State Government settles RailLink delay claim.

The Public Transport Authority has signed a $21.8 million settlement with the RailLink Joint Venture as a fixed payment for the contractor's delay and extension of time claims on the Southern Suburbs Railway.

RailLink was awarded a $325million contract to build 70km of double track rail and signalling and communications systems between Perth and Mandurah.

The project also involves earthworks, drainage, and the design and construction of 16 road, rail and pedestrian bridges and underpasses between Glen Iris and Mandurah.

Planning and Infrastructure Minister Alannah MacTiernan said that through no fault of its own, RailLink was facing significant delays for which it would have been entitled to claim.

"This settlement represents fair value for the State and the $21.8million had already been factored into the revised New MetroRail budget announced in April," Ms MacTiernan said.

The Minister said under the contract amendment, RailLink would withdraw all existing claims for delays, extensions of time and disruption and would forgo future claims for a defined period.

"RailLink is required to agree to a revised tracklaying and commissioning program consistent with the Southern Suburbs line coming into operation in July 2007," she said.

"This agreement does not alter the terms of any other contract or the right of the PTA to impose liquidated damages for late completion of other contracts."