The Victorian government has agreed to pay $339 million to cancel the controversial $10.7 billion East West Link toll road.
Labor campaigned against the project at the 2014 state election, which ousted the Liberal Coalition after just one term, and promised to cancel it.
As well as the costs, incurred by the consortium constructing the roads, the State will buy the East West Link project company and its assets for one dollar.
A further $81 million of fees, spent to set up the Project Co credit facility of $3 billion, will be absorbed by the government.
The State will renegotiate with banks to take over the credit facility to help fund the Melbourne Metro Rail Project.
All other rates, fees, swaps and obligations related to the credit facility will now be worked through between the financiers and the State.
“Today’s agreement is the best possible result we could have achieved and it puts the interests of Victorians first,” premier Daniel Andrews said.
He said the money was not compensation, but instead “costs incurred” so far by the consortium.
The East West Link was a proposed cross-city road connection extending across Melbourne from the Eastern Freeway to the M80 Ring Road.
In December, Andrews suspended works on the project when minor preliminary work was due to begin, following concerns that the government would be forced to pay up to $1 billion in compensation.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.