East West Link: Victorian Government signs tunnel contracts; Labor decries 'desperate' move

Updated

The Victorian Government has signed a multi-billion-dollar contract to build the first stage of the East West Link tollway in a move described by the Opposition as an act of "arrogance and desperation" ahead of an election.

Just hours after a bid to delay the project was thrown out of court, the consortium East West Connect also signed the agreement for the $5.3 billion project connecting the Eastern Freeway to Citylink.

Labor said it would not honour the contract if it wins the November state election.

But Premier Denis Napthine called it a "game-changing" day for the state.

"This is a day we take a significant step in decongesting Melbourne, boosting public transport productivity and efficiency and creating 3700 jobs," he said.

Dr Napthine rejected suggestions the deal was signed in a rush and refused to confirm if there was a "kill clause" built into the contract, giving the consortium a hefty compensation payment if the contract was ripped up.

"If this contract is irresponsibly and stupidly torn up by Daniel Andrews and the Labor party they will immediately have to give $3 billion back to the Commonwealth Government," he said.

"But the biggest losers from tearing up this contract will be the people of Victoria."

The Premier said more details about the contract and the project's final design would be released this week.

Contracts not legally binding: Labor

Deputy Opposition leader James Merlino told 774 ABC Melbourne the Premier had shown "breathtaking arrogance and desperation" and the contracts were not legally binding.

"This is an unelected Premier signing a sham contract four-and-a-half weeks away from care-taker mode," Mr Merlino said.

"This is a contract not entered into safely. There's legal advice that this so-called contract is not worth the paper it's written on.

"There's proceedings in the High Court, there's proceedings in the Supreme Court, it's based on dodgy traffic modelling.

Mr Merlino said Labor would not honour the contract because it was legally unsound.

Greens leader Greg Barber called on the Government to release the details of the contracts.

"The full contents of the contracts must be made public immediately, right now, today, so the voters can see what the Libs have gotten us into," Mr Barber said.

"The Greens are resolute that we won't support any government that intends to proceed with the road."

High Court injunction to delay tunnel project fails

Brunswick resident Anthony Murphy had applied to the High Court for an injunction to stop the contracts being signed before October 17, when he was to appear before the court to ask it to block the acquisition of properties to build the link.

The Government had argued the delay would generate a cost blowout of $145 million.

Mr Murphy's legal representative, Ron Merkel QC, told the court the signing of the contracts would commit Victoria to hundreds of millions of dollars in losses.

"This is a project that will lose 20 cents in every dollar invested," Mr Merkel said.

But the legal counsel for the East West Connect, Michael Wyles QC, said it stood to lose about $435,000 a week from today if the contracts were delayed.

He said the consortium was an "innocent" third party.

Victorian Solicitor-General Stephen McLeish SC said the project was at risk of interest rate fluctuations and foreign exchange rates.

But Mr Merkel said risks were not the same as actual losses.

High Court Justice Susan Crennan said the respondents stood to lose more than Mr Murphy if an injunction were granted, and rejected the application.

Murphy granted retrial in separate case

Earlier on Monday, the Court of Appeal granted Mr Murphy a retrial of a separate case opposing the project on the grounds the Government had misrepresented the economic benefit.

That court refused to grant an injunction and a retrial will be heard at a later date.

Mr Murphy said he was extremely happy with the Supreme Court's findings.

"The judge has found in the Appeal Court that we were denied procedural fairness in the lower court, principally because we were denied discovery," he said.

"As part of the discovery process in the retrial we'll be demanding to see the business case, because for too long the Government's kept that secret.

"We suspect there's a lot of stuff in there that they want to be kept hidden, because it goes to the heart of the misleading and deceptive conduct the Government has been engaging in from the very beginning."

Attorney-General Robert Clark said the decision did not alter the Government's plan to push ahead with signing the contracts.

"The Court of Appeal's decision to order a further hearing doesn't say anything about the strength of Mr Murphy's case," he said.

"It simply says the trial judge didn't follow the right procedures in how the case was handled, and the court's therefore sent the case back for more evidence and legal argument.

"The Court of Appeal's already ruled Mr Murphy's not entitled to have the project delayed. Nothing in this morning's decision changes any of that.

"The State's very confident there is no justification in those legal proceedings. We'll be continuing to defend the case vigorously."

The East West Link is an 18-kilometre cross-city road connecting the Eastern Freeway to the Western Ring Road in several stages.

The first stage of the project is a $6-8 billion tunnel linking Parkville to Clifton Hill, and planning and preliminary drilling works are already underway.

Topics: government-and-politics, state-parliament, states-and-territories, courts-and-trials, vic

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