Legislation to cancel a contract is unknown territory. However, my view is the risk of businesses refusing to do future investment is greatly exaggerated. Businesses in future will probably mitigate the known risk. They would simply demand a signature from the government AND THE OPPOSITION before proceeding with a large contract. I think that would be an excellent outcome as it ensures only bipartisan projects proceed. If an opposition party signs an agreement, then cancels it via legislation when they get into power, that would be a very serious issue. The East West Link is an unusual situation because Labor clearly said they were against it before the election, and the irresponsible (I would say corrupt) Liberals signed the contract fully knowing that Labor didn't want to proceed.
The unusual nature of the East West Link furthermore is highlighted on this page:http://www.theage.com.au/victoria/18b-east-west-link-requires-special-laws-20140804-1008ul.htmlt
It will have at least a paragraph describing the necessity of project specific legislation.
Still remembering the days when Geoff Shaw was in complete control of passing bills maintaining his position at the pivot of the see saw between Labor and Liberal, that's one reason I can think up why it wouldn't be tested in parliament in the way Citylink and Eastlink were legally established.
Searching youtube, the same individual, Professor Michael Crommelin as described in the age article above, has this response on this video in a 7:30 report regarding contractual obligations and legalities, as well as parliamentary abilities.https://www.youtube.com/watch?v=wAIEUe_HhkI
The specific dialogue about the parliament's ability to render the contract invalid and cancel compensation is between 1:30 - 3:17, however I recommend watching the entire video, obtain the broad scope of the issue and other facts involved.
PS, Good post Divine3801. Although whats divine about 3801, For a real loco lets get H220 running, the most power full steam loco in Australia ......... Wink.
I agree on H220, hopefully it will be able to run again, the only 4-8-4 3 cylinder in the southern hemisphere, why wouldn't a lot of tourists race down to Victoria to see it run again? Maybe if it can run on standard gauge and demonstrate it's stellar performance, I have no doubt the name 'Heavy Harry' will be very famous around the nation.
Hmmmmmmmmmmmmmmmmm............. For what its worth, I agree. As far as I can see when these contracts were signed it was quite clear the liberals would lose the election and labor had made it QUITE CLEAR they would cancel the contract. Is most probable the reason why any company signed was they new it would result in some amount of money and only a token effort would be required, ie, money for nothing, what company could ask for more. The idea it would reduce seriously reduce confidence in Victoria, in my opinion flies against the facts, ie that almost everyone knew the projct was doomed.
This is an article that echos your point of view:http://www.theage.com.au/victoria/east-west-builders-seek-500-million-kill-fee-20140923-10ksto.html
it will describe how the company signed on declaring confidence in acquiring compensation, it also has a conclusion in the passage where a CEO of an infrastructure lobbying group states damage to Victoria's reputation for best infrastructure jurisdiction, but there is the fact that this road didn't get project specific legislation, like Citylink and EastLink
There is this, despite Lend Lease claiming they have the legal advice protecting their rights to compensation, they were handed a letter that Michael O'Brien revealed to us recently where they would be compensated regardless of the ruling of the courts, would that letter have been necessary at all if the company's legal rights to compensation is firm?
Two agendas on two sides here, the company sees that labor is officially declaring contracts will be cancelled. The company with their expenses already spent in geotechnical surveys and tasks of setting up the information for engineering to prepare for construction will want to recover the costs, but they go even further and want a free handout.
Therefore they demand from the government penalties payable to them to recuperate the funds spent and committed already to the project, and significant more for providing them profits intended to come from the project.
Napthine, cannot force them to sign without it gives in in desperation to demonstrate strength politically, and blackmail us into declaring 'Andrews intends to recklessly spend $1billion for nothing' when it will be $18 billion for a devastating set back as this will be needed to pay if off as a result of $6billion not making profitable return. They practically beg them to sign up, a vast amount of the money that is contributed from taxpayers, desperation evident in that 'side letter'
They in effect become dirty salesmen of Lend Lease parroting about their $1billion compensation clauses for the company to stay on the contract.
Along with this woodford, I read your response to statements about reducing business confidences and knowing the project was doomed, this is a decision made by one of the bidders, Leighton, to cease bidding, both articles should be similar:http://www.theage.com.au/victoria/east-west-tunnel-link-project-too-risky-for-leighton-20140728-3cq4f.htmlhttp://www.afr.com/p/business/companies/melbourne_east_west_link_tunnel_WWjPz8jxldaHmifXCJKZlJ
This was a while back in July 2014. I am sure all bidders had access to the business case, and now today we do, no wonder why they pulled out, it was so hazy they must have very shortly established the elevated high risk and also, it was way before Labor would state official opposition to the contract 2 months from the election. Today, they can witness comfortably the consequences of going into high risk contractual agreements. If it was the Melbourne Metro Tunnel I think it would be a different story, and would still be today when they get offered regardless of the nonsense of East West Link.
