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Australia's Victorian gov't agrees massive settlement over canceled road project

Xinhua, April 15, 2015 Adjust font size:

Australia's Victorian government agreed to pay 258.2 million U.S. dollars to the international consortium contracted to build the doomed, multi- billion-dollar East West Link project on Wednesday.

It is the settlement money for "costs incurred" in planning the project byFrench company Bouygues and Spanish company Acciona are

The consortium was given the rights to build the toll road back in September 2014, but the massive infrastructure project was scrapped by the state Labor government which came to power last November.

The figure is a far cry from the 835 million U.S dollars in compensation the consortium was seeking from the government, but both parties agreed to the figure on Wednesday.

Victorian Premier Daniel Andrews assured taxpayers the payout was not "compensation" for dumping the project, just a payment to cover costs already incurred by the consortium.

"The government has entered into an agreement with the East West consortium," he said at a press conference on Wednesday.

"This is a good faith agreement."

"No compensation for lost revenue will be paid.. there will be any compensation whatsoever paid." he said.

A statement released by the consortium on Wednesday confirmed the deal.

"The East West Connect consortium has reached an agreement with the Victorian Government in the form of a non-binding Heads of Agreement providing a satisfactory conclusion to the East West Link project," the statement said.

Treasurer Tim Pallas said that Victorian taxpayers could have paid a lot more, and that the deal is satisfactory for the government.

"We worked hard to get Victoria out of this mess, cleanly and fairly, 339 million (Australian dollars) is equivalent to one year of payments for this dud project," he told the media on Wednesday.

"This would have been repeated every year for 25 years if (the former Liberal Treasurer) had his way," he told the media. Endi