East West Link consortium anger at contract breach

Herald Sun: East West Link consortium anger at contract breach Annika Smethurst December 20, 2014

The East West Link consortium is seeking compensation after the project was terminated.

THE East West Link consortium has fired its first shot in the looming legal war over the ditched roads project.

The consortium wrote to the State Government last week and officially issued breach notices for the $6.8 billion tollway project.

It is understood it told the Government it will seek a multi-million-dollar a day sum in compensation.

Less than a fortnight ago, Premier Daniel Andrews wrote to East West Connect, instructing it to immediately suspend work on the project.

State Government spokesman Chris Reilly confirmed to the Sunday Herald Sun the breach notices were received on Friday.

Last month the Herald Sun revealed Victoria could incur a $1.1 billion compensation bill while a settlement over the broken­ contract was ­negotiated.

The formula takes into account money being contributed by the consortium, both debt and equity, at the time the contracts were terminated.

Workers at the Linking Melbourne Authority and East West Connect are said to be “very upset” with the termination of the project and continue to hold talks with the Premier’s office.

Shadow Treasurer Michael O’Brien said the consortium would face mounting costs and it was time for Mr Andrews to understand the “rule of law even applies to him and his Government”.

“Daniel Andrews’ reckless decision to rip up the East West Link contracts will come at a very high cost,” he said.

A spokesman from East West Connect said the consortium was unable to comment “given the confidentiality obligations under the consortium’s contract with the State of Victoria”.

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