A consortium has signed a $5.3 billion deal with the Victorian government to build the first stage of Melbourne’s controversial East West Link project.

East West Connect consortium member Lend Lease said it has entered into an estimated $5.3 billion public private partnership with the state government to finance, design and construct stage one of the project.

• Body of mountain biker found
• Two years on: Tom Meagher pays tribute to Jill
• Triple-fatal driver jailed

Victorian Premier Denis Napthine signed the contract on Monday afternoon, shortly after a resident lost a High Court bid for an injunction to stop the step.

Dr Napthine said the deal was “game-changing”.

“We’ve taken a massive step forward to make a real difference to our great city and our great state,” he told reporters.

The premier said the project would make a difference to families trying to get home and people trying to get to and from work.

Dr Napthine said motorists stuck in peak hour traffic would be “literally jumping for joy” at the thought of more efficient major roads.

Dr Napthine refused to reveal how much money the Victorian government would contribute to the project.

He also would not say if there was a penalty clause in the contract, if Labor won the November 29 election and ripped it up.

“The contract will be made publicly available at an appropriate time,” Dr Napthine said.

Dr Napthine said if the project fell over the state government would have to return $3 billion to the federal government.

Rejecting Brunswick resident Anthony Murphy’s injunction application, High Court Justice Susan Crennan said if an injunction was granted the loss suffered by the government and its preferred builder was greater than any potential loss Mr Murphy could suffer.

“More is at risk for the respondent,” she said.

East West Connect’s legal counsel Michael Wyles QC had told the court a delay in signing the contract would cost the group $435,000 per week from Monday.

“It is an innocent third party which has done no more than comply with the timing of the state in the tender process,” he said.

“The reality is the harm will commence to be accrued by the consortium immediately.”

Ron Merkel QC, for Mr Murphy, told the High Court that if the project proceeded it would cost Victorian taxpayers 20 cents of every dollar invested, he said.

“If this contract is signed it’s committing Victoria to hundreds and hundreds of millions of dollars of loss on its own economic modelling, by its own standards,” Mr Merkel said.

The Court of Appeal earlier on Monday granted Mr Murphy a retrial in his battle against the project after finding he was denied procedural fairness.

He will also return to the High Court on October 17 to appeal against last week’s Court of Appeal decision not to grant an injunction to stop the contract signing while he fights the legal challenge.

Two inner-city councils are also challenging the Victorian government in the Supreme Court over its planning approval of the East West Link road project.

Mr Murphy denied he now had to rely on other challenges to get the project stopped.

“The judge noted that there are other forms of relief which are lesser than the one we were asking, that is corrective advertising,” he said.

“We want whatever we can get.

“Obviously we would have preferred an injunction to restrain the government from signing anything until our full case is heard. But we have to accept the court’s judgment on that.”

Deputy opposition leader James Merlino said that irrespective of the outcome of the legal challenges, Labor’s advice was that it could tear up an East West Link contract if it won office.

“We are just over eight weeks from a general election. We are four weeks away from going into caretaker mode,” Mr Merlino told reporters before the High Court decision.

“It should be for all Victorians to decide.”

The East West Connect consortium – comprising Lend Lease, Capella Capital, Acciona and Bouygues – will build the project’s first stage, a 6.6km eastern section joining the Eastern Freeway with CityLink.