Herald Sun: James Campbell: East West Link payout a political landmine. 20 January 2015
The proposed confluence of Aldexandra Pde, Eastern Freeway, Hoddle St and the East West Link tunnel at Clifton Hill.
IN the final days of last year’s election campaign, Daniel Andrews told us if we voted for him and East West Link was scrapped we could relax — there was no way we were paying the consortium money.
“Be very clear about this, there will be no compensation paid,” he said.
Now the word around town is that taxpayers are going to be paying the consortium compensation after all.
Which, when you think about it, should surprise no one. By now the Government will have been told by just about every lawyer in Melbourne that its argument that the East West contracts are not valid stands very little chance of succeeding in a court of law.
The problem for the Government is that the minimum amount the consortium might accept to walk away might be more than it can politically afford.
In other words, at what point does this become a political disaster? $10 million? It could probably get away with paying that without sustaining too much damage. $100m?
That’s going to hurt, but it’s probably bearable.
More than $500m? How do you square a figure like that with the November’s “no compensation” promise?
You can already hear Matthew Guy saying “Brumby’s desal was a dog but at least we got a desal — this guy’s paid hundred of millions for nothing.”
And if the consortium holds out for a number north of $1 billion? The only way out of that will be legislation.
Legislating to invalidate contracts, leaving some of the biggest banks in the world out of pocket, would damage Victoria’s reputation for years.