- Published:
- Wednesday 9 December 2015
The Auditor General has today tabled a report into the East West Link that shreds the economic credibility of the Liberal Party and is damning of its handling of the project.
The Auditor General’s report confirms that the real cost of the project was in excess of $22.8 billion and should never have proceeded, finding that:
- The business case provided no sound basis for the government’s decision to commit to the project
- The project would have lost 55 cents for every dollar spent
- The Eastern Section was prioritised over the Western Section without evidence
- The Liberal Party ignored dozens of recommendations by peer reviewers and their own public service
The Auditor General has revealed that the $22.8 billion project was a “gamble”, whereby the Liberal Party scrapped proper process and rushed to sign contracts before the election despite significant “cost and risk exposure” to Victoria.
The Report finds that:
- The timeline for delivering the project was political and predicated on the date of the 2014 state election
- Despite “substantial cost and risk” to Victoria, the contract was rushed to meet this deadline
- The Liberal Party ignored advice that Matthew Guy’s botched planning decisions “exposed the state to greater cost and risk”
- The Liberal Party ignored advice to expedite legal proceedings before signing the contract, a decision that was “imprudent” and exposed the state to “greater cost and risk”
- The Liberal Party decision on the project was a $22.8 billion “gamble”.
The Report also finds that the Liberal Party unnecessarily increased the state’s exposure to cost and risk with additions to the contract and by signing the discredited side letter, despite advice that legal challenges could succeed.
The Auditor General has confirmed that:
- The final termination settlement will be $424 million plus the value of the swaps, which is ‘substantially lower’ than what would have been payable under the contract signed by the Liberal Party.
- The strategy adopted by the Andrews Labor Government “delivered a better outcome for the state” and was “a practical solution to a highly complex situation”.
Quotes attributable to Treasurer, Tim Pallas
“This report shreds the economic credibility of the Liberal Party and is a damning indictment of the actions of former Treasurer Michael O’Brien and former Planning Minister Matthew Guy.’
“It is a lesson in how not to govern, with the report finding that the Liberals lied about the business case, doctored the numbers, ignored expert advice and gambled billions of taxpayer dollars on a project that didn’t stack up.’
“Michael O’Brien and Matthew Guy should never be let near the state’s finances again.’