East West Link will cost taxpayers 20c for every dollar invested, court told

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Guardian: East West Link will cost taxpayers 20c for every dollar invested, court told. Melissa Davey. Monday 29 September 2014

Last-ditch battle to stop signing of contracts for controversial $8bn roads scheme goes to high court

The East West Link was described as a ‘loss-making project of significant proportions’. Photograph: Julian Smith/AAP

The Victorian high court has been told the $8bn East West Link project will lose the state government 20 cents for every dollar invested, costing taxpayers hundreds of millions of dollars.

Earlier on Monday, the court of appeal ordered a retrial of the case against the roadway brought before the court by Brunswick resident Anthony Murphy, who said the economic modelling for the project was based on misleading figures. It overturned a decision by the supreme court, which last week rejected the case.

But the court of appeal did not grant an injunction sought by Murphy’s legal counsel, Ron Merkel QC, to immediately stop the Victorian government signing contracts for the East West Link project until 17 October.

Murphy hopes the high court would grant the injunction in the hearing that is underway, and says the project lacked transparency because the business case had never been released by the government.

“This is about procedural fairness and full disclosure,” Merkel told the court. “If this contract is signed, it is committing Victorians to hundreds of millions of dollars in loss.”

Merkel described it as a “loss-making project of significant proportions” and that orthodox economic modelling had shown the government would lose “20 cents for every dollar invested”.

Flanked by the prominent Australian barrister and human rights activist Julian Burnside, Merkel told the high court he had received an affidavit that said the government was ready to sign contracts “as soon as possible”.

While lawyers for the government said they would not sign the contracts before 4pm,

opponents to the project fear they will be signed before 5pm on Monday if the 17 October injunction is not granted.

Counsel for the government told Justice Susan Crennan that delaying the contract signing would cost the consortium that won the tender for the project $435,000 a week.

“The consortium is ready and willing to enter into the contract,” Crennan was told. “It is an innocent party that has done no more than comply with the state in the tender process.”

The government’s lawyers also argued an injunction could cost taxpayers millions if interest rates rose before the contract was signed.

But Merkel argued that was not a good enough reason to reject an injunction.

The hearing continues.

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