The consortium of developers contracted by the previous Victorian government to build the controversial East West Link toll road will abandon the project for between $525m and $700m, according to News Ltd reports.
The premier, Daniel Andrews, scrapped the project after being elected in November last year, saying the toll was was a “dud project” and that contracts signed by former premier, Denis Napthine, were “not worth the paper they’re written on”.
Negotiations with the consortium of developers, known as East West Connect and fronted by construction giant Lend Lease, have been ongoing, with Andrews saying last month that he may be prepared to introduce legislation to avoid paying compensation.
East West Connect came to its latest compensation request following weeks of debate among its members about how much compensation to ask for, with some reportedly demanding more than $1bn.
But in response, the government reportedly said the consortium should return $220m it received when it signed the contracts last November.
A spokeswoman from the premier’s office told Guardian Australia the government would not be making comment on the story or the negotiations.
“We’re going through all the contracts,” she said. “We are in the middle of negotiations with the developers, and we don’t discuss negotiations.”
An East West Connect spokesman said there was “nothing new to say”. “I don’t know where the information came from,” he said.
In February, Andrews described the project as a “dog”. “I didn’t sign the contract,” he said. “Victorians didn’t vote for this project. This project is a dog. It doesn’t stack up.”
His government’s transport alternative is the revived Melbourne Metro rail tunnel project, which would require significant funding from private investors and the federal government.
The project plan includes five new underground stations at Arden, Parkville, CBD North, CBD South and Domain, effectively providing a second city loop.
