Leighton-Kumagai lodges new claims over city rail project

1/02/06
The Leighton-Kumagai Joint Venture partners (LKJV) have lodged a half-page document making $141million worth of additional claims in respect to the city rail contract.
Planning and Infrastructure Minister Alannah MacTiernan said almost without exception there was no further documentation of the claims, which were sent to the Public Transport Authority (PTA) yesterday.
"It would appear that this was a document cobbled together in haste to provide substance to exaggerated statements made by Leighton Holdings chief Wal King," Ms MacTiernan said.
The Minister said the PTA was unable to even identify what some of the claims referred to.
"During the last two years of the city project there have been approximately $50million of claims by LKJV," she said.
"Now, virtually overnight, we have had an extraordinary addition of $141million of claims.
"Like all claims, they will be dealt with under the dispute resolution procedures set out in the contract.
"There is nothing in the half-page document that would lead us to believe there is any substance to the $141million worth of additional claims."
The level of claims against the city rail project has risen from $50million to $191million, even though the total contract price is $324million.
"Fortunately, it is in the interest of the joint venturers to complete the project as quickly as possible, and these claims will not impede good progress being made on the rail project."
The State Government is adamant that LKJV entered into a contract under which it undertook to absorb almost all of the risk.
"We are not going to agree to a change in that risk profile and we will not be using tax payers' funds to release Leighton from its contractual obligations," Ms MacTiernan said.
The Minister said the Government would continue to resist any attempt by contractors to ramp up price variations.
Minister's office: 9213 6400