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.

Research for impact: three keys for research implementation

“…The public-private partnerships used to deliver a considerable portion of these projects, for instance, have come under scrutiny (Hodge, Greve, and Boardman 2017), raising accountability issues (Stafford and Stapleton 2017), and spurring socio-economic critique (Zwalf, Hodge, and Alam 2017). Recent examples from around Australia show that many communities are unhappy with the way certain projects have been proposed or delivered (DE Martinis and Moyan 2017). From the industry perspective, social opposition contributes to increased costs and barriers to infrastructure delivery, including substantial delays and cancelations (Bice, Neely, and Einfeld 2019;Harris, Hodges, and Schur 2003).…”

Next generation engagement: Setting a research agenda for community engagement in Australia's infrastructure sector

“…Disparate approaches to how community is defined and deployed are borne out in recent research that looks into national and international efforts to integrate CE into policy concerning infrastructure planning or project delivery (Cowell and Devine‐Wright, ; Nabatchi & Jo, ). Transport, urban planning, and housing scholars contribute to an entire subgenre of research concerning community responses to particular projects (De Martin and Moyan, ), planning politicization (Legacy, Cook, Rogers, & Ruming, ), and the role of new planning paradigms in what certain scholars argue is a “post‐political” era (Legacy, ). Each of these contributions points simultaneously to the challenges of defining community and to setting clear boundaries and expectations for CE practice.…”

“…PPPs, for instance, have triggered a range of policy questions (Hodge, Greve, & Boardman, 2017), accountability issues (Stafford & Stapleton, 2017), and socioeconomic critique (Zwalf, Hodge, & Alam, 2017; see AJPA September 2017 Special issue on PPPs). Recent examples from around the country show that many communities are unhappy with the way certain projects have been proposed or delivered (De Martin and Moyan, 2017). From the industry perspective, social opposition contributes to increased costs and barriers to infrastructure delivery, including substantial delays and cancellations (Harris, Hodges, Schur, & Shukia, 2003).…”

How do adoption choices influence public private partnership outcomes? Lessons from Spain and Portugal transport infrastructure

“…For instance, Hellowell and Vecchi (2013) reinforced weakened value due to the increased cost of financing and suboptimal outcomes not corresponding with the investment made. De Martinis and Moyan (2017) are uncertain whether access to finance adoption motive would provide value for all stakeholders. Other scholars (Jeffares et al, 2013;Willems et al, 2017) question whether the desire of most governments to promote access to private finance ideology is because it meets their construction risk transfer goal, ensuring project completion, even though the private sector goals from the commercial point of view and societal value for citizens' next generations remain unmet.…”

“…Achieving success with this mechanism has been a highly complex process in some and noncomplex in others, leading to the growing indecisiveness in its adoption (Roehrich et al, 2014). This complication can be a consequence of many factors, which includes risk misallocation (Sarmento and Renneboog, 2014), conflict, legal proceedings or technical faults (Panayides et al, 2015); early cancellation due to change in government (De Martinis and Moyan, 2017) and many understudied areas due to the complex and changing nature of PPP model and the uncertainty the long-term nature of the procurement model triggers.…”