban. He would rather lump the taxpayer with a $6.7 billion bill to build this disastrous toll road than look at solutions that will actually reduce traffic and pollution,” she said.

“Why did Labor dump the plan it took to the last election? They should have gone ahead and built off ramps from the West Gate Freeway, to create a dedicated truck route to the port. It could have been built by now, and it would have cost a fraction of the West Gate Tunnel.”

The Australian Tax Office last week confirmed that Transurban did not pay a single dollar in tax in the 2015-16 financial year on its $2.5 billion income.

Transurban chief executive Scott Charlton said the project will add “an iconic addition to the city’s transport network”.

Premier Daniel Andrews said the project will deliver a long-overdue alternative to the West Gate Bridge, create thousands of jobs and construction starts next month.

Roads minister Luke Donnellan said the West Gate Tunnel will take more than 9000 trucks off residential streets in the inner west and provide a dedicated route to the port.

Mr Finn told Parliament that the project “is a stinker” and that locals have been treated “in an appalling manner” during the “sham” of an Environmental Effects Statement (EES) process.

“This is a process that has completely ignored the needs of locals in Hobsons Bay, Brooklyn and Altona and around areas such as those, and it is going to hurt them big time.”

Early works are due to start next month, with the first of two tunnel boring machines to be ordered in the next few weeks.

The project is due to be complete in 2022.

A ‘Say No to West Gate Tunnel’ rally will be held 11am-1pm Sunday at Brooklyn Reserve.