4 months on after the election, there is persistent attempts from the 'person' of the office of the prime minister to intimidate and coerce the premier to restart this dud toll road, a dud toll road that even the business case for it itself, shatters it's legitimacy as the solution of our transport issues.http://www.abc.net.au/news/2015-03-12/east-west-link-words-between-daniel-andrews-and-tony-abbott/6307212http://www.theage.com.au/victoria/abbott-claims-victorias-east-west-link-reversal-will-hurt-australias-reputation-as-a-safe-place-to-invest-20150312-141hzj.html
As would the articles note, the federal auditor is investigating the decision for the federal funds being contributed where a rigorous analysis was lacking. Cost benefit ratio returning 45 cents for every dollar spent on it, business case making a damning summary of the project itself, the auditor general along with the team that would be led under him/her should have a thorough look into these documents.
The premier is demonstrating his strength in his will to stay in this direction, unfortunately there are still efforts rife to attack and stab him on this decision, but the business case will help him and all those who declare and see the colossal trouble it would have caused Victoria for the past 2014.
I mentioned before I am skeptical of the premier, I am having some hope he will do his best and in our interests, but we must be vigilant, what he has for us ahead in this term apart from what he has announced we don't know just yet, and the pending promises if they will come through.
In my opinion, for now we can hope for the best of him, he is taking some of the steps we need in the right direction.
I am not calling him the hero of Victoria, nor should I think we should be totally submissive to his government when it comes to decisions on where they take our state forward, respect the office you are voted in to administer, and the sensible, respectful people will respect and honour you, it is a gift the people gave you to lead the electorates and ultimately the state and the nation together for society's benefit.
Even with the East West Link ceased, you can't leave it there with just a program of removing 50 level crossings, that Eastern Freeway has trucks and vehicles going west trapped amongst a sea of cars wanting to get to the CBD, they need that train line to Doncaster urgently, furthermore it needs to start operating with the Metro Rail Tunnel down Swanston street, a project even Napthine's transport planners said before stands well above the East West Link in returning benefits, getting us $1.90 for every dollar going into it.http://www.abc.net.au/news/2014-11-19/melbourne-rail-a-better-deal-than-east-west-toll-planners-say/5902268
This East West Link for 2014 needs to be shut down, the environmental and social impacts would be heavy and most of all did not have a financial benefit, if we need it in the future, then the business case, various legal, financial and relevant experts should prove to us that it is needed. It should never have come this far to the point where councils had to launch lawsuits.
But be wary, if Labor fails in it's commitments to us and falls disastrously short of the standards the Victorian people expect, you can expect the likes of Matthew Guy and Michael O'Brien to take advantage of this and attempt to slither their way back into power. One goes to court as the defendant declaring the business case was never read or considered, the other releases the 'side letter' it's sentences outlining promised compensation regardless of court orders.
They have not demonstrated any remorse for their actions, business confidence being affected by the state's decision to cancel the contract?
The 'people' in the company that demanded a profit for preliminary works and ultimately no project construction should suffer their own loss of reputation from the public, who are these people in this company that want to take our taxpayers money in this manner? they equally deserve their own consequences for their greed, just as much as the Napthine and now Guy and O'Brien continued to embark on their abomination.
I am sure Leighton will be happy to be approached for business discussions and participate in bidding for the Metro rail tunnel, any other construction projects, competing with any other construction giants. Metro rail tunnel, the best ranking from Infrastructure Australia as most important, business case demonstrates a strong return of profits. You can make profits responsibly and respect the ones you trade with.
Prove to them you have a business case that demonstrates it a reasonable solution, that the finished product will be in demand once it's finished and ensures they will have the confidence. Confidence that proves that their contractual agreement and the progressive stages of reaching completion is secure for them. At the same time you must have in the contract your demands and your expectations to which they will agree to be accountable to, all of which is outlined in relation of ensuring that the interests of the taxpayers benefit, as it is the problem you discuss and contract them to solve for and with you and in the end provide a solution that the taxpayers are asking for.
There was no doubt Lend Lease with the former government were fully aware of it's illegitimacy to Victoria. They were warned, the business case was the document that instead of being able to promote it, in fact proved it unviable, unsuitable, destructive and ultimately signalled it as reckless to allow it to continue.
The lust and greed for money shows true from the 'people' in Lend Lease. They would never have proceeded into contracts if they weren't led to believe they were opened access to claw a large amount of taxpayers money when the cancellation came through, intent on having a large amount spilled into their own accounts regardless of which direction. That which also fully reflects on Napthine's abhorrent behaviour in robbing our state and gifting it to a company and along with Abbott attempts of blackmailing shoving this rhetoric at us "Andrews paying $1billion for nothing" which today they still ignorantly and negligently spit on us in opposition. You didn't read the business case, you wrote side letter guaranteeing compensation irrespective to the ruling of the courts, you held our business case away from us
, do not lecture the current government or anybody at all about sovereign risk and business confidence.