NSW nears settlement for Sydney Light Rail

27 February 2019 - 12:00 am UTC

The NSW government is racing to settle Acciona’s AUD 1.1bn (USD 790m) claim for cost blowouts on the Sydney Light Rail project before going into caretaker mode for the state election on Friday, Inframation understands.

Adviser sources close to the negotiation said the parties were trying to finalise an agreement this week, but a government source said it is not clear a deal can be signed by Thursday. 

A directions hearing is currently scheduled in the NSW Supreme Court for 8 March.

The election will be held on 23 March. The Department of Premier and Cabinet has said that in the caretaker period starting on 1 March, “as a general rule, no significant new decisions or initiatives, appointments, or contractual undertakings should be made”.

These are conventions and exceptions can be made, however.

Local media have reported the government and Acciona are working on a deal worth about AUD 600m. The government has admitted to the negotiations, but not how much it might pay.

If the figure is correct, the total cost of the 12km project – which runs down the middle of Sydney’s main thoroughfare, George Street, and then out to the southern suburb of Randwick – would blow out to almost AUD 3bn from the original AUD 1.6bn. The NSW Auditor General recently estimated the cost had risen to AUD 2.3bn.

The line was due to be delivered by March this year, but is now unlikely to be finished before May 2020.

Acciona sued Transport for NSW for AUD 1.1bn in April 2018 alleging misleading or deceptive conduct over the extent of utilities under the tram route during negotiations prior to awarding the PPP contract to the ALTRAC consortium of ACCIONA, Transdev Sydney, Alstom Transport Australia and Capella Capital in December 2014.

A Transport for NSW spokesperson would not comment further on the progress of negotiations.

“Since June 2018, Transport for NSW has been in intensive commercial negotiations with ALTRAC and its contractors to try to resolve a number of issues. These commercial negotiations are ongoing and strictly confidential,” she said.

A spokesperson for Acciona has confirmed a settlement deal is being worked on, but declined to comment further on whether a deal is imminent.

Acciona alleged that within hours of financial close on 27 February 2015, it received details of changes to utilities required from electricity network operator Ausgrid that “diverged to a significant degree” from what it had agreed with the NSW government.

On the day the claim was lodged, Transport Minister, Andrew Constance, called it “outrageous” and “absurd” and declared the government would “fight it hard in the courts”. 

 

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