Contractors John Holland and Seymour Whyte have faced repercussions for the end-of-year celebration held inside one of Sydney's largest motorway projects in 2023.
Wind rushing through a Sydney Gateway tunnel reportedly toppled scaffolding onto guests, including a woman who suffered fractured ribs, sternum and vertebrae.
While an earlier risk assessment had been run past a Transport for NSW manager on secondment to the project, the event was not properly authorised and should not have occurred, the state government says.
"Had approval been sought, it would not have been granted," Roads Minister John Graham said on Wednesday.
"It's not acceptable to host Christmas drinks on an active work site."
Transport Minister Jo Haylen said she also had "deep concerns" about the unapproved event.
"We convey our apologies and concerns for those who were injured, physically and mentally, by what occurred at that event," she said.
The opposition has seized on the event fallout, firing a series of questions at Mr Graham as he deflected responsibility towards the contractors.
"Are you seriously contending that Transport for NSW and ultimately you as the minister are not ultimately accountable for transport construction sites across NSW if a private contractor is involved?" Liberal MP Scott Farlow said.
"It is the contractors' responsibility ... for keeping people safe there," Mr Graham replied.
"To continue to blur the line is irresponsible."
As a result of the bungled party, the contractors were issued a formal notice about the party and their joint venture's performance rating was marked down, he said.
Mr Graham said he only became aware of the incident in recent days.
John Holland said it regularly and safely hosted events such as community days on construction sites and noted the party was in a completed section of the project.
"We launched a thorough investigation immediately after this incident in 2023 and have taken steps to prevent this happening again," a spokeswoman said.
The Sydney Gateway, which connects the city's motorway network to Sydney Airport and Port Botany, fully opened in September after four years of construction.
More than 8000 people worked on the $2.6 billion project.
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