Government in Siege Mode

The Napthine Government has gone into siege mode to withstand the barrage of public criticism and legal attacks on the East West Link. Having risked its political future on this one project, the Government has been forced to resort to legally desperate tactics and shortcuts to try to reach its goal of a binding contract by the end of October.

The Government was forced to use its trump card of the Cabinet FOI exemption in two cases in its desperation to keep the East West Link Business Case and related consultant report from public exposure. The Business case was seen in public for the first time, wheeled into the Court room on a trolley – perhaps the same one that had wheeled it through the Cabinet room to gain exemption.

The Government is desperately scared this document will ever be released -suggesting that its contents are damning. From what has come out so far, it is clear that many of the consultants thought the methodology used had been highly creative to achieve a positive return on the project – rather than the 80 cents in the dollar by traditional methods.

The Government must now sweat for a fortnight waiting for the judgement from Justice Croft in the Supreme Court case brought by Brunswick resident Anthony Murphy. The first issue being determined is whether the LMA is engaged in business in the way it has set up the toll road contract taking the risk from the private contractor. The Government has been forced to give an undertaking not to sign a contract until after 16th September.

The separate Supreme Court case brought by the Moreland and Yarra Councils, challenging the planning approval, has been adjourned until December 15th, which is after the election. To avoid making disclosures, the Government has delayed lodging its defence in this case until December 5th. This is potentially fatal to its chance of reaching a binding contract before the election.

With these proceedings in limbo, nothing will be resolved and a cloud of uncertainty will hang over any agreement, despite being signed. Construction cannot proceed if the planning approval is invalid. The situation is the same as if you retained builders to add a storey to your house but if you failed to get a planning permit they wouldn’t be able to start work.

If there is a change of Government, the new Minister could review the case and determine whether the approval process had been properly conducted or the conditions of the approval fully met and whether the case was defendable. If a defence is then not lodged or the Council wins in Court then the planning approval would be invalid.


The siege took a literal form on Thursday night when a much hyped Liberal Party fundraiser was blockaded by protesters. The Liberal Party was targeting the infrastructure industry for donations of $10,000 a table (just below the disclosable limit). This was a blatant exercise in selling access to Ministers, many of whom were actively engaged in rushed decisions on major contracts.

As Gay Alcorn highlighted in The Guardian this week the political donation rules that apply in Victoria are far weaker than those in NSW. Yet it is in NSW where the corruption has been exposed by its ICAC with a series of MPs being forced to resign over $10,000 donations they had received and Premier Barry Farrell also forced into retirement for “forgetting” a $3,000 bottle of Grange.

The Liberal Party sold tables for $10,000 each to raise money from the infrastructure industry and related consultants to fund its election campaign. The attendance list is a closely held secret but the protest out the front made it very clear that the East West Link would be opposed every step of the way. However a number of people were observed going into the dinner, including a senior public servant with a strong conflict of interest. Sadly, Victoria’s IBAC lacks similar powers to investigate.

The politicisation of fundraising directly linked to the East West Link raises a new range of hurdles for the Government to overcome. Its response is to bunker down and hope the issues go away. The contractors who were at the dinner will now be vividly aware of the protracted community resistance that they face every step of the way if they have to build the project “within a barbed wire fence ringed by police” as Andrew Kelly memorably put it at the Assessment Committee hearings.

The pressure on the LMA is starting to show with a series of bad stumbles in recent public communications and it is making little progress with delivering on the conditions attached to the planning approval. The LMA has been stripped of responsibility for the Western Section of the EWL which is to be overseen by a new body the “Office of Moving Victoria”.

Another mistake was the hasty declaration of the “Project Area” on July 30th. This was meant to reflect the reference design, which has had a boundary set for over a year. Yet the Minister’s declaration was badly drafted and failed to include four properties on Alexandra Pde for acquisition to enable construction of the “side track” (which the Assessment Committee recommended should not be built). A new Gazette was hastily produced on August 21st and more notices issued to landowners to acquire this land – despite the possibility that the Assessment Committee recommendation may ultimately be accepted by the Minister.

The battle for proper assessment of major projects was also waged in Canberra. Malcolm Turnbull was adamant that the era when major projects could be approved without a public cost benefit study were over. Of course he was referring to the NBN and not the East West Link and his fellow Liberals accordingly took the opposite view.

The Senate debated the Land Transport Infrastructure Bill which was needed to extend the Roads to Recovery funding. Amendments by Labor and the Greens to require public cost-benefit analysis of any project worth more than $100 million were narrowly defeated when Ricky Muir sided with the Government.

The Victorian Parliament resumes on Tuesday 2nd September and with only three sitting weeks left, it appears the Government has abandoned any attempt to make a contract binding by passing legislation. Its next step is to announce a preferred tenderer but with so many unresolved problems and opposition on every front, it is rapidly running out of time.

Andrew Herington