Governments rarely have the opportunity to line up good policy with good politics. This happy conjunction is open to the Andrews government if it does two things. First, pass legislation amending the Audit Act to deliver on its pledge to give the Auditor-General the power to scrutinise public-private partnerships, including the power to "follow the dollar" into the activities of the private partner. And second, establish a forensic audit of the now-aborted East West Link PPP signed by the previous government.

Enough details have already come to light as a result of the negotiations conducted by government-appointed advisers (merchant banker John Wylie and corporate lawyer Leon Zwier) to allow the government to wind back the upfront payments for breaking the contract from $1.1 billion to $420 million.

Credit:Penny Stephens

The original figure was based on paying the private partners the present value of the expected profits over the 25-year life of the project. The lower figure was based on the Lend Lease-led consortium costs of $160 million to cover design and sunk construction costs, $179 million in fees to the financial engineers who put together the contract and $81 million to the other financial engineers who put together a $3 billion loan facility to cover the construction cost.

The Australian newspaper's financial analyst, John Durie, wrote in the Murdoch publication that the $160 million design and construction costs can be justified, "but the litany of fees to cover project arranging and the like is frankly unjustified ... That stinks and should be changed on future PPP projects." Elsewhere in the broadsheet and in the popular tabloids there was a hysterical campaign against Labor's decision to break the contract.