03/05/2022 - 15:45

Acciona border battle heads to trial

03/05/2022 - 15:45

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A three-day trial has been set to determine whether WA's COVID border rules are reason enough to allow contractor Acciona to exit Macquarie’s $700 million Avertas Energy project.

Acciona border battle heads to trial
The project was scheduled to be operational by 2021, but it appeared to have stalled.

A date has been set for a three-day provisional trial to determine whether Western Australia’s COVID border rules are reason enough to allow lead contractor Acciona to exit work on Macquarie’s $700 million Kwinana waste-to-energy project.

Last year, Acciona’s industrial and construction arms, along with wholly-owned subsidiary John Beever Australia, filed a legal claim against project owning entity Kwinana WTE Project Co to get out of its engineering and construction contract.

Acciona was appointed to lead the construction of the waste-to-energy project in 2018, the product of a joint venture between Macquarie Capital and Phoenix Energy.

The project, earmarked for Kwinana’s Industrial Precinct, was set to treat 400,000 tonnes of waste annually and produce 36 megawatts of electricity once operational in 2021.

But the project appears to have been beset by delays, and the lawsuit indicates the contractor attributes them to the state government’s border rules.

The Spanish multinational has requested a court declaration the COVID-19 pandemic and WA’s pandemic-related border closures served as a “blockade or embargo” for its workforce and amounted to a force majeure event under the contract.

During a directions hearing before Justice Marcus Solomon in the Supreme Court this morning, the court was told Acciona’s lawyers would file documentary evidence, including the tender contract, and rely on state government legislation affecting the passage of persons to WA.

In response, Kwinana WTE Project Co’s lawyer Tim Boyle told the court it would produce evidence by way of a sworn affidavit by an employee.

Mr Boyle confirmed the defendants would also be seeking all documents relating to travel into WA from Acciona, contending that the directives in question were not real, practical obstacles to workers entering the state.

The defendants also indicated plans to refer to data detailing the number of people that obtained permission to and entered the state to prove the border was not a blockade.

“It’s all very interesting that the WA government put in place these directives, but the question is whether they impacted this project,” he said.

“One means of assessing that is to gauge whether the plaintiff applied for workers to get into the state and whether that application was granted.

“Did they apply for 100 workers to get in? And if they got in, does that constitute a blockade?”

But the impact of requirements for those entering WA, including the 14-day quarantine period, on the actual progress of the works will not form part of the trial.

In line with proposed orders discussed today, Kwinana WTE is expected to produce affidavit evidence by May 20 ahead of the three-day provisional trial, which is scheduled to begin on June 22.

The Kwinana WTE project was one of several of Acciona's WA-based projects, which include the other waste-to-energy project in East Rockingham and the Bunbury Outer Ring Road (the state's largest regional infrastructure project).

It also holds contracts for the construction of the state government's $253 million Bayswater Station upgrade and Kenwick Freight Facility.

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