East West Link: It's a mess, Michael O'Brien, much of it is your fault
Date
December 9, 2015
The Age
Michael O'Brien must quit as shadow treasurer. His position is untenable after Wednesday's report from Victoria's financial watchdog found the East West Link debacle has cost taxpayers $780 million.
The report is a case study of how not to deliver big projects – a ham-fisted process we would mock if it occurred in other countries.
Shadow Treasurer Michael O'Brien remains unapologetic about his role in the cost to the state of the failed East West Link project.
It was political opportunism and blackmail at its worst, and, as treasurer in the Napthine government, O'Brien led the charge for this project – even signing a side-letter to reassure the East West Connect consortium (EWC) that it would be paid.
The acting Auditor-General Peter Frost found the business case for the East West Link "did not provide a sound basis for the government's decision to commit to the investment".
Key decisions during the project's planning, development and procurement phases were driven by an overriding sense of urgency to sign the contract before the November 2014 state election. Signing the contract in these circumstances was imprudent and exposed the state to significant cost and risk.
The East West Link was pursued by the former Coalition state government in the face of unanswered questions about its commercial viability.
"From its inception to its termination the EWL project was not managed effectively and it will become an important marker in the history of public administration in this state," Frost said.
Well, the buck stops with you, Michael O'Brien. Signing the public up to a project no one voted for, and exposing taxpayers to a huge financial loss, is unforgivable.
At the time of signing the contract, it was Labor Party policy to scrap the project. There was also a court challenge under way. Labor was ahead in the polls and had been for at least a year – it was the clear favourite to win the election.
As treasurer of this state, O'Brien should have taken this $23 billion project to an election – scheduled to be held just 60 days after the contracts were signed.
Not one cent would have been wasted if people had been given the chance to vote. If the coalition won, the project went ahead; if it lost, taxpayers were not out of pocket.
It was reckless to sign the East West contract.
This is a watershed report – not just for governments. In many ways, this Auditor-General's report is a low point for Victoria's public service. It said there had been "too much emphasis to the benefits of approaches that were in line with the government preferred outcome and little emphasis to alternative options that could be argued were more aligned with the state's best interests".
"Over the life of this costly and complex project, advice to government did not always meet the expected standard of being frank and fearless. This highlights a risk to the integrity of public administration that needs to be addressed," Frost said.
Some public officials, he said, indicated "frank and fearless advice when they believe a government does not want to receive it will negatively impact their influence or career opportunities".
What a mess.
It is not even clear the millions of dollars taxpayers have paid out in costs were justified, with the consortium refusing to hand over expenditure paperwork. "This created a risk that EWC's related parties had a windfall gain," Frost found.
The Andrews government does not escape unscathed either. It did not do enough to consider the full impact of continuing with the project – the benefits of termination against the costs. And its heroic boast in opposition, that cancelling the contract would not involve a compensation payment, has proved to be expensive spin – or a lie – you decide.
But it is the haste to sign this contract that led to this disastrous outcome. At a media conference on Wednesday, O'Brien said the East West Link payment could have instead funded a new hospital or dozens of new schools and trains. Yes, it could have.
O'Brien was asked if he would like to apologise for the East West Link mess, take any responsibility, or if he had any regrets. No, no, no. It is all Daniel Andrews' and Tim Pallas' fault.
No one has been held accountable for this mess, which will leave taxpayers almost $800 million worse off. At the very least, the person in charge of the money at the time should take some responsibility
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