Energy2U project stalled by contractual dispute

A contractual dispute is threatening to stall Australia’s largest energy infrastructure project.

Arogen, an underground horizontal directional drilling specialist, claims Leighton Contractors has failed to pay nearly $6 million for work carried out on the Kogarah to Beaconsfield leg of Ausgrid’s New South Wales Energy2U project.

Arogen is refusing to continue working with Leighton while the money is outstanding. The project has already been delayed by wet weather and heritage issues.

To try to break the impasse with Leighton, Arogen says it sought an adjudication of monies owed under the Building and Construction Security of Payments Act 1999 (NSW). It was determined that Leighton owed Arogen over $5.7 million.

However, Leighton responded with a Supreme Court injunction application which blocked Arogen from seeking payment directly from Ausgrid. Leighton paid $5.7 million to the Supreme Court, which will hold the money until the matter is heard in court in October.

“It’s hard to believe that a big corporate player can so ruthlessly bleed a small guy into the ground like this,” said Arogen owner Tony O’Meley. “We’re being dragged into court with a bayonet at our ribs over silly contractual technicalities when all we want is payment for the work we’ve done.”

“The really outrageous thing is that the project is funded by public monies - this is tax payer’s money that’s been assigned to Leighton Contractors for infrastructure delivery. How can it be that the money is now locked away in a court vault?”

O’Meley said he is happy to submit to the NSW Government’s inquiry into workers and suppliers being left out of pocket because of struggling and collapsing construction companies.

“If Leighton Contractors think they can use their size to knock us around, I’m putting them on notice that they’re in for a fight,” O’Meley said. “Arogen might be a small player, but we’re muscled with principles and conviction and we won’t be backing down.”