Qld: Disclaimer will stop light rail lawsuits, Bredhauer

AAP General News (Australia)
08-03-2000
Qld: Disclaimer will stop light rail lawsuits, Bredhauer

By Barbara Adam, State Political Correspondent

BRISBANE, Aug 3 AAP - A disclaimer buried in tender documents could have saved the
Queensland Government a multi-million lawsuit from companies involved in the aborted Brisbane
Light Rail Project.

The government scrapped the $235 million project last month after state cabinet refused
to inject an extra $80 million to keep the project viable.

Transport Minister Steve Bredhauer today revealed crown law had advised him the state
government was immune from any legal action by the consortia to obtain compensation for
the millions of dollars they spent preparing for the project.

"The advice from crown law indicates that the government had the right to terminate
the contracts in accordance with the documentation that was received by the consortia,"

Mr Bredhauer told journalists outside today's budget estimates committee hearing.

"At this stage the government has no plans to provide compensation and is confident
that its legal position would be borne out should it be tested."

Mr Bredhauer said the disclaimer in the tender documents was an unusual clause but
had been included because the state government wanted the private sector to accept a considerable
amount of the project's capital risk.

"What the bids clearly demonstrated was that the private sector was not prepared to
accept the level of capital risk we anticipated when we first discussed it in cabinet,"

he said.

"In fact the state government would have been required to contribute a least an additional
$80 million (and) on that basis we made the decision not to proceed."

However opposition transport spokesman Vaughan Johnson said he did not believe the
consortia of light rail tenderers had been of the understanding that the government could
pull out of the project at any time, despite the disclaimer in the documents.

Mr Johnson said the companies involved in the bid would have spent up to $4 million
to prepare for the ill-fated light rail project.

At the hearing, Mr Bredhauer admitted the government was not sure what had happened
to last year's $12 million budget allocation towards the ill-fated Brisbane Light Rail
Project.

"There was expenditure that was incurred," he told the committee.

"I'm still awaiting further advice.

"I anticipate that we will have a further idea in the near future."

The opposition was highly critical of Mr Bredhauer's confession, saying the government
was in the driving seat and should know what was happening with its money.

AAP bja/jhm/bwl

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