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North American civils giants Dragados USA and Tutor Perini face a US$74M (£61M) bill after the latest ruling in a long-running battle over delays on a major tunnelling project in Seattle.
An appeal court threw out a bid by the pair to overturn an earlier decision that ordered them to pay damages to client Washington State Department of Transportation (WSDOT) for the late completion of works on the Alaskan Way Viaduct replacement scheme.
Acting as Seattle Tunnel Partners (STP), the joint venture of Dragados USA and Tutor Perini in 2011 entered into a $1.4bn (£1.1bn) contract to construct a tunnel to replace the earthquake-damaged viaduct on Highway 99.
In December 2013, a 130m long tunnel boring machine (TBM) known as Bertha hit a pipe with a 200mm diameter steel well casing. Two months later, Bertha’s manufacturer told the joint venture to stop mining because the TBM required repair.
This repair took some time and the deadline for substantial completion of the project was missed.
In March 2016, the client body sued its contractor for missing the deadline. Seattle Tunnel Partners fought the claim, insisting the delay was excusable under its terms of contract.
The JV also counterclaimed for alleged breach of contract, saying it should have been given a time extension when its equipment was damaged on a pipe it claims the client should have disclosed but didn't.
An initial court ruling was made in favour of Washington’s transport department, and this has now been backed by the state’s court of appeal.
“We hold that either the trial court did not err, or if the court erred, the error was harmless,” concluded the latest 30-page judgement.
James Yand, partner at law firm Miller Nash, said the judgement meant “taxpayers are not responsible for over $300M for Highway 99 tunnel cost overruns sought by STP”.
“Instead, STP is liable for the $57.2M WSDOT award, now having grown to $74M with interest," he added.
"It is possible STP will seek discretionary review from the Washington Supreme Court.”
Washington State Department of Transportation , Dragados USA and Tutor Perini have all been contacted for comment.
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