Below Rail Infrastructure, Engineering, Passenger Rail

Sydney Light Rail legal stoush ended with $576m settlement

Transport for NSW has ended a dispute with key Sydney CBD and South East Light Rail contractor Acciona, announcing a $576 million settlement over the extra cost of underground utility work along the project route.

A Transport for NSW spokesperson told Rail Express the department had been in “complex negotiations” with the ALTRAC Light Rail project consortium and its subcontractors, Alstom, Acciona and Transdev, “to try to resolve a number of commercial issues and legal claims”.

“An agreement has now been reached and Transport for NSW has entered into a revised Public Private Partnership with ALTRAC for the delivery and operation of the CBD and South East Light Rail project.”

The spokesperson said the settlement could incur up to $576 million in extra costs over the duration of an extended PPP term to 2036. According to ABC, $129 million of the settlement is being held until construction deadlines are met.

“The Settlement package includes the resolution of over $1.5 billion of legal claims under the Public Private Partnership with ALTRAC,” the spokesperson said.

Separately, Acciona has agreed to withdraw its $1.1 billion legal misrepresentation claim lodged in the Supreme Court.

“This puts an end to past disputes and puts the focus of all parties back on delivering the project for the people of NSW,” the spokesperson said.

“ALTRAC’s private sector shareholders will invest substantial additional equity into the project to meet costs. Most importantly, this agreement ensures customers will have access to modern, reliable light rail services as soon as possible.”

The agreement includes milestone and incentive payments for light rail services to commence in two stages. It sets out target start dates of December 2019 for the first passenger service between Randwick and Circular Quay, and March 2020 for services between Kingsford and Circular Quay.

“If ALTRAC and its subcontractors do not deliver by these dates, they miss out on making revenue from commencing services as well as incentive payments. The final cost of the project will therefore not be known until passenger services start and following a final completion review by Infrastructure NSW, as is standard practice.”

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