Motivation for Proposed Wooloowin Shaft
We suspect...
"TJH1 find the soil is bad back in March 20092. TJH realise this is going to cost them. TJH know it will not cost BC3, due to liquidated damages clauses. TJH find the soil is really bad - about 6 months bad4. TJH realise this will cost them $72 million5 just in liquidated damages6 to BC. At this stage BC just don't care. BC will get their money whatever happens. TJH get very agitated about the loss of $72 million and scrounge around, or pull out of the closet, some serious alternatives. TJH know the only motivation for BC is money. TJH propose an alternative which will enable BC to deliver early7. Early delivery means early toll revenue. This equates to an early profit of $12 million5, monthly, for BC. The alternative is lucrative enough to allow TJH to negotiate a financial reprieve8. Done deal - BC win, TJH win. Let's raid Wooloowin9."

Footnotes

  1. TJH; Thiess John Holland, Contractor for Airport Link Project.
  2. March 2009; Bad soil first discovered by TJH. Source; Letter from David Lynch, CEO of City North Infrastructure, dated 19 August 2009.
  3. BC; BrisConnections, Operator for Airport Link Project.
  4. 6 months bad; from Statement by Charles MacDonald, General Manager Construction at BrisConnection at Residents Meeting on 19 August 2009.
  5. $72 million; the loss of profit for 6 month late delivery (equivalent to $12 million per month). Source; Profit Spreadsheet produced from BrisConnections Product Disclosure Statement 2008.
  6. Liquidated Damages; TJH are on a fixed price, fixed time contact to BrisConnections. TJH pay BrisConnections liquidated damages should the project run late. Source; BrisConnections Product Disclosure Statement 2008.
  7. Initial modelling shows the proposed Wooloowin Worksite would allow TJH and BrisConnections to complete Airport Link significantly earlier than June 2012, roughly 6 months. City North Infrastructure CEO, David Lynch, was asked via email on the 11 September 2009, and by registered post, for revised construction schedules for clarification but has not responded.
  8. BrisConnections can, at their discretion, can pay TJH a bonus of up to $72 million for early project delivery. Source; BrisConnections Product Disclosure Statement 2008.
  9. Wooloowin Worksite Modification Request for Project Change document.