Link delay after Abigroup cost ‘discrepancies’


THE completion date for Peninsula Link is under a cloud after Lend Lease, the parent company of freeway builder Abigroup, announced it was “conducting an immediate and thorough investigation” into cost discrepancies.

Last week, four senior managers were suspended over alleged under-reporting of potential losses of the freeway project, which has been plagued by wet weather since construction started in 2010.

Lend Lease suspended Peter Brecht, managing director of Lend Lease’s Australian construction arm; Darrell Hendry, chief financial officer of Lend Lease’s infrastructure section; Abigroup managing director David Jurd; and Abigroup chief financial officer David Walker.

Lend Lease, which acquired Abi­group when it bought the Australian business of German construction company Bilfinger Berger in early 2011, announced it had discovered discrepancies involve the potential under-reporting of the anticipated profit on one project and the potential under-reporting of the anticipated loss on another project.

Reports claimed the under-reporting of profit was for the upgrade of the Ipswich Motorway in Queensland and the under-reporting of loss was for Peninsula Link.

Construction of Peninsula Link started in February 2010.

It is a public private partnership between the Victorian government’s Linking Melbourne Authority and Southern Way, a consor­tium of Abigroup, Lend Lease and Royal Bank of Scotland.

Lend Lease will send a field team to scrutinise all parts of the 27km project, which will connect EastLink tollway at Seaford and the Mornington Peninsula Freeway at Mt Martha.

This is expected to take a month.

On Tuesday last week, a spokeswoman for state Roads Minister Terry Mulder reportedly said any extra costs would not be passed on to the government and the freeway remained on track to be open in early 2013.

But the freeway builder has been saying for some months the road would be completed in December.

Extra costs are believed to have been caused by wet weather and Abigroup using subcontractors to make up time.


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