Contract award for East West Link

On 30 September 2014 the first stage of the East West Link project in Melbourne was awarded after signing contracts with winning consortium East West Connect.

East West Connect will operate and maintain the road on behalf of the Victorian Government for 25 years after construction.

The key highlights include:

  • 6.6 kilometres of new freeway standard road
  • Twin 4.4 kilometre three lane tunnels between Hoddle Street and CityLink
  • Two major freeway interchanges
  • Around 3,700 jobs
  • Walking and cycling initiatives
  • Upgrades to parks, gardens and sporting grounds, including a wetlands expansion and water themed park.

We have previously blogged on the high bidding costs for the East West Link as part of the challenges that face big PPP projects. Contractors can spend tens of millions on tenders for big projects.

It will be interesting to see the total cost to the Victorian Government of what it pays to unsuccessful the unsuccessful consortia. While a total of $224 million was allocated in the 2013-14 state budget for procurement for the first stage, with a further $70 million to follow in 2014-15, media has reported that the level of payment for the third bidder were up to $12 million and the second preferred tenderer is likely to be higher than that.

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