The East West Link PPP Project's failure to launch: when one crash-through approach is not enough*

Abstract

The East West Link (EWL) project was to have been a $22.8 billion public–private partnership (PPP) to construct and manage an 18 kilometre road linking freeways east and west of Melbourne. Contracts were signed before and terminated after a state election by different governments. These actions are examples of government control over traditional governance conventions and operational outcomes, also referred to as the ‘crash-through’ approach. This long-term infrastructure PPP project enabled the first government to crash-through its infrastructure plans. However, the newly elected government argued that a new democratic mandate was more important than commercial contract continuation. This option came with a significant cost in excess of $1.1 billion. The project's failure to launch is examined via key events and controversies, and fulfilment of 13 PPP requirements. None were fulfilled, including the proper choice of a PPP as the procurement method and the delivery of value for money. Lessons learnt include the risk of suboptimal PPP outcomes when substandard and rushed state advice is used for decision making. We consider Victoria's Auditor-General's new ‘follow-the-money’ powers and the recently established Infrastructure Victoria in addressing PPP legitimacy.