Formula 1 Grand Prix set to stay in Melbourne Ted Baillieu says the Melbourne Grand Prix is likely to stay. THE Victorian state government is set to swallow the mounting costs of the Australian Grand Prix and negotiate for an extension of the race. Premier Ted Baillieu is likely to begin talks later this year on a new deal to keep the event at Albert Park after the current contract ends in 2015. The government refuted figures revealed recently in the Herald Sun suggesting Formula One supremo Bernie Ecclestone was reaping $30million from the Melbourne GP. But the Baillieu Government said it was committed to reducing the costs involved in any new arrangement. "There are three more races under the current contracts and we will see out those and commence discussions at an appropriate time," Mr Baillieu said. While he would not give an iron-clad guarantee that the race would go ahead at any cost, Mr Baillieu said it had proved to be an invaluable asset to Melbourne over the past 17 years. "I say again the grand prix has been good for this state, good for this city and is a key part of our major events calendar and that calendar gives Victoria a competitive edge," Mr Baillieu said. I am very confident that the grand prix has been good for Melbourne and Victoria, will be good for Melbourne and Victoria. We intend to do whatever we can to ensure our major events calendar remains strong and the grand prix has been a part of that and we look forward to it being a part in the future. Asked whether the race could continue at a cost of $50 million a year, Mr Baillieu said: "The benefits are very substantial." "We need to weigh up the benefits and we will endeavour to get the best possible deal we can," he said. He said that the $30million fees reportedly paid to Ecclestone were "not news to that extent" but had been misunderstood. According to Mr Baillieu the money did not go directly into Ecclestone's pocket. Those fees cover the arrival, the production of the grand prix itself - all of the equipment and personnel that is brought here - and they go to the company which runs the grands prix around the world. Mr Baillieu said if the grand prix were to be lost Melbourne would come to realise how valuable it was. It brings together people from all over the world in precision manufacturing, in automotive, in racing - and we see the results. "The Auto show last year was an outstanding success, Melbourne-based companies signed contracts as a result of that auto show drawn here by the grand prix," he said. Grand Prix Corporation chief executive Andrew Westacott confirmed that talks on a new contract would begin later this year.