Victoria Govt Signs $5.3b Link Contract

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The $5.3 billion contract for the first stage of Melbourne’s controversial East West Link project has been signed, but the deal could be torn up in just two months.

The Victorian government and the East West Connect consortium signed the contract immediately after a resident failed to get a High Court injunction to stop the deal on Monday.

Premier Denis Napthine refused to say how much Victorian taxpayers would contribute to the 25-year deal, a public private partnership the consortium said was worth $5.3 billion.

He would also not reveal if there was a penalty clause in the deal – reportedly $500 million – if Labor won the November 29 election and tore up the contract.

“The contract will be made publicly available at an appropriate time,” Dr Napthine told reporters.

Deputy opposition leader James Merlino said signing the contract just before the election showed “breath-taking arrogance” and desperation.

“This is an unelected premier signing a sham contract four-and-a-half weeks from caretaker mode. This is a dodgy process from beginning right through till now,” Mr Merlino said.

He declined to say how much Labor was prepared to pay should it tear up the contract.

“We don’t acknowledge this is a fair-dinkum contract,” he said.

Dr Napthine said if the project fell over the state would have to return $3 billion to the federal government.

High Court Justice Susan Crennan rejected Brunswick resident Anthony Murphy’s bid for an injunction to stop the contract signing, saying if it was granted the loss suffered by the government and its preferred builder was greater than any potential loss Mr Murphy could suffer.

“More is at risk for the respondent and intervener if the injunction is granted,” she said.

East West Connect’s legal counsel Michael Wyles QC had told the court a delay in signing the contract would cost the group $435,000 per week from Monday.

Ron Merkel QC, for Mr Murphy, told the High Court that if the project proceeded it would cost Victorian taxpayers 20 cents of every dollar invested.

“If this contract is signed it’s committing Victoria to hundreds and hundreds of millions of dollars of loss on its own economic modelling, by its own standards,” Mr Merkel said.

Mr Murphy had already lost an injunction bid in the Court of Appeal last week but still plans to seek special leave to appeal that decision.

The Court of Appeal has granted him a retrial in his attempt to stop the project after finding he was denied procedural fairness.

There is also a separate Supreme Court challenge to the project by two-inner city councils.

Mr Murphy denied he now had to rely on other challenges to stop the project.

“The judge noted that there are other forms of relief which are lesser than the one we were asking, that is corrective advertising,” he said.

Federal Melbourne Greens MP Adam Bandt said the Greens would fight “tooth and nail” to stop the project being built.

The East West Connect consortium – comprising Lend Lease, Capella Capital, Acciona and Bouygues – will build the project’s first stage, a 6.6km eastern section joining the Eastern Freeway with CityLink.

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