The East West Link: the road project Victoria paid not to build

A billion-dollar hole in the ground that wasn't even dug

In 2014, the Victorian Liberal government under Denis Napthine signed contracts to build the East West Link - a proposed 18-kilometre freeway tunnel connecting the Eastern Freeway in Clifton Hill to the Western Ring Road near Sunshine. The total project cost was estimated at $6–8 billion, making it one of the most expensive road projects in Australian history.

There was just one problem: Victorians didn't want it.

The November 2014 state election became a de facto referendum on the project. Labor under Daniel Andrews ran explicitly on cancelling East West Link. The Coalition lost. Andrews won. And what followed was one of the most expensive policy reversals in Victorian history.

What did cancellation actually cost?

When the Andrews government cancelled the contracts in 2015, the state had to pay $1.1 billion in compensation to the consortium East West Connect - for a road that hadn't had a single metre of tunnel bored. That's not a typo. Over a billion dollars, for nothing built.

The breakdown tells its own story:

To put that in perspective, $1.1 billion could have funded approximately 11 new suburban hospitals, or fully funded the expansion of Melbourne's tram network into growth corridors that have been waiting for public transport for decades.

Why did it happen in the first place?

The Napthine government fast-tracked the East West Link in the final months before an election, signing contracts in a way that deliberately maximised the cost of cancellation. Critics - including Infrastructure Australia - had already rated the project as uneconomic, with a benefit-cost ratio of just 0.45 to 0.84 depending on the model used. In plain terms: for every dollar spent, Victorians would get back less than a dollar in economic benefit.

Infrastructure Australia's assessment is normally a prerequisite for federal funding, yet the Abbott federal government committed $3 billion in Commonwealth funding to the project anyway, bypassing standard processes. That funding was later redirected by the Andrews government toward the Metro Tunnel - a project that actually stacked up economically.

So why did the Napthine government push ahead with a project that independent experts said didn't make financial sense?

• Construction industry lobbying: The project was backed heavily by the civil construction industry, which stands to profit enormously from major tunnelling contracts.
• Political differentiation: The Coalition needed a big infrastructure announcement to contrast with Labor's public transport focus.
• Sunk cost strategy: By signing binding contracts before the election, the government was betting that the cost of cancellation would deter any incoming Labor government - a deliberate democratic trap.

Who paid the price?

Ordinary Victorian taxpayers. Not the lobbyists. Not the executives at East West Connect. Not the ministers who signed the contracts. Victorians who needed hospitals, schools, and public transport instead watched $1.1 billion evaporate into legal fees and compensation payments to a private consortium.

The communities most affected were concentrated in Melbourne's inner north - suburbs like Fitzroy, Collingwood, and Carlton - where the project would have demolished homes and cut through established neighbourhoods. Residents in these areas organised, protested, and ultimately voted the government out. Their concerns about community impact, environmental disruption, and project economics were well-documented. They were simply ignored until an election forced the issue.

The pattern keeps repeating

What's remarkable about the East West Link isn't just its cost - it's how familiar the pattern feels. A government decides on a major project. Contracts are signed without genuine public consultation. Billions are committed. A change of government creates a mess. And taxpayers foot the bill regardless of who wins.

The same dynamic played out federally with the NBN - where a world-class fibre network was replaced with an inferior hybrid model to justify a political point - and with the former federal government's commuter car park program, where projects were funded based on marginal seat calculations rather than transport need.

Both major parties do this. The Liberals did it with East West Link. Labor has its own history of rushed, politically-motivated infrastructure decisions. The common thread isn't ideology - it's a system that rewards politicians for announcements, not outcomes.

What would direct democracy look like here?

Here's a simple question: if Victorians had been asked to vote directly on whether to sign binding contracts for a project rated uneconomic by Infrastructure Australia, in the final weeks of a government that was trailing in the polls - do you think they would have said yes?

Of course not.

Direct democracy doesn't mean voting on every procurement decision. But it does mean that major, irreversible, billion-dollar commitments should require genuine democratic authorisation - not just the say-so of a cabinet facing electoral defeat. A participatory democracy model would create formal mechanisms for citizens to weigh in on major infrastructure decisions before contracts are signed, not after the damage is done.

The East West Link is a $1.1 billion argument for giving Australians a real say in how their money is spent.

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