GBC NEWS

Saturday 25 October 18:42

Government wins Airport Access Tunnel claim against OHL

Author: GBC

Date: 15 April 2014 at 08:01

The Airport Access Tunnel Project will go ahead – the Government has been entirely successful in its legal battle against OHL. 

The High Court of Justice of England and Wales has today ordered that OHL, the company whose contract was terminated in 2011 by the previous GSD Government, now pay the Government the completion costs of the project, the largest claim for damages in Gibraltar’s history. 

Chief Minister Fabian Picardo has also revealed that the Government will also try to recover legal costs.

The judgement delivered by Mr Justice Ackenhead at the High Court of Justice rules that the Gibraltar Government was correct in the way it terminated the Contract with OHL in the summer of 2011. It is now entitled to recover all costs associated with the termination and completion costs of the project, over and above OHL’s original contract price. The price at tender was just over £30 million. 

Further legal hearings are now expected to determine the exact amount which OHL will have to pay, but it could be up to an extra £60 million, plus damages. The Government is also looking to recover its substantial legal costs.

The Chief Minister says he’s worked closely with his predecessor, Sir Peter Caruana, and has this morning informed Opposition Leader Daniel Feetham of the judgement.  Mr Picardo says this issue has been one of the most challenging aspects of the last 28 months in office, and wants to thank his legal team for their hard work.

LOOKING FORWARD

The project to build an access tunnel beneath the runway will now go ahead. A pre-qualification process to determine what companies will be able to take on the works as they are now, but Number Six wants to get started as soon as possible.

BACKGROUND

The GSD Government contracted OHL to carry out  the tunnel works, but terminated the contract in July 2011 claiming the company had failed to comply with the terms. In May 2012, the GSLP Liberal Government was served by OHL for just over £20 million, plus £6.5 million in damages for breach of contract.

Proceedings were issued in the High Court of Justice of England and Wales. Number Six said at the time it would ‘strenuously defend the claims’ and also file a counter-claim.

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