East West Link: Government will not rule out legislating to avoid paying compensation

ABC Victoria – East West Link: Government will not rule out legislating to avoid paying compensation. 20 January 2015

Victorian Premier Daniel Andrews has refused to rule out introducing legislation to avoid paying compensation over dumping Melbourne’s East West Link project.

The Government is in talks with the companies contracted to build the road and has refused to discuss the amount of compensation it could be facing under the project’s secret contract.

In Opposition, Mr Andrews maintained there would be no compensation payable because the contract was not valid.

He said he would not rule out passing legislation to avoid paying compensation.

But when he was asked by journalists whether he would pass retrospective laws to invalidate the contract, Mr Andrews would not be drawn on what sort of legislation was being considered.

“I’m not going to rule [legislation] out,” Mr Andrews said.

“[But] I’m not going to be running a commentary on that – other than that … I want to be very clear with you: I’m not ruling that out, I’m not ruling that out.”

Opposition spokesman Michael O’Brien said the move would be extremely reckless.

“He is just saying it is not safe to do business in Victoria,” he said.

“[Mr Andrews] is introducing a huge element of sovereign risk.

It means that Victorians will pay a risk premium on every piece of infrastructure going forward if Daniel Andrews chooses to use the Parliament to make good on a promise he can’t deliver.”

East West Link compensation negotiations

Earlier today, Deputy Premier James Merlino confirmed the Government was in negotiations with the companies and that experts had been hired to help it get the best possible deal.

The Herald Sun newspaper reported that the consortium responsible for the road’s construction wants at least $1.2 billion in compensation for the cancellation of the project.

But Mr Merlino said he would not say whether compensation would be offered.

“I’m not going to talk about figures reported, we won’t be conducting these negotiations through the media, we’ll do so in good faith with the consortium,” Mr Merlino said.

“We’ll wind up this $2.1 billion black hole dud project and we’ll do so as quickly as possible.”

Opposition Leader Matthew Guy said the Government has brought the situation upon themselves.

“Labor knew their claim that [East West Link] had no binding contract was wrong,” Mr Guy said on Twitter.

“It will now cost $1 billion to scrap a roadway that Melbourne needs.”

The Government ordered the suspension of all work on the project in December last year.

Mr Merlino said the Government always planned to negotiate with the building consortium.

“There were always going to be negotiations with the consortium, we’ll conduct those negotiations in good faith,” he said.

“We need to stop this project, because this project at its heart has a $2.1 billion black hole – a black hole delivered by the formal Liberal government – this would cost Victorians over a lifetime.”

Mr Andrews said the Government would have more to say on the project in the future.

“There will be a time, be in no doubt for us to talk about these contracts, and the mess – the unmitigated mess that the previous government left for us – and let me tell you, I don’t think that day will be a good day for Mr Guy or any of his colleagues.”

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