Upmarket retailer sues state over Sydney's bungled light rail project

An upmarket Swiss watch retailer is suing the state government for $4 million for losses it claims to have suffered from construction of Sydney's delayed $2.1 billion light rail project.

Watches of Switzerland is the latest in a growing list of companies, including Spanish contractor Acciona, pursing the state's lead transport agency over the 12-kilometre light rail line from Circular Quay to Randwick and Kingsford in the city's south east.

Court documents show Watches of Switzerland's profits have more than halved to $1.3 million in the 12 months to June last year, from more than $3 million in the prior period.

The family owned retailer of luxury watches has a large shop on the ground floor of the five-star Four Seasons Hotel on George Street near the Rocks.

In a statement of claim filed in the NSW Supreme Court, Watches of Switzerland's lawyers said the retailer would prove that further losses had been incurred since July last year, and that more were likely until the light rail line was completed.

Watches of Switzerland claims Transport for NSW's conduct in relation to the light rail project amounts to a “public nuisance and an unreasonable interference” with the retailer's business which “continues to suffer substantial loss and damages”.

Construction of the light rail line began in front of the retailer on George Street in March 2016, which Watches of Switzerland claims has resulted in “excessive noise and dust”.

Watches of Switzerland is suing the NSW government for $4 million for losses it claims to have suffered from construction of the CBD light rail.Credit: Jessica Hromas

Barricades for construction had also significantly restricted pedestrian access to the hotel, it is claimed in the court documents.

Under the government's original plans, major civil construction along the entire route of the line was expected to be finished by April this year, and testing to start this month.

But a $1.1 billion lawsuit against the state by Acciona has revealed that the light rail line is not expected to be opened until March 2020, a year later than the government had planned.

Two months ago, Acciona launched legal action against Transport for NSW for “misleading or deceptive conduct” in the lead-up to it signing a contract in 2014 to design and build the line.

The sub-contractor building the project claims Transport for NSW led it to believe power company Ausgrid had agreed to a plan to deal with utilities under the route of the line when it had not.

Transport for NSW said it would defend the proceedings launched by Watches of Switzerland but declined to comment further while the matter was before the court.

Watches of Switzerland's lawsuit is the first legal action over the light rail project by an individual retailer. However, small businesses and residents are seeking to launch a class action against Transport for NSW for damages within the coming weeks.

And Queensland company VAC Group also has legal action under way against the government in the Federal Court over the project for breach of contract, claiming it is owed more than $4.3 million in damages for delays and additional costs.