Labor stakes all on dislike of East West Link project

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The Age: Labor stakes all on dislike of East West Link project, September 11, 2014, Josh Gordon, State political editor for The Age.

If it wasn’t clear before, it is now: this election will be a referendum on the East West Link.

If Labor wins on November 29, court action against the road is likely to succeed.

This would in turn, according to legal advice, render the planning approval invalid, meaning any contracts entered into before the election would be “unenforceable”.

If all goes to plan, Labor would then be able to technically argue that it hasn’t ripped up a legally valid contract.

Even so, this is an incredibly bold move. The stakes could not be higher. Labor is so confident the project is a dud it is prepared to risk the opprobrium of the business community and expose the state to potential litigation by not proceeding with the contract.

As the legal advice itself points out, even if the contract is invalid, this will not necessary protect the state against compensation claim. Given the amount of time, money and effort spent so far by the companies bidding to build the road, such claims would be likely to be significant.

For all the risks, Labor has much to gain. Having slammed the project for months in opposition, there is no longer any possibility that Labor will be able to “own” the project if it wins. At best it might be able to whinge for a few months about the cost and delivery, but effectively it would be saddled with an expensive infrastructure project for years that it has told us does not stack up.

In stark contrast, although the Coalition government made bold claims about cost blowouts associated with Labor’s regional rail project when it formed government, it was never opposed to the concept, per se. This has, to some extent, allowed the government to claim the project.

Under these circumstances, Labor had to find a way out. It now has an argument, although whether it will ultimately wash remains to be seen. Its hope is that the very act of making the announcement will convince the winning bidder to delay signing, given the obvious risks.

Beyond this, by finding a way out of any contract, Labor is forcing the Coalition to keep talking about a road that simply isn’t that popular. From now until the election, the government will be spending much time talking up the sovereign risk argument, but to mount its case it will need to keep talking about a road that, rightly or wrongly, many Victorians don’t seem to want.

Labor’s hope is that by doing this it will be able to talk about its alternative proposals for public transport and level crossing upgrades, creating a clear battle line between the two parties and forcing the government further into a corner.

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