Alinta has launched legal action to urgently recover critical parts needed for its delayed Wagerup battery, alleging contractors breached a $182 million contract by withholding the goods.
Alinta Energy has launched legal action to urgently recover critical parts needed for its already delayed Wagerup battery, alleging contractors breached a $182 million contract by withholding the goods.
The energy retailer lodged a writ in the Supreme Court of Western Australia on Tuesday, naming China-based Shanghai Electric Power Design Institute (SEPD) and Sunterra Energy, a South Australian company, as defendants.
In the writ obtained by Business News, Alinta alleged SEPD and Sunterra, as contractors to the Wagerup battery energy storage system, refused to deliver goods for which the company claimed it has paid $109.4 million.
The legal action comes after media reports of Alinta cancelling the initial contract with SEPD and Sunterra last month, and the company appointing GenusPlus to complete the delivery of the 100-megawatt battery under a $50 million contract.
Lawyers for the parties appeared in the WA Supreme Court judge Alain Musikanth today, after Alinta filed an application for urgency.
Speaking to the court, Alinta's lawyer Tom Porter said GenusPlus had been on site for two weeks but was unable to continue work because critical parts were withheld by SEPD and Sunterra.
"The losses on that are about $450,000 a day," he said.
"Genus is on site [but] the components are sitting in a warehouse doing nothing but the defendants don't need them.
"They have no need for them and know exactly how much Alinta needs them."
Counsel for the defendants Kim Lendich pushed for an adjournment in court for her client to have more time to prepare for the application which was only lodged about 48 hours ago.
"I understand there are factual disputes including what was paid and when, but I simply don't have a grasp of that material in the time provided," she said in court.
"I was instructed in the matter yesterday.
"[This] doesn't require the matter to be determined today. There is enough time... to allow us to put on [our] material."
However, Mr Porter wanted Justice Musikanth to decide on the matter today, telling the court that the Wagerup BESS was meant to start operating by end of the January this year.
"The project is already nine months late," he said.
"The position of the defendants is secured, they will get paid.
"[Alinta] would already have lost millions of dollars, the end date is pushed to where we might lose valuable contracts."
An Alinta spokesperson confirmed to Business News that the contract with SEPD and Sunterra had ended.
"We remain focused on achieving the most timely and effective path forward for completion of the facility, and have already commenced work with locally based contractor GenusPlus Group," the spokesperson said.
The claims
The contract between Alinta, SEPD and Sunterra, for the contractors to build the battery energy storage system and substation was priced at $181.9 million and signed in 2023, according to the writ.
Under the contract, contractor goods comprising physical works, equipment, goods and other property are to be returned or provided to Alinta when the agreement is terminated.
The writ said the contractors must deliver the goods if Alinta paid a reasonable amount for them.
In the writ, Alinta claimed it has paid a reasonable amount of $109.4 million for cables accessories, battery storage units, inverter power conversion systems and coupling transformers.
Alinta further alleged it has paid more than what SEPD and Sunterra spent to procure the goods, being $98.9 million.
The contract was terminated on September 12, despite SEPD and Sunterra disputing Alinta’s notice to end the agreement, according to the writ.
However, the contractors did not immediately deliver the paid contractor goods to Alinta when the contract was terminated and instead continued to withhold them, the energy retailer claimed.
Alinta alleged, in the writ, that the contractor refused to deliver the goods and stated so in a letter dated October 6.
In the writ, Alinta sought a court declaration that the contractors breached the agreement by failing to deliver the paid goods.
The company also sought an injunction to force the contractor to deliver the goods, and associated costs with the legal action.
Construction of the 100-megawatt Wagerup battery was marked by a sod-turning ceremony in November 2023.
The project was expected to come online by early this year.
Last month, GenusPlus Group announced to the market that it was awarded a $50 million contract to finish the delivery of the Wagerup battery and substation.
In the ASX statement, Genus said it would undertake remaining project works to complete the construction and commissioning of the Wagerup plant, including engaging with 100 local workers.
Genus managing director David Riches said the award built on the company’s existing relationship with Alinta that included a previous contract award over the latter’s battery system in South Australia.
“We’re proud to have been trusted by Alinta to complete this important BESS project safely, efficiently and in a timely manner,” he said.
“This award reflects the reputation Genus has developed in a relatively short period of time.”
