The Age: Daniel Andrews won’t rule out using parliament to block East West Link compensation. January 20, 2015. Richard Willingham, State Political Correspondent
‘Dud project’: An artist’s impression of East-West Link, which Daniel Andrews has vowed to scrap.
Premier Daniel Andrews could use special legislation to avoid paying more than $1 billion in compensation to the East West Link consortium.
The state government may have to make the payments to the East West Connect consortium, as flagged by then treasurer Michael O’Brien before the election last year.
On Tuesday, Mr Andrews would not rule out using legislation to avoid paying compensation.
The Greens, who hold a critical five votes in the upper house, would support any such move.
“The companies have been on notice for months, before they signed the dodgy contracts, and the public at the election sent a strong message they wanted money used for public transport instead,” Greens Melbourne MP Ellen Sandell said.”We will use our power in both houses to push for public transport, not toll roads,” she said.
Negotiations between the state government and East West Connect are continuing over the scrapping of the project.
Before the state election, Mr Andrews said there would be no compensation for the consortium and the contract was “not worth the paper it was written on”. He said, however, that there could be “modest” payments to cover some of the costs incurred by the consortium.
“I will not break the commitments I made before November 29. We are not building this project, it is a dud project,” he said on Tuesday.
The Premier, speaking in Marysville, moved to turn the pressure back on the Coalition for “irresponsibly” signing the contracts weeks before the election, saying the project was “rorted”.
“Much of this, indeed all of it, might have been avoided if the former government had not arrogantly signed these contracts,” Mr Andrews said.
He played down any concerns of sovereign risk, saying it was not an issue.
Opposition Leader Matthew Guy slammed Mr Andrews for ripping up the contract at such a high cost.
“Daniel Andrews wants to spend $1 billion to get out of an infrastructure project that will only cost Victorian taxpayers $2 billion to build,” Mr Guy said.
“Daniel Andrews gave a solemn promise before the November election that Victorians under his leadership could cancel the East West Link without any compensation being paid. That’s clearly been shown to be a lie.”
The state government contribution to the $6.8 billion stage one of the project was set to be $2 billion, with $1.5 billion from the Abbott government and the rest to be financed by East West Connect.
The Victorian government would then have had to pay a quarterly availability charge to the consortium for 25 years.
The Labor government has engaged prominent financial adviser John Wylie and leading commercial litigator Leon Zwier to advise it over negotiations with the consortium to scrap the contract.
Sex Party MP Fiona Patten said the government’s approach was laughable given it had repeatedly said the contract was not worth the paper it was written on.
“The question needs to be asked of the Premier and his deputy – why are they negotiating a settlement to a contract that was ‘not worth the paper it was written on’ in the first place? Sounds pretty ridiculous to me,” Ms Patten said.