UK consulting engineer Arup has agreed to settle an A$2.2bn ($1.6bn) lawsuit arising from the collapse of a company set up to finance, build and operate the Airport Link toll road in Brisbane.
The company was being sued by PPB Advisory, receivers for Airport Link’s former owner BrisConnections, over traffic projections that formed the basis of the project’s business case, and which proved to be extremely optimistic.
The amount of the settlement has not been disclosed, but according to the Australian Financial Review it was more than $100m.
The settlement came after Gerard Cavanagh, Arup’s former lead traffic forecaster, acknowledged in Federal Court that the traffic models devised for Airport Link were "totally and utterly absurd".
It emerged under cross-examination that traffic models for Brisbane’s Airport Link assumed drivers would prefer toll roads because the money was collected electronically.
At one point Mr Cavanagh was asked by PBS’ counsel, "Your model thought that the tolled route was cheaper because it was tolled electronically, didn’t it? It is totally and utterly absurd, isn’t it, sir?"
Cavanagh replied "yes" to both questions.
The 6.7km Airport Link tunnel, which links Brisbane Airport with the CBD, went into receivership in early 2013 – just seven months after opening – after traffic was two-thirds lower than Arup had predicted.
Image: The entrance to the Airport Link tunnel (Taylor Cullity Lethlean)