The Hon. Bruce Atkinson MLC
The Hon. Telmo Languiller MP
Dear Presiding Officers
Under the provisions of section 16AB of the Audit Act 1994, I transmit my report on the audit East West Link Project.
This audit examined whether the state had effectively managed the East West Link (EWL) project by assessing the total costs of the project, appropriateness of advice supporting key project decisions and the lessons for future major projects.
I concluded that the EWL business case did not provide a sound basis for the government's decision to commit to the investment and that key decisions during the project planning, development and procurement phases were driven by an overriding sense of urgency to sign the contract before the November 2014 state election. Over the life of this costly and complex project, advice to government did not always meet the expected standard of being frank and fearless. This highlights a risk to the integrity of public administration that needs to be addressed.
The audit also found that the EWL project was terminated in June 2015 with more than $1.1 billion paid, or expected to be paid, by the state. This cost includes expenditure on the planning, development, procurement and termination of the project and will be partially offset by future proceeds from the sale of properties acquired for the project. The Department of Treasury & Finance (DTF) estimates that these properties can be resold for around $320 million.
The report makes recommendations to DTF to provide guidance for development and delivery of major projects and for the Department of Premier & Cabinet to clarify requirements for frank and fearless advice from the public sector. Disappointingly, these departments have rejected the recommendations.
Dr Peter Frost
9 December 2015