28/12/2011 - 00:00

BGC payment lifts Perth Arena cost

28/12/2011 - 00:00

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BGC payment lifts Perth Arena cost

The budget for Perth Arena, the indoor stadium under construction in central Perth, has increased to $548 million after the state government negotiated a commercial settlement with BGC Construction.

The state has agreed to pay BGC $27.5 million to settle major contractual claims related to the design of the 15,500-seat indoor stadium, which has a targeted completion date of August 2012.

The settlement required the state to provide an extra $28.2 million in its 2011-12 mid-year budget review. This was on top of $37.5 million in cost increases already in the state budget.

Treasurer Christian Porter claimed the previous Labor government was at fault.

“Inexplicable and incompetent decisions taken by Labor at the time of tender to fundamentally change the contract to make the State liable for design changes and at the same time change the design of the car park have resulted in the State being exposed to significant design risk and now contract costs,” Mr Porter said.

“Combined with the other Labor design changes relating to the structural steel design, the result of Labor’s decisions has been to give rise to substantial claims from BGC for extension of time and related delay damages.

“After an exhaustive negotiation process, the State Government has reached agreement on settlement of all delay claims linked to any cause occurring up to the end of July 2011.

“The recent settlement figure for BGCs claims of $27.5 million represents a significantly lower amount than the $65.4 million originally sought by BGC and in all the circumstances represents the best outcome for the State.

“Importantly, BGC has given a clear commitment to complete construction by the current target of August 2012.

“While the project has suffered due to poor planning and terrible contract decisions by the previous Labor government, the Liberal-National Government is committed to delivering an outstanding, world-class venue to the people of Western Australia next year.”

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