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Victoria faces Comm Games contract cancellation compo

Victoria has backed out of its agreement to host the e2026 Commonwealth Games. Picture: James Ross.

Victorian taxpayers could be on the hook for more than $1 billion in compensation after pulling the pin on hosting the 2026 Commonwealth Games.

Premier Daniel Andrews renounced hosting the global sports event in regional Victoria, citing a forecast cost blowout from $2.6b to up to $7b in just over a year.

The Victorian government has confirmed Ernst & Young was involved in the initial $2.6b estimate outlined in the last year's state budget and the latest business case will be released, subject to legal advice.

The cost of breaking the Games contract is yet to be settled, with further talks between the state government and organisers taking place after Tuesday's decision.

Mr Andrews refused to speculate on how much it could cost state taxpayers to exit the contract but pledged the figure would be accounted for.

About a decade ago, the Queensland government investigated the cost of axing the 2018 Commonwealth Games on the Gold Coast and determined it to be more than $1 billion.

The figure was revealed in estimates in 2018 and it could come in higher for Victoria given skyrocketing inflation and the limited time for organisers to find a replacement host.

It's not the first time the Andrews government has spent taxpayers' money to break a signed contract.

A $642 million termination settlement was paid out to scrap Melbourne's East West Link road project despite Mr Andrews declaring the contract could be ripped up at no cost before the 2014 state election.

Mr Andrews said his government considered other options to lower the Games' price tag, including reducing the number of sports and hubs or moving the Games to Melbourne, which still would have cost roughly $4b.

The premier suggested no contracts for major Games projects have been signed and minimal costs incurred to date.

State Opposition Leader John Pesutto said paying out compensation was an inevitability and called for Mr Andrews to consider his position.


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