Road rage over East West deal

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Australian Financial Review: Road rage over East West deal 16 April 2015

Victorian Premier Daniel Andrews and Treasurer Tim Pallas announce the East West Connect deal. Josh Robenstone

Up until this Wednesday, a signed, sealed and binding agreement with a state government might have seemed solid enough ground for a huge civil construction project in Australia to push ahead. The deal now done by the Labor Andrews government in Victoria to wriggle out of the $6.8 billion East West Connect tollway project means that can’t be taken for granted any more.

Thanks to the recklessness of Victorian Labor, contractors that take on big projects here must worry if grubby and parochial political calculations will scuttle a sealed deal if there is an election advantage to be grabbed. International construction giants might be alert to such things in volatile emerging nations. But for the first time, they might find themselves factoring in the cost of opaque and unpredictable politics in future projects in Victoria and elsewhere in Australia.

The Lend Lease-led East West Connect consortium brought together five contractors, including Spain’s Acciona and France’s Bouygues, and 29 banks who had worked together through nearly two years of preparation to build a toll road linking two other freeways in Melbourne’s east and west.

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