Acciona claims details of utilities withheld

The Spanish contractor holding up the NSW government’s CBD light-rail project by suing the government for $1.2 billion is expected to allege the government withheld the detail of utilities locations until after the construction contract was signed.

But the government is set to counter with claims that there was an agreement that it could provide maps of the locations of only half of the utilities that had to be dug up and reinstated and the contractor would have to find out the rest.

It is understood the contractor, Acciona, is expected to allege there is an email trail between it and the government indicating that it did not have to accept liability for extra costs associated with utilities discovered in the course of the project that had to be dug up and replaced.

But the government is expected to counterclaim that it offered to provide only the first $100,000 for each additional work not originally identified and the company has been overcharging it for that work.

The bitter wrangle — which threatens to blow out the cost of the project from $2.1bn to $3.3bn — is set to start playing out in the Supreme Court on Friday.

The Spanish company is further expected to allege that certain work on the light rail was conducted and a price agreed and then the government subsequently failed to pay.

On Monday it was revealed that Acciona, which is contracted to the ALTRAC consortium building and operating the 12km light-rail project, which goes from Sydney to the southeastern suburbs, is suing the state government for $1.2bn, arguing that there are huge increased costs because of the power and telecommunications lines that have to be dug up and reinstated.

Transport Minister Andrew Constance has countered that the government, which he has called an “angry customer”, will not bend to Acciona and has blamed it for going on a deliberate “go-slow” in order to attempt to get some more money.

The dispute threatens to put the completion date of the project into 2020 — well past the 2019 state election — or beyond, after the government originally nominated a 2018 completion date.

In parliament yesterday, Premier Gladys Berejiklian came under attack over the disarray surrounding the project, which was announced when she was transport minister.

“Not only do I support light rail but I support it with every bone in my body,” Ms Berejiklian thundered across the chamber.

The Premier has previously said the government “won’t be held to ransom” by the company.

A spokesman for Transport for NSW said yesterday: “We confirm that Acciona has commenced proceedings against Transport for NSW in the Supreme Court of NSW and Transport for NSW will be defending those proceedings.

“Acciona is a contractor engaged by ALTRAC Light Rail, not Transport for NSW. Any contractual issues are a matter for those parties. As this is an ongoing legal matter, it is not appropriate for us to comment further.”

Mr Constance said last night: “The NSW government will not be bullied. We expect ALTRAC, Acciona and all their other subcontractors to deliver what they signed up to.”

The route of the light-rail project travels from the city to Central Station to the Sydney Cricket Ground, Randwick Racecourse and the suburbs of Randwick and Kingsford.

Former Infrastructure NSW chairman Nick Greiner recommended against the project but was ignored by former premier Barry O’Farrell and Ms Berejiklian.

When the contract was signed in 2014, Ms Berejiklian was forced to announce that the project had blown out from $1.6bn to $2.1bn.

The Auditor-General later found the blowout was due to “errors” and “mispricing”.

Source: The Australian