Victoria May Have to Pay Queensland for East West Link

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Friday, February 20th, 2015
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The Victorian State Government may have to effectively pay compensation to a company owned by the Queensland government for the cancelled East West Link road project, according to media reports.

According to the Herald Sun, the Queensland government owned Queensland Investment Corporation holds a 30 percent stake in East West Connect consortium, which was contracted by the former Napthine government to build the first stage of the $6.8 billion toll road last year.

A QIC spokeswoman reportedly told the paper it continued to be in talks with the Victorian Government, and that the contract with the previous government included compensation if the project failed to go ahead.

“The Victorian Government has entered into binding agreements with the consortium, which include compensation should the project not proceed,’’ the paper quotes her as saying.

Since coming into office and cancelling the massive project, the new Victorian Labour Government has been in negotiations with East West Connect, which is led by Lend Lease and includes French construction company Bouygues, Spain’s Acciona Infrastructure and Lend Lease’s financing arm Capella Capital.

Having previously insisted the contracts awarded to the consortium regarding the new project late last year were not legally binding and that no compensation would be paid, State Premier Daniel Andrews now concedes a ‘modest’ settlement may be reached and that it was fair to cover costs already incurred on the project but not to compensate for lost future earnings.

State Opposition Leader Matthew Guy said the new Labour Government in Queensland should name their next freeway the Daniel Andrews Freeway because compensation paid to QIC as a result of the decision not to proceed with the project would mean Victorians would effectively end up funding infrastructure in Queensland.

The latest development comes as Andrews announced earlier this week that the government had brought forward $100 million in new funding for the planning to deliver on his promises to remove 50 dangerous level crossings as well as the creation of the Level Crossing Removal Authority which would act as a dedicated team of engineers, surveyors and other experts to plan the removal of the crossings.

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