Sydney light rail contractor Acciona suing NSW Government; further delays to construction likely

The firm building Sydney's light rail is taking the NSW Government to court, claiming it is owed more than $1 billion extra, prompting Labor to call the project a "total embarrassment" for Premier Gladys Berejiklian.

Workers for subcontractor Acciona have been on a go-slow, with the project already running behind schedule by months.

The court action for $1.2 billion threatens to delay completion of Ms Berejiklian's pet project even more, to the frustration of many residents and businesses.

Transport Minister Andrew Constance has called the subcontractor's claims "ridiculous", saying he is an angry customer and they need to "get on with it".

"We are furious it's not being delivered at the pace it should be," he said.

"We will throw the book at them in terms of this contract. We are not going to muck around.

"The NSW taxpayer is not going to be fleeced by anyone."

But the Opposition said the 24-kilometre line from the CBD to the eastern suburbs could now become the world's most costly light rail project.

"It started at $1.6 billion, now it's up to $3 billion perhaps," Opposition Leader Luke Foley said.

"If the Government had done its homework there would be no dispute."

Deputy NSW Labor Leader and Opposition spokesman for planning and infrastructure Michael Daley said this was the worst project he has seen in his 20 years of public life.

"Every time the contractor digs a hole there is something underneath the ground that they weren't told about," he said.

"That's because Gladys rushed this project … it should have taken two years to plan.

Mr Daley said the contractors were not to blame, and "this has been a cock-up" by the Government.

'Cannot express Government's disappointment'

Spanish firm Acciona claims the State Government made misrepresentations about the utilities in the lead-up to the signing of the contracts.

In a letter of demand to the Government in February, Acciona proposed mediation and threatened legal action for loss and damage plus interest.

"Our client also maintains it is entitled to interest on the sum of $101 million, bringing the total sum sought by our client to $1,206 billion," the leader said.

In a letter to Acciona in March, Mr Constance told the firm there is no contract between them and Transport for NSW nor the state of NSW.

"Transport for NSW has contracted the ALTRAC Light Rail Partnership … ALTRAC has in turn engaged with Acciona … any issues should be raised with ALTRAC.

"The contract between ALTRAC and Acciona spell out how risks of dealing with utilities for the construction of the Light Rail are to be managed.