East West Link in limbo

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Construction Industry News: East West Link in limbo. Friday, 26 September 2014. Marion Lopez

Pressure is mounting for the Victorian government to sign contracts for the construction of the $6-8 billion East West Link toll road before the start of October to avoid incurring project cost blow-outs of $145 million.
According to The Age, government lawyers said the project faced losses of €100 million ($A145 million) from foreign exchange risks unless contracts were signed by October 1.

They were addressing the Court of Appeal during a hearing brought by Brunswick resident Anthony Murphy, who accused the state of breaching consumer law by misrepresenting the road’s economic benefits to the public.

In his unsuccessful court case, Brunswick argued that the project – which business case was not released – would come at a multi-million dollar loss for taxpayers.

While the court reviews the appeal, the newspaper said the Victorian government agreed not to sign the contract or compulsorily acquire any properties it had issued notices for until 10am next Monday, at which time Justices Geoffrey Nettle, David Beach and Joseph Santamaria will hand down their verdict on whether Murphy’s failed case against the project should be reheard.

The potential $145 million cost blow-out adds to the $500 million kill fee Fairfax Media said was sought by the project’s builder – the East West Connect consortium – in the event that Labor wins the November state election and holds to its promise of blocking the project.

The fee was calculated at 10% of the $5 billion construction costs of the project.

This is boosting the contentiousness of the project, with members of local government and the Senate increasingly pressing the state government to release its business case.
The Age reported that Planning Minister Matthew Guy was recently ordered by the Supreme Court to disclose to the Moreland and Yarra councils the documents he read on the project prior to approving it.

It is also reported that the Senate is pushing for the government to table the project’s business case on October 2.

CIN will update readers on the Court of Appeal’s verdict and developments regarding the East West Link next week.

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