Multiplex sues The Star over delays to $2.8bn Queen’s Wharf resort project in Brisbane

Construction giant Multiplex has launched legal action against the owners of the $2.8bn Queen’s Wharf development over construction delays.

Construction giant Multiplex is suing Star Entertainment Group over additional costs to build its $2.8bn Queen’s Wharf development amid an increasingly costly legal tit-for-tat.

Star told the ASX that Multiplex has launched a damages claim in the Brisbane Supreme Court against Destination Brisbane Consortium (DBC), the joint venture between the group and its Hong Kong-based partners.

The integrated resort development in the heart of Brisbane faces cost overruns of at least $260m and an opening date more than a year behind the original schedule. The group said it had been in “ongoing discussions” with Multiplex regarding disputed claims for the additional costs, extensions of time and damages.

The dispute had its genesis more than two years ago amid pandemic construction delays and is set to become an extended legal battle in the countdown to the planned opening next year. DBC also has claims against Multiplex for damages in relation to delay in achieving key milestones under the contract. Star shares closed 2.5 per cent down at 99c on Monday.

Construction giant Multiplex is suing over construction delays on the Queen’s Wharf development.

Star has previously flagged the project would open at the end of this year, but this has now been pushed back to next April.

Multiple is seeking to win the court battle with Star over extensions of time, milestone dates, damages and amounts payable in connection with the construction contract.

Star disclosed to the ASX last year that the construction contract with Multiplex has provision for liquidated damages payable on key milestones. Liquidated damages are predetermined damages written into a contract.

The consortium will defend the proceedings and Star said it “will keep the market informed upon the filing of DBC’s defence and any counter claims.”

DBC is 50 per cent owned by The Star Entertainment Group, with 25 per cent controlled by Chow Tai Fook Enterprises and 25 per cent by Far East Consortium.

Construction progresses on the Queen’s Wharf development. Picture: Lyndon Mechielsen

The claim comes after Star Entertainment told shareholders in July 2022 that its Brisbane casino project would be delayed by some six months – and come in over budget – due to escalating construction and labour costs.

At the time, it said the total cost of the project will be around 10 per cent higher than the previous guidance of $2.6bn “due to “escalating construction material costs, labour shortages (and) supply chain challenges”.’

Star chief executive Robbie Cooke said that the revised opening date followed careful consideration of current progress by its builder.

“Queen’s Wharf has not been immune from the types of pressures that other major infrastructure projects across Australia have encountered,” Mr Cooke said.

The Queen’s Wharf’s sports bar.

Mr Cooke admitted the company was disappointed by the delay but insisted the “transformational development” will be worth the wait.

“Queen’s Wharf will be a game-changer for a city that continues to attract the eyes of the world as we charge towards the 2032 Olympic and Paralympic Games,” he said.

Star said in 2021 that the opening of the project would be delayed by months as Covid-19 shutdowns across the country played havoc with the construction sector.

At the time, Star said the opening date would be pushed back from late 2022 to the first half of 2023 after the builder “showed some areas of delay in their program.”

Star said the builders, being led by construction giant Multiplex, were revising their program of work and it remained under close review.

Star said it did not know the reasons for the delay but it came amongst rising concern from developers and builders that the global Covid-19 pandemic was delaying the completion of projects. No principal contractor has been selected for the additional two towers that have been approved as part of the project. The timing of construction also had not been decided.