Dumped East West Link Could Cost up to $700m 2

Wednesday, March 11th, 2015
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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.

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  1. David McKinnon

    Can everybody please note that this compensation claim is not in any way to benefit any of the workers laid off as a result of the cancellation. The compensation is only going to benefit corporate profits and shareholder dividends. The workforce, who the Labor party purports to represent, and who bankrolled his political aspirations for years, are the ones being done over by this political grandstanding for a few thousand votes. What is Dodgy Dans plan to pay out the 700 million, of course we will tax or levy something to pay for it, rest assured it's not coming out of his pocket.
    Meanwhile most of the infrastructure design industry in Melbourne has sunk into a quagmire of just hanging on, my work for the next 2 years cancelled with no compensation, as were several hundred of my colleagues, others are on reduced hours. And the grade separations and westgate distributor to replace this project are still months away from providing any form of employment replacement. We truly are becoming the "rustbucket state". The official employment dont show a true state as many are under employed or over asset rich, hence don't register on Centrelink's system.

  2. David McKinnon

    And double that value with lost employment and flow on effects of second party suppliers too.