The Western Australian Government has reached agreement with BGC Construction on settlement of major contractual claims related to the design of the Perth Arena.


Treasurer Christian Porter said the long standing claims were directly related to a decision by the previous government to change the contract with BGC to make the State liable for design changes and at the same time also make major changes to the design, including the decision to move the arena car park to the basement during the middle of the tender process.


“Inexplicable and incompetent decisions taken by Labor at the time of tender to fundamentally change the contract to make the State liable for design changes and at the same time change the design of the car park have resulted in the State being exposed to significant design risk and now contract costs,” Mr Porter said.


“Combined with the other design changes relating to the structural steel design, the result of Labor’s decisions has been to give rise to substantial claims from BGC for extension of time and related delay damages.


“After an exhaustive negotiation process, the State Government has reached agreement on settlement of all delay claims linked to any cause occurring up to the end of July 2011.


“The recent settlement figure for BGCs claims of $27.5million represents a significantly lower amount than the $65.4million originally sought by BGC and in all the circumstances represents the best outcome for the State.


“Importantly, BGC has given a clear commitment to complete construction by the current target of August 2012.


Settlement terms are contained in a legally binding Deed, confidential to the State and BGC.