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Sub-sea cable failure dispute involving Keppel Infrastructure Trust unit goes into arbitration
THE dispute between Keppel Infrastructure Trust's Basslink unit and an Australian state government enterprise has gone into arbitration, the company and the trust manager said in separate statements on Monday. (see amendment note)
Basslink is still embroiled in a dispute with Hydro Tasmania, which is owned by Tasmania, over the 2015 outage of the Basslink Interconnector that links the state's electricity grid to the Australian mainland.
The manager had previously warned that, if financiers do not consent to the issuance of the notice of dispute, this may lead to a default under the project financing.
A Basslink-related entity is still working with its lenders to get that consent, the manager said on Monday. It reiterated that the borrower is current on the debt, and all outstanding payments under the project financing have been fulfilled.
Basslink, which derives most of its cash flow from the 25-year term services agreement with Hydro Tasmania, maintains that the sub-sea cable failure that led to the outage was a force majeure event - that is, stemming from circumstances beyond its control.
It has sought to recover facility fees and other monies, which are being withheld by Hydro Tasmania on the grounds that the incident was not a force majeure event.
The state of Tasmania separately sent out its own notice of dispute in March, claiming that Basslink must indemnify it for more than A$100 million (S$101 million) in losses related to the cable failure.
Basslink said on Monday that it had followed the dispute resolution procedures under the Basslink services agreement "in good faith to try and resolve the dispute".
Meanwhile, the manager's board said that its update is not expected to have any material financial impact on the net tangible assets and distribution per unit of the trust for the year to Dec 31.
Keppel Infrastructure Trust closed unchanged at S$0.495, before the announcement.
Amendment note: An earlier version of this article stated that a dispute between Basslink and the Australian state of Tasmania is going to arbitration. The dispute in fact involves a business owned by the state of Tasmania. The article above has been revised to reflect this.