Contract Compo Farce

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Herald Sun: Editorial – Contract Compo Farce. 20 January 2015

PREMIER Daniel Andrews has tried to argue that the East West Link contract is “not worth the paper it’s written on”, yet there are growing indications taxpayers could be forced to pay hundreds of millions of dollars to scrap the supposedly worthless document.

The consortium signed to build the controversial road project is pushing for compensation of more than $1 billion if Mr Andrews honours his reckless election pledge.

The Herald Sun has confirmed negotiations are under way between the Government and the consortium. These talks have been complicated by disagreement between consortium partners.

While the Government held early hopes any compensation bill could be heavily reduced because some consortium partners are eager to win future state government contracts, it is understood not all members are so ready to fold. If a massive compensation bill lobs, it will be a catastrophe for taxpayers — one entirely of Mr Andrews’ making.

While the Premier maintains his threat to tear up the contract won Labor the state election, it is arguable his party won despite his East West backflip, not because of it.

The tear-up could come at a high political cost. For just as companies will likely be wary of dealing with his Government, future voters must also be left with lingering doubts about Mr Andrews. And a fat compensation bill might just give them a billion or more extra reasons to punish Labor at the polls.

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