Australia: Consortium ready to abandon Melbourne’s East West Link

The East West Connect consortium is set to abandon Melbourne’s East West Link contract in return for a payment of between US$400 million and $535 million, according to media reports. But the Victoria state government is challenging the claim by East West Connect whose partners include Lend Lease, Acciona, Capella Capital and Bouygues. Instead, the government wants East West to payback around $153 million which the consortium allegedly received when the toll road contract was signed, reported the Herald Sun
March 10, 2015 Read time: 2 mins
RSSThe East West Connect consortium is set to abandon Melbourne’s East West Link contract in return for a payment of between US$400 million and $535 million, according to media reports.

But the Victoria state government is challenging the claim by East West Connect whose partners include Lend Lease, 976 Acciona, Capella Capital and 979 Bouygues.

Instead, the government wants East West to payback around $153 million which the consortium allegedly received when the toll road contract was signed, reported the Herald Sun newspaper.

The contract ran into trouble after a Victoria state election in November that saw a change in government. The incoming Labour Party administration of now premier Daniel Andrews brushed the deal aside, claiming it was null and void.

World Highways reported last October that the consortium signed a contract with the Victoria government to deliver the US$7 billion, but only after the High Court rejected an application for an injunction to defer the controversial deal.

The project's winning design incorporates two 4.4km three-lane tunnels between CityLink and Hoddle Street. The consortium reportedly had spent nearly $35 million on the project up to the signing of the deal. The contract also included a $436.69 million kill fee to protect the consortium from sovereign risk.

Also in October, World Highways reported that Hyder and 2693 Parsons Brinckerhoff had been appointed as the design team for East West Link. The two engineering and management consultancies created a 50/50 joint venture to provide detailed design and construction support services for the 6.6km Stage 1 work, which is the eastern section, of the project.

The toll road will form an 18km cross-city connection extending across Melbourne from the Eastern Freeway to the Western Ring Road.

Stage 1 will be a three-lane road connecting the Eastern Freeway and CityLink, the majority of which will be underground in twin tunnels. The project's winning design incorporates two 4.4km three-lane tunnels between CityLink and Hoddle Street.
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