Victorian Auditor-General's Office

Appendix A. Key features of the project contract

This Appendix is drawn from the East West Link (EWL) project summary prepared on behalf of the Linking Melbourne Authority (LMA) in October 2014. In a departure from usual practice for public private partnership (PPP) arrangements in Victoria, the project summary for EWL was not publicly released. The government released a partly redacted copy of the project contract documents in April 2015.

6 Lessons for future projects

At a glance

Background

The Public Administration Act 2004 (the Act) seeks to ensure the maintenance of an apolitical public sector that responds to government priorities in a manner that is consistent with public sector values. The Act imposes an obligation on public officials to provide frank, impartial and timely advice to government.

5 Terminating the project

At a glance

Background

The government announced final agreements to bring the East West Link (EWL) project to an end in June 2015. The termination settlement involved the state reimbursing East West Connect (EWC) for claimed expenditure on the project and acquiring the project assets and interest rate swaps established for the project. The state also negotiated an uncommitted bond financing mandate for up to $3.1 billion with some members of the EWC banking group.

4 Establishing the project contract

At a glance

Background

Following a competitive tender process to select a contractor to finance, design, construct, and then operate and maintain the East West Link, the contract for Stage 1 of the project was signed with East West Connect (EWC) on 29 September 2014. The state provided a side letter confirming its commitment to honour the contract on the same day in recognition of the unique circumstances around the government's decision on whether or not to sign the contract.

3 Planning the project

At a glance

Background

The East West Link (EWL) project was one of the most significant investments ever proposed for the state in terms of impact, complexity and cost. In October 2011 the government approved funding for the development of a business case for the project. In April 2013, the government approved the eastern section of EWL to proceed as Stage 1 of the project, based on the March 2013 business case.

2 Project costs

At a glance

Background

The East West Link (EWL) project was one of the largest transport infrastructure projects ever proposed in Australia. It was to be delivered in two stages. Prior to the November 2014 state election, work had commenced on Stage 1, the eastern section, with limited progress on Stage 2, the western section. Following the November 2014 state election, after significant costs had been incurred, the new government terminated the project.

1 Background

1.1 Introduction

The East West Link (EWL) project was one of the largest transport infrastructure projects ever proposed in Australia. The full project included an 18 kilometre cross city road connecting the Eastern Freeway at Hoddle Street to CityLink, the Port of Melbourne precinct and the Western Ring Road at Sunshine West. Figure 1A shows the planned EWL.

Figure 1A

Planned East West Link

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