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Light rail contract ‘incompetent’ as delay fines capped to 15 days

BUILDERS of Sydney’s delayed light rail project can only be fined for failing to meet its opening deadline run for just 15 days, with a public hearing being told the NSW government’s contract with consortium Altrac was ‘insane’ and ‘incompetent’.

FINES imposed on the builders of Sydney’s delayed light rail project for failing to meet its opening deadline run out after just 15 days, it emerged today.

A public hearing was told today that under the contract to build the $2.1 billion light rail, consortium Altrac will be fined $500,000 a day for for every day the project is delayed, per zone along the route. The project has 31 zones.

The light rail from Circular Quay to Sydney’s eastern suburbs is now officially now expected to finish in March 2020, despite an original completion date of March 2019.

David Shoebridge called the light rail contract “insane”. Picture: AAP Image/Jeremy Ng
David Shoebridge called the light rail contract “insane”. Picture: AAP Image/Jeremy Ng

The hearing, at NSW State Parliament, heard the light rail project would solve part of the city’s congestion, with buses alone unable to solve growing congestion in the city’s east.

Under questioning from David Shoebridge, Greens MLC, officials from NSW Transport said the financial penalties cut out after just 15 days.

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“There’s a half a million dollar penalty clause … when does that kick in?” Mr Shoebridge asked.

“When can the people of NSW rely upon a contractual provision that actually starts forcing the completion of this project?

Fines imposed on the builders of Sydney’s delayed light rail project for failing to meet its opening deadline run out after just 15 days.
Fines imposed on the builders of Sydney’s delayed light rail project for failing to meet its opening deadline run out after just 15 days.

Transport NSW deputy secretary, infrastructure and services Stephen Troughton replied the penalties were “capped out” at $7.5 million.

Mr Shoebridge replied: “Is that seriously the contract you relied upon — once there are more than 15 days delay there’s no liquidated damages?

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“That’s the most incompetent contract I can imagine for a project like this. That’s insane.”

He alleged the builders were “laughing” at the government.

Mr Troughton said under the contract, Altrac contracted out Acciona to build the line.

“It’s not like a standard design and construct contract,” he said. He said under a standard contract, the department would appoint the contract itself.

Consortium Altrac will be fined $500,000 a day for every day the project is delayed.
Consortium Altrac will be fined $500,000 a day for every day the project is delayed.

“We would have far greater control over the contractor. In this instance we have a contract with Altrac … they are sub contracted three parties build their light rail.

“What that means is means is (NSW) Transport is not directly in contract with Acciona, who is doing the civil construction.

“This is a very very different form of contract. We don’t have any relationship with those parties.

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“We have agreements with Altrac. Altrac … has large amounts of liquidated damages around finances with their contractors.”

Mr Shoebridge asked if there was “no pressure” the government could bring to the light rail builders after 15 days.

“That was a deliberate design structure because you handed over all that responsibility to a third party?”

Mr Troughton said the government did not have a direct contract with Acciona who are doing the civil works.

“The government can’t pressure them to finish?” Mr Shoebridge asked. “Can you understand how outraged residents will be suffering night after night, noise and dust, when they hear there’s at least another year of this construction project and the government was so incompetent they can’t pressure contractors to finish.”

Transport co-ordinator Margaret Prendergast said the noise of the construction would cease when the civil works had finished, which would be January or February next year, not 2020.

Original URL: https://www.dailytelegraph.com.au/news/nsw/light-rail-contract-incompetent-as-delay-fines-capped-to-15-days/news-story/5536596886fe3dac1426651528f278bf