Holdfast Training Services Trial Blog

This week there was some interesting developments in the ongoing dispute between the  WGTP Client and Contractor.  As a reminder, Transurban is acting as the Client and funding ~£2.8Bn with the State Government funding ~£0.82Bn.

The Age Article

Australian Financial Review Article

In summary, Transurban is seeking an injunction at the Supreme Court to prevent ‘premature’ arbitration by the Contractors over the disposal of contaminated soil.  In Supreme Court documents, the contractors have stated Transurban has engaged in “misleading or deceptive conduct…in relation to the extent of PFAS affected spoil likely to be encountered at the site.”

This case highlights the importance of ‘back-to-back’ contracts as Transurban have repeatedly approached the State Government requesting to terminate the Project Agreement if the Contractor’s claims of a force majeure event are successful.  The Victorian Government’s response so far is “that no force majeure event has occurred”.  I think the merry-go-round will continue to spin for a long time yet.

My assessment is that Transurban’s attempts to delay arbitration proceedings is to buy time to gain a better understanding of their predicament.  More time gives the lawyers more opportunity to find wiggle room in the Project Agreement.  Knowing where they stand with the Project Agreement provides increased certainty on where final arbitration costs or penalties could end up (quite literally passing the buck…).  If Transurban enter arbitration proceedings knowing the Project Agreement is/isn’t going to be terminated, they will have a stronger negotiating position and will know how much they will need to ‘invest’ in the process and their lawyers’ fees.

Work on the project sites continues however job losses are now at 450 (~11% of the workforce) due to the impasse.  Although initially targeting site operatives this month the engineering and management teams have been hit with further cuts at engineering level expected.  On the day John Holland posted a ~£33M annual loss, its ironic that the only winners in all of this will probably be the lawyers…