East Rockingham project heads to court

Acciona has locked out the owners of the East Rockingham Waste to Energy plant, following a dispute believed to be north of $100 million.

It’s another contractual battle in Western Australia for the Spanish multinational, which was in the Supreme Court last year over force majeure claims at the Kwinana Waste to Energy project.

See more: Acciona fails in force majeure bid

The East Rockingham plant had earlier been pegged for completion in the first quarter of this year.

That was on a fixed price contract estimated to cost $511 million.

The consortium awarded the engineering, procurement and construction contract for the project to Acciona in 2020, with the Spanish contractor saying it would be in partnership with Hitachi Zosen Inova.

But Acciona and the ownership alliance, including Masdar Tribe Energy and John Laing, have fallen out, and the owners claimed they have been locked out of site since February 10.

Legal representatives for the owners and the contractor attended a hearing in the Federal Court’s WA registry today.

The plant owners alleged Acciona and HZI have breached the contract and engaged in unconscionable conduct by restricting their access to site.

Barrister Kanaga Dharmananda, on behalf of the East Rockingham project owners, today told the court the contractors previously enjoyed a non-exclusive licence to the site.

But that had changed dramatically.

The owners are seeking to regain access to the site immediately, with Mr Dharmananda suggesting the senior executives of all parties involved need to hold a meeting as soon as possible.

“At least a part of the application must be resolved with extreme haste,” he said.

Access to the site was allegedly restricted due to health and safety reasons.

Mr Dharmananda said resolving the proper construction of the EPCC contract was at the heart of the emergency hearing.

“The question is whether EPCC’s recent imposition of conditions is within the contract,” he said.

Lawyer for Acciona, Kate Pedersen, rebutted the claims in court today.

“The EPCC doesn’t accept that there has been restricted access … access will be given if conditions are met,” Ms Pedersen said.

Federal Court Justice Katrina Banks-Smith ordered the parties to undergo mediation before March 10, when the respondents must file their statements in response.

The parties also agreed to have their senior executives meet before starting mediation.

Acciona was unable to respond to requests for comment.

East Rockingham chief executive Jason Pugh confirmed the dispute.

“The court action today was to resolve a contractual matter regarding site access between the owners of the East Rockingham Waste to Energy Facility and the EPC Contractors Acciona, John Beever (Aust) and HZI,” Mr Pugh said in a statement to Business News. 

“We hope that proceedings conclude quickly and bring an end to the matter.”

Mr Pugh previously told Business News that he anticipated the first waste to be fed into the East Rockingham plant in the fourth quarter of this year, despite the project running about 18 months late.

In a statement filed to the federal court's WA registry, East Rockingham project owners, as the employer, claimed its representatives regularly attended the site without controversy and worked from onsite offices on a daily basis.

East Rockingham claimed its project manager could not enter the site and that his access card was cancelled on February 10, a day after the parties tried to resolve commercial issues including allegations of force majeure and time and extensions.

A representative of one of the project's shareholders reportedly travelled to Perth from Queensland for a site visit, only to be denied entry, according to the court statement.

East Rockingham alleged the restricted access to site has impacted its relationship with direct subcontractor Civcon and operator Veolia.

Veolia did not respond to a request for comment.

Acciona, as lead contractor for Avertas Energy's Kwinana waste-to-energy plant, has claimed in court documents that the Kwinana project had incurred $318 million in cost overruns.