A political stoush centred on East West Link has taken place with just two months to go before the State Election.

The $8 billion first stage of the project (between the Eastern Freeway at Abbotsford and CityLink at Parkville) has been the centrepiece of the Napthine Government’s infrastructure agenda.

Less than three weeks ago, the government narrowed down its bidders for the first stage to one – the East West Connect consortium that includes Lend Lease.

The government has stated it wants contracts for the project signed by October and Labor’s position was that, if elected, it would honour any contracts signed even though it holds significant concerns about the project.

Labor backflips on delivering East West

In a major twist and surprise, news broke earlier this month that Labor would dump East West Link if it wins the November election.

The opposition says it would not defend the state against a Supreme Court case that threatens the planning approvals for the project. The case, scheduled to be heard in December, has been instigated by Moreland and Yarra councils.

Citing legal advice from a former Federal Court judge and experts in both administrative and contract law, Labor believes that building contracts would not be valid if the Supreme Court finds in favour of the councils – something likely to happen if whoever is in government fails to defend the state in the Supreme Court.

“Labor will honour valid and legally binding contracts, but the advice of two of Australia’s most eminent commercial SCs (Senior Counsels) says a contract signed weeks before Victorians vote, for a project currently under Supreme Court challenge, cannot be entered into safely,” Opposition Leader Daniel Andrews said to The Age newspaper.

“This election will be a referendum between Labor’s plan for better public transport and Denis Napthine’s $8 billion dud tunnel.”

Government goes on the attack for project

Treasurer Michael O’Brien responded in fury to Labor’s new stance, saying that Daniel Andrews was putting the jobs of a few inner-city Labor politicians under threat from the Greens political party ahead of the 6200 jobs the East West Link project is expected to support.

“This threat to rip up contracts is the most reckless and irresponsible statement any Opposition Leader has ever made,” Mr O’Brien said.

“Ripping up a contract will cost the State billions of dollars in damages, compensation and refunds, send the State budget from surplus into deficit, and push up the cost of future infrastructure projects.

“He (Daniel Andrews) doesn’t care that ripping up contracts would permanently damage Victoria’s reputation with businesses, with investors, with lenders.”

Money and reputation are on the line

Further news reports suggest Victoria could face a bill of up to $600 million if Labor wins office and dumps the project after the state has already invested some $400 million into property acquisitions, soil drilling for engineering reports, legal and planning advice for the project.

In addition, the state could lose $3 billion in Federal Government funds pledged and earmarked specifically for East West Link.

Master Builders, alongside other employer and membership organisations, has been a strong supporter of the East West Link project, recognising the project’s capacity to stimulate investment and generate work in the building and construction sector.

“The State Opposition’s moves sound alarm bells for builders interested in delivering taxpayer-funded projects and jeopardises Victoria’s reputation as an attractive place to do business,” said Master Builders’ General Manager – Corporate Services, Viviana Hood.

“Our industry is thirsty for major projects that will strengthen building activity and create jobs.

“The Victorian Government is entitled and expected to prosecute its agenda right up until the election.

“It doesn’t serve our industry or our community if governments shut up shops for months at a time before every election, which is why we encourage the government to get on with the job of getting works underway on East West Link.”