Prime Minister Tony Abbott has issued a thinly-veiled rebuke to Canberra Liberals about their plan to tear up a light rail contract if they win the 2016 ACT election.

On Wednesday, ACT Opposition MLA Alistair Coe said the Canberra Liberals would cancel construction of the $800-million project if they win the election next year.

His comment was made after the Victorian State Government announced that it would pay more than $300 million to cancel existing contracts for Melbourne's East West Link.

Mr Coe said that decision paved the way for his party to cancel any contracts the ACT Government signs for light rail in Canberra.

But today, when asked what his thoughts were on Mr Coe's plan, Mr Abbott seemed unimpressed.

"The position of this Government is that contracts should be honoured," he said.

But the ACT Government warned the cancellation of the light rail contract they plan to sign early next year could cost taxpayers hundreds of millions in wasted compensation.

The Government wants construction on the light rail project to start by the middle of the year, but the next ACT election is not until August.

Work may already be underway by the time the election rolls around.

Mr Coe said this did not phase the Canberra Liberals.

"We think if we can get a 3 per cent penalty here in the ACT as unfortunate as that is at least we would be saving 97 per cent of the cost," he said.

Capital Metro Minister Simon Corbell said there was no doubt that the cost in the ACT would be higher than the estimate that the Liberals have put out.

"And the reason for that is unlike in Victoria we will have construction underway," he said.

"We will have local Canberrans employed, we will have local contracts issued to local Canberra businesses, and all of those contracts will have to be cancelled as well, if the Liberals cancel the light rail project."