Up to fourteen senior management personnel overseeing the cancelled $7 billion East West Link project in Victoria have been sacked despite the government in that state having previously been guaranteed that no forced redundancies would occur as a result of the organisation charged with overseeing the project being wound up, media report say.
News Ltd has reported that up to fourteen executives at the Linking Melbourne Authority which oversaw construction of East Link and the Peninsula Link as well as the initial stages of East West Link were issued with redundancy notices on Friday.
Whilst the new Labour government announced its intention to wind up the LMA on January 7, the state’s Acting Minister for Roads Tim Pallas gave assurance at the time that staff from the authority would be offered redeployment and assistance in transitioning to new roles.
The government denied the notices constituted a brake of this promise, saying redeployment opportunities would still be given and that the notices were simply issued to the relevant personnel in order to outline their options and entitlements.
“The government is continuing to work with all members of the Linking Melbourne Authority staff including the executive to either assist them with redeployment where positions are available … or support staff that choose to take a redundancy,” a spokeswoman for the government is quoted as saying in The Australian.
The latest reports come amid scathing criticism of the project’s cancellation amid fears compensation for the successful bidders could run into more than one billion and more so that the whole debacle would destroy investor confidence surrounding the state.
Property Council of Victoria Executive Director Jennifer Cunich warned recently that ripping up signed contracts would have serious ramifications for Victoria’s business community, and added that if this or any other existing contract is cast aside, bidders will need to be compensated for their time and resources spent on the project whilst an extensive communication campaign would be required to explain why the private sector should trust any future government assurances.
“Sovereign risk is no small matter and any move to abandon the Government’s legal obligations risks spooking future local and international investment,” Ms Cunich said recently.
The latest developments also come amid revelations last week former Treasurer Michael O’Brien promised the successful consortium in a previously secret ‘side letter’ it would get compensation from the government in the event the project was cancelled irrespective of the results of a looming court case being brought by two city councils challenging the validity of the contracts for the project, which were signed in the dying days of the previous Liberal state government.
According to the aforementioned report, the redundancy process is expected to take six to eight months.
Opposition Roads spokesman Ryan Smith accused the government of betraying LMA staff.
“It seems Daniel Andrews’s only major plan in this area is to stop major infrastructure projects and sack people,” the report quotes Smith as saying.