Magazine of Socialist Action in Australia

East-West dispute finally concluded

Reading Time: 2 minutes

It seems the final chapter in the East-West Link saga has finally been concluded with the Victorian Labor Government entering into an agreement with the private consortium that was contracted to build the toll road.

In the aftermath of the November 2014 state election works on the project stopped but negotiations over possible compensation to the consortium dragged on for months.

Under pressure from a bold community campaign Labor were forced to ditch their support for the East-West Link project and pledge not to proceed with it if elected. If allowed to go ahead the toll road would have destroyed homes and parks and cost taxpayers billions of dollars.

Under the agreement with the consortium compensation as such will not be paid. Instead the government will pay $1 to buy the companies in the consortium. The companies are understood to have very few assets but those that do remain will revert to the state.

The state however has already paid out $339 million to the consortium. This money will not be recovered. These funds have already been spent by the consortium on the bidding process and preliminary works like the test drilling which was targeted by community pickets.

The previous Liberal government also spent several hundred million dollars more on the project while $81 million was spent setting up a $3 billion credit facility. The government hopes to renegotiate the credit arrangement in order to use it for other infrastructure projects.

New figures show that private toll road would have actually cost $10.7 billion, not the $6.8 billion touted by the Liberals. While the loss of millions of dollars of taxpayer’s money is far from ideal, $339 million is roughly equivalent to the corporate subsidy the state would have paid to the consortium every year for the 25 years of the contract!

While the Liberals treacherously signed both the contracts and a side deal just before loosing the election, it was possible for the new Labor government to legislate in order to recover costs already paid to the consortium and to avoid paying any compensation.

Unfortunately Labor was not prepared to take any action that left big business worse off. Instead the government has chosen to let ordinary taxpayers foot the bill. The hundreds of millions wasted would have been much better spent on desperately needed public transport improvements.

While the final outcome in relation to costs incurred by the taxpayer could have been better, the big picture is that this disastrous private toll road project was stopped in its tracks. This would not have happened without the presence of a strong community campaign within which the Socialist Party played a crucial role.

While exposing the Liberals and the profit interests behind the project was key, it was the combination of direct action, a winning over of ordinary people in the outer suburbs, and constant pressure on the then Labor opposition, that secured the final victory.

** Book launch **

Beating the big end of town: How a community defeated the East-West toll road
6pm Friday May 22 at the Collingwood Gallery, 292 Smith Street Collingwood.

Socialist Party member Anthony Main has written an account of the successful community campaign that stopped the construction of the East-West toll road in Melbourne. Not only did the campaign stop a destructive road project but it also helped bring down a Liberal State Government in the process.

This book will be of interest to anyone wanting an insight into how big business interests can be beaten back and how socialist ideas can help facilitate the process.

By Socialist Party reporters


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