BUSINESS

NSW Government Getting Flak For Light Rail Project Lawsuit

The Opposition is giving the NSW flak for not getting a good legal team and financial advisor in Australia, which has lead to what they consider as a ‘bad call’ regarding a $1.1 billion lawsuit on the George Street light rail project, which holds a reputation as Sydney’s problem project.

NSW’s Shadow Minister for Planning and Infrastructure, Michael Daley says that it seems that Gladys Berejiklian and Andrew Constance are being dense again, having forgotten that the George Street project involves hundreds of millions of Aussie taxpayer money, all  put on the line. If the litigation continues, the issue will likely be put on hold until the post-electoral season.

The Spanish contracting firm Acciona, designer and constructor of the light rail line, filed a $1.1 billion lawsuit against the NSW government. The lawsuit was fined in late of March 2018, and Transport for NSW had reportedly decline to mediate on the case, which has claims regarding misleading and deceptive conduct.

The firm sent its statement of claim to NSW a month before they filed it in the NSW Supreme Court, asking for mediation with a final request, which was then rejected by the court. Transport for  NSW, meanwhile, did not comment as to why they weren’t pursuing mediation for the case, saying that information that would be relevant to fixing the dispute was “commercial-in-confidence”.

A spokesperson from Transport for NSW claims that they have already engaged in discussions with ALTRAC and Acciona to deal with the problem, but they weren’t successful. ALTRAC, the consortium that contracted the work to Acciona, did not release a statement on the matter.

Arbitration or mediation is the preferred method for lawsuits, according to contractors and any financial advisor in Australia, as they’re cheaper and faster than court proceedings, whilst allowing for the dispute’s details to remain private. However, if the arbitration ended up in favour of the contractor, and ordered the government to compensate the contractor, then the government would have to deal with that in the days leading into the March 2019 state election.

The government has repeatedly stated that this project will be both on time and on budget, but with the demand from Acconia, one they can very much follow up, an additional interest of $1.1 billion will be incurred and the project will, at the very least, be a year late.