UK consulting engineer Arup is being sued for US$1.6bn following the collapse of a public-private partnership scheme to build a toll road in northern Brisbane, which was completed in July 2012.
The company set up to operate the scheme went into receivership in 2013 with debts of more than $2.4bn, a failure that the Australian Shareholders Association described at the time as "the biggest construction project disaster in recent history".
The scheme, which connected Brisbane’s central business district to the arterial road that led to the city’s airport, was built by a the BrisConnections consortium, made up of contractors Thiess and John Holland with Macquarie Group as financier. It included 15km of tunnelling and 25 bridges, and had a construction cost of $3.8bn.
Now PPB Advisory, the company that is acting as receivers for the scheme, is suing Arup on the grounds that its traffic projections overestimated the actual number of vehicles by a factor of four.
Negotiations over Arup’s liability have been under way since the collapse of BrisConnections. These have now broken down, and the matter is to move to a trial in the Federal Court in Sydney.
For its part, Arup has issued a cross-claim against Macquarie Group for a contribution to any damages that it faces.
In 2015, Aecom settled another legal action over RiverCity, another collapsed Queensland toll road.
In that case, the Australian arm of the US engineer was sued for $1.3bn but paid $220m and announced that it would not engage in any further traffic forecasts. Aecom’s acknowledgement of liability was seen at the time as opening the door to action against Arup.
Arup employs 1,500 staff in Australia and generates $260m in annual revenue. The firm is best known in the country for its work on the Sydney Opera House.
Image: The airport link (BrisConnections).
All monetary figures are given in US dollars.