Basslink saga with Tasmanian government referred to arbitration

Basslink has revealed that its dispute with the state of Tasmania will be referred to arbitration after the two were unsuccessful in resolving it during "without prejudice" meetings.

"Unfortunately, the dispute was not resolved, and has led to Basslink being notified by the state today that the dispute is referred to arbitration. Basslink intends to vigorously defend itself in the arbitration and continues to reserve all its rights in this matter," it said on Friday.

"Basslink maintains its position that there is no proper basis for these claims."

The Tasmanian government had last month said it is seeking AU$122 million in compensatory damages from Basslink due to a months-long outage of the wholesale telecommunications and energy subsea cable.

Basslink has continually refuted claims by the state government that it breached the Basslink Operations Agreement (BOA) contract it has as the operator of the submarine cable.

"As part of the commissioning of the Basslink Interconnector in 2006, the Basslink Interconnector was rigorously tested to ensure the design and construction requirements were satisfied," the company previously said.

"Given that the Basslink Interconnector was completed and commissioned more than a decade ago, Basslink is extremely surprised at these very belated allegations by the state and strenuously denies that any warranties under the BOA were breached."

According to Basslink, an independent inspector had signed off the design, construction, and commissioning requirements.

"The state, through Hydro Tasmania, was very closely involved in the design, construction, and commissioning process. This involvement included attending various meetings with both Basslink and the manufacturers," the company argued.

"Basslink maintains the cable failure was a force majeure event."

The Tasmanian government's threats of legal action against Basslink followed reports from two global experts provided to Hydro Tasmania in December that found the outage of 2015-16 was caused by Basslink exceeding its design limit, which then degraded the cable.

Hydro Tasmania, a state government business enterprise that is responsible for a majority of the state's energy generation, at the time said the findings "vindicate" its decision to have the outage investigated.

Basslink responded by saying the outage was not caused by anything other than a chance occurrence.

The Basslink Interconnector was down from December 2015, with Basslink finally completing its cable jointing repairs in June 2016 following months-long delays due to excess water damage and inclement weather.

Basslink on Friday also provided an update on its current cable outage, saying the anticipated return-to-service date remains May 31, although it is "looking at every possible opportunity to expedite this".

The company had earlier this month delayed this return-to-service date from April 14 following third-party damage to the system.

"We have repaired a high-pressure system within a piece of equipment at the Victorian converter station. To return the interconnector to service, we require specialised expertise and equipment to be brought in to re-pressurise this equipment," Basslink explained.

"It is a highly technical exercise. The equipment was damaged by a third-party contractor during routine works. There is no damage to the cable itself."

According to Basslink, it has "worked around the clock" with its manufacturing partners over the last week to formulate a repair and re-pressurisation process, as well as finding experts and equipment and working on logistics for carrying out the procedure.

Basslink had last month announced that it would be undertaking repairs on a piece of equipment on the submarine cable, which it said was damaged by a third party "during the routine maintenance at a transition station in Victoria".

PREVIOUS BASSLINK COVERAGE

• Basslink subsea cable out until late May
• Tasmanian government seeking AU$122m from Basslink for cable outage
• Basslink 'strongly denies' it owes Tasmanian government compensation
• Tasmanian government wants compo over 2015-16 Basslink failure
• Basslink hits back at 'unproven' Hydro Tasmania report
• Basslink subsea cable outage caused by exceeding design limit: Experts
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