WA facing fresh legal claims over Optus Stadium, Lendlease’s Waterbank project

WA taxpayers could be forced to write another cheque for Perth’s landmark Optus Stadium amid the latest dispute to emerge from the $1.4bn project.

WA Premier Mark McGowan at Perth’s Optus Stadium. Picture: AAP

West Australian taxpayers could be forced to write another cheque for Perth’s landmark Optus Stadium amid the latest dispute to emerge from the $1.4bn project.

The state government is also at loggerheads with Lendlease over ground stability issues at a signature $1.3bn urban regeneration project on the banks of the Swan River that could prove “protracted and costly” to resolve.

WA’s latest mid-year budget update, released on Monday, revealed how the state was in dispute with Westadium Project Co, which holds a 25-year contract to run the 60,000-seat Optus Stadium. The Westadium and Lendlease disputes were listed under contingent assets and liabilities of the state’s latest mid-year financial projections statement.

“Additional costs may be incurred to finalise contractual entitlements associated with the Optus Stadium,” WA’s Treasury said in the statement. “The state and Westadium Project Co Pty Ltd are currently in negotiations to finalise these matters.”

Optus Stadium has had the highest total attendances of any sports venue in Australia this year despite hosting a fraction of events it would have expected in a non-COVID year.

The cost of the stadium’s development and the state’s funding commitments for it have been a source of concern for Premier Mark McGowan, who orchestrated the sale of the stadium’s naming rights soon after he came to power in 2017.

 Westadium is part-owned by AMP Capital, whose Community Infrastructure Fund bought a 50 per cent stake in the group from infrastructure group John Laing Group in March last year.

Aberdeen Infrastructure Investments was the other initial ­equity partner in Westadium, while Brookfield Multiplex was subcontracted by Westadium for the design, construction and commissioning of the stadium.

It is understood the dispute relates to the construction contract.

The Lendlease dispute, meanwhile, centres on problems at the Waterbank project, sandwiched between the WACA Ground and the Swan River at the eastern end of the Perth CBD.

The project is expected to eventually be home to 1300 residential units, 150 affordable housing units and office and retail space across several towers.

The project was unveiled in 2011 and due to start construction in 2016, but the government revealed that state land development agency DevelopmentWA was in negotiations with Lendlease over an “excessive settlement event” in soil at the project.

“DevelopmentWA and Lendlease acknowledge that given the complex and interrelated technical and legal matters involved, predicting the outcome of any litigation is very difficult and will turn on the testimony of technical experts, which is likely to be protracted and costly,” WA Treasury said.

“There are commercial justifications on both sides to negotiate a pathway for the project to proceed, and the parties intend to negotiate a commercial resolution of Lendlease’s claim for excessive settlement costs.” Financial impact of the ongoing negotiations could not be “reliably quantified”.

Lendlease’s WA general manager of development, Anthony Rowbottam, said the project was still pushing ahead despite the dispute. “We’re looking forward to working closely with DevelopmentWA, and bringing this 6ha urban regeneration project to life.”

The WA government is also involved in three separate proceedings in the High Court against Queensland billionaire Clive Palmer and his companies.