The State has informed Basslink that it considers it is entitled to damages as a result of the 2015 Basslink outage.
I have written to Basslink Proprietary Limited (BPL) advising it that the State will consider that a dispute has arisen under the Basslink Operations Agreement (BOA) if BPL does not agree to compensate the State for its losses.
We have never accepted the original assertion that the cable outage in 2015 was the result of a “cause unknown”. The expert reports into the cable failure delivered in December 2017 indicate that BPL had operated the cable in a manner that allowed it to exceed its temperature design limits during a number of periods in its service life.
The State has undertaken a careful analysis of its legal position. The State takes the view that the actual capability of the Basslink facilities and the way in which the Basslink cable has been operated may constitute a breach of the State’s rights under the BOA.
The State proposes to initiate the dispute next week unless Basslink agrees to compensate it for its losses.
Given the nature of the dispute, the Government will not provide any further comment at this stage.
The dispute will be undertaken by the State’s legal advisers, under instruction from the Solicitor-General.
While the legal process will take time to play out, the Government considers that this is the most appropriate and prudent course of action to take in the interests of the State.
In addition to the cost incurred by the State due to the outage, the Basslink cable is an important part of Tasmania’s energy security and it is incumbent on the Government to ensure that BPL operates the cable reliably and in accordance with its contractual obligations.