Friday, 04 December 2020 08:10

Basslink told to pay $38.5m damages in 2015 interconnector outage dispute Featured

Basslink told to pay $38.5m damages in 2015 interconnector outage dispute Courtesy Basslink

Three arbitrations into a dispute between Basslink — the company that manages the undersea data and power cable that links Tasmania to the Australian mainland — the State of Tasmania and Hydro Tasmania have ended, with the outcomes favouring the first two entities mentioned.

A statement from Basslink on Thursday said the arbitrator had found in favour of Tasmania and Hydro Tasmania and awarded damages of $38.5 million to be paid by Basslink.

Hydro Tasmania is a government-owned body and is Australia’s largest generator of clean, renewable energy.

The disputes in question are over an outage of the Basslink interconnector in 2015. The outage was not fixed for six months.

In March 2018, the Tasmanian Government formally lodged a notice of dispute, claiming damages of $122 million for the outage. The dispute went to arbitration in April.

On 20 December 2017, Hydro Tasmania said it had identified the cause of the Basslink failure and cited two experts, from international engineering consultancy DNV GL which is recognised as a global leader in the field, who said it was because Basslink had exceeded its design limit.

But two days later, Basslink chief executive Malcolm Eccles dismissed the findings, saying that the expert reports cited as proof merely outlined one possible cause of the outage.

In December 2018, Basslink issued a statement saying: "Basslink has consistently maintained its position that the cable failure was a force majeure event under the Basslink Services Agreement and Basslink Operations Agreement. The recent CCI Report further supports Basslink’s view that the cable failure was a force majeure event under the BSA and BOA."

CCI is Cable Consulting International, a UK-based firm regarded as a leading submarine power cable expert, which was initially asked to conduct an inquiry into the cable failure.

On Thursday, the Basslink statement said its claim for for unpaid fees of $31 million against Hydro Tasmania, relating to the period of the outage, was not recoverable, adding that disputes over the Asset Management Plan and the Marine Disaster Recovery Plan had been separately settled.

Eccles said the organisation would take time to review the rulings and determine the next steps. “We are obviously extremely disappointed with the outcomes,” he said.

“We will need some time to review the decisions and consider the implications. In the meantime, Basslink continues to operate efficiently and reliably, connecting Tasmania to the national electricity market.”

Contacted for its take on the arbitrator's decision, a Hydro Tasmania spokeswoman said the details of the award were under consideration and it was not appropriate to comment at this stage.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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