29/05/2009 - 09:04

State, Leighton settle rail line dispute

29/05/2009 - 09:04

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The state government has settled outstanding costs over the Perth to Mandurah rail line at a substantially lower amount than what contractors had sought.

The state government has settled outstanding costs over the Perth to Mandurah rail line at a substantially lower amount than what contractors had sought.

Minister for Transport Simon O'Brien said Leighton Contractors, representing the Leighton Kumagai joint venture, had initially sought $272.8 million for the central business district part of the project.

"The State Government was able to settle with Leighton Contractors for the significantly smaller amount of $43.675 million, while avoiding years of costly litigation and risk of significantly higher costs," he said.

"This settlement is in addition to the $7.98 million cost increase, resulting from a judgement handed down late last year by the Supreme Court in relation to 'rise and fall' provisions of the City Project contract."

The final cost of the CBD part of the project, otherwise known as Package F, was settled at $439.3 million, excluding legal costs which have yet to be determined.

The total cost of the rail line, completed around 18 months ago, is yet unknown.

 

 

The announcement is below:

 

 

The protracted legal dispute between Leighton Contractors Pty Ltd, representing the Leighton Kumagai Joint Venture, and the former Labor government over the CBD portion of the Mandurah Line has finally been settled.

The final cost of the CBD part of the project, Package F, has been settled at $439.3million.

Transport Minister Simon O'Brien said that upon assuming office, the Liberal-National Government confronted the challenge of sorting out many issues left by the previous Labor government

"One of those was a long running legal dispute over cost blowouts on the CBD part of the Mandurah railway," Mr O'Brien said.

The Minister said that Leighton had initially sought $272.8million to settle all outstanding matters on Package F.

"The State Government was able to settle with Leighton Contractors for the significantly smaller amount of $43.675million, while avoiding years of costly litigation and risk of significantly higher costs," he said.

"This settlement is in addition to the $7.98million cost increase, resulting from a judgement handed down late last year by the Supreme Court in relation to 'rise and fall' provisions of the City Project contract."

The only matter remaining is Leighton Contractors' legal costs in respect of the rise and fall litigation. The company's claim has been submitted for taxation by the Supreme Court and the parties are awaiting the court's determination.

"Therefore, the cost of the Perth-Mandurah railway is still rising, some 18 months after its completion," Mr O'Brien said.

"The State Government still does not have a final total cost figure, despite the previous government's denials of cost blowouts and claims of fixed price contracts."

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