New Royal Adelaide Hospital builders seek fresh $50m bailout as State Government legal row escalates
EXCLUSIVE: The builders of the trouble-plagued new Royal Adelaide Hospital have sought a fresh multi-million dollar bailout amid a bitter legal row with the State Government.
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THE builders of the trouble-plagued new Royal Adelaide Hospital have sought a fresh multimillion-dollar bailout amid a bitter legal row with the State Government.
The consortium behind the state’s biggest infrastructure project has sought an extra $50 million injection of private equity from shareholders to “shore up its ongoing solvency”, the Supreme Court has heard.
The Advertiser understands the money will be used as a “stop gap” to help pay for the $1 million a day in delay costs invoked by the government, before “commercial acceptance” is agreed or when the hospital is operational.
The builders are battling to fix a range of defects on the $2.3 billion North Terrace project, which is almost 12 months behind schedule.
The government has sought a $600 million compensation payment for alleged defects as well as $1 million a day for the ongoing delays.
Senior consortium officials admit the new money would not be available if they failed to secure an injunction stopping their sacking, meaning they could face significant financial problems.
The Advertiser yesterday revealed taxpayers face a countersuit of up to $4 billion if the government delivers on a threat to tear up the contract.
The court heard that while the builders are funding the project, using almost $1.72bn in debt, they won’t get any money until “technical completion”.
Under the contact, “quarterly services payments” will be made over the next 30 years.
The disclosures emerged at a hearing last week amid fears Health Minister Jack Snelling could “terminate” the contract, meaning a new builder would be appointed and further delay opening.
In an escalation of the parties’ legal row, SA Health Partnership Nominees Pty Ltd and SA Health Partnership Securitisation Pty Ltd have sought official protection of its commercial agreement.
The new court row was provoked last week after Mr Snelling rejected a “cure plan” penned by the SA Health Partnerships consortium.
His rejection came over what he said were safety concerns for patients at the new hospital — claims rejected by the consortium.
A trial is listed for next week while Justice Malcolm Blue has ordered the parties into mediation to settle the injunction dispute.