Appeal bid fails after $730 million pipe contract stalls

A CONSTRUCTION company that was tasked with laying a gas pipeline from the Surat Basin to Gladstone has been unsuccessful in its bid to appeal an earlier decision and for compensation, after it claimed the company that issued the contract had breached its contractual responsibility.

The company was requesting additional time to appeal an initial decision made last year in the contractor's favour.

The dispute arose after McConnell Dowell Constructors mobilised its workforce to construct the 528 kilometre underground pipeline, only for construction to be temporarily suspended because it claimed the company behind the project, QCLNG Pipeline Pty Ltd, had not received the necessary approvals.

McConnell Dowell Constructors claimed in the Brisbane Supreme Court it had a contract dated August 23, 2010, to design and construct a natural gas pipeline and associated facilities for QCLNG.

The contract was worth $730 million.

The court heard McConnell Dowell Constructors was ready to begin works on February 23, 2011, but was prevented from undertaking those works until June 12, 2011, after QCLNG ordered the suspension of work.

The court heard McConnell Dowell Constructors claimed the reason for the suspension was that QCLNG had not obtained environmental approvals required by Commonwealth and State legislation.

The suspension was lifted when the approvals were given for the work.

McConnell Dowell Constructors claimed that it ought to be compensated for the period of suspension because it had to pay for an idle workforce and equipment.

However, the Brisbane Supreme Court found there were many other factors at play which resulted in QCLNG suspending work, and concluded those factors reduced the chances of McConnell Dowell Constructors being able to appeal the decision based on points of law.

Justice David Jackson dismissed McConnell Dowell Constructors' application.