The Victorian government won't rule out legislating to escape a massive compensation claim over the scrapped East West Link tollway, but an expert says this is likely a bargaining tactic.
The Victorian government won’t rule out legislating to escape a massive compensation claim over the scrapped East West Link tollway, but an expert says this is likely a bargaining tactic.
Premier Daniel Andrews is in talks with the East West Connect consortium as he seeks to walk away from contracts signed in the final days of the former Napthine government to build the $6.8 billion tollway.
The Greens said they would support introducing legislation to specifically rule out paying compensation for the axed project, a move Mr Andrews is yet to rule out.
Monash University Associate Professor of politics Paul Strangio says public talk of such legislation may well be a bargaining tactic, as negotiations continue behind closed doors.
“It’s probably part of bargaining and negotiations as much as anything,” Prof Strangio told stated.
Prof Strangio said it sent a message that no compensation may ultimately be paid, and also said such legislation would likely be a last resort.
“I think that’s a statement for the public … to counter alarmist talk about the scale of compensation coming from some sections of the media,” he also said.
Prof Strangio said there were several unknowns to be dealt with – as the East West Link contracts had not been released publicly, and $3 billion in Commonwealth funding allocated to the project was yet to be reallocated.
Compensation for axing the $6.8 billion road tunnel could reportedly hit $1.1 billion, but Mr Andrews has refused to confirm the figure.
Also on Wednesday, Greens MP Ellen Sandell said the consortium was well aware of Labor’s plans to axe the project should it win the state election.
She said her party would support any legislation required to stop the project, and also prevent taxpayers from footing a compensation bill.
“The contractors … were put on notice months before they signed the contracts, months before the election,” Ms Sandell said.
“They should have known this was coming and the Greens will use our votes in both houses to legislate to stop East West.”
Mr Andrews said he wrote to the consortium before the election to tell them not to sign the contracts.
“We’re happy to talk to the winning bidders about costs that they’ve incurred, that’s fair,” Mr Andrews told reporters on Wednesday.
“But we’re not going to be a soft touch on this.”
When asked on Tuesday whether his government would legislate to avoid paying compensation, Mr Andrews responded “I wouldn’t rule that out”.
In December, the new government released a previously secret business case showing the benefit cost ratio for East West Link was just 45 cents for every $1 spent.