Melbourne's dumped East West Link project could now cost up to $700 million to axe.
The East West Connect consortium is prepared to walk away from the road tunnel project, but wants compensation of between $525m and $700m, according to News Corp Australia.
The contract reportedly contained clauses promising up to $1.2 billion if it was cancelled.
A spokesperson for Premier Daniel Andrews said the government was continuing to negotiate in good faith with the consortium and would not be doing this through the media. Opposition spokesman for roads and infrastructure Ryan Smith said this latest report highlighted the need for the government to reveal where negotiations were at.
“For a contract that apparently wasn’t worth the paper it’s written on, the government has been stuck in negotiations for four months,” he said.
“He needs to let people know where things are at.”
The Labor government is reportedly arguing the project’s contract isn’t valid and the consortium has to pay back $220 million already paid out. Mr Andrews promised before the November state election that taxpayers would not pay compensation to rip up the contract.
The East West Connect consortium’s standing position is it will not comment on negotiations with the state government.