This article is part of a daily series of MegaProjects articles. If you want to know more about PPP projects with a considerable size visit our MegaProjects section. You can receive them by email on a daily basis.

VAC Group is suing the government of New South Wales, a state in the south-east of Australia, at least AUD4 million (US$3.0 million), plus damages, over the Sydney Light Rail project. This is the second lawsuit filed in relation to the project, with sponsor Acciona launching a AUD1.2 billion (US$905.5 million) suit earlier this year.

The project involves the design, construction, financing, operation and maintenance of a new light rail system for the Central Business District and south-east region of Sydney, the state capital. It was awarded to Acciona, in consortium with Alstom Transport Australia, Capella Capital and Transdev in October 2014. The total project investment was then estimated to be AUD2.1 billion (then US$1.7 billion).

VAC Group was contracted to do trenching work in the CBD as part of the early preparation works for the project. The company claims that the government did not disclose the full scope of works required, namely in relation to underground tram tracks, and that it was not granted enough hours of access to sites to get the work done.

Acciona's lawsuit is similar in that it hinges on the government not disclosing information. It alleges that the transport ministry did not sufficiently settle a critical part and key delivery risk of the project - underground electricity infrastructure. Much of the infrastructure affected by the construction of the project is owned by AusGrid, who Acciona claims it was prevented from communicating with before the contract was finalised.

Acciona was led to believe that AusGrid had reviewed and agreed to the treatment of its infrastructure as determined in Acciona's contract with Transport for NSW (TfNSW). However, following the finalising of the contract, Acciona claims that it received from Ausgrid guidelines for the treatment which were differed considerably from what it had agreed with TfNSW.

These lawsuits will slow the progress and increase the cost of an already late and over-budget project. The NSW Opposition claims that the project's total investment now exceeds AUD3 billion (US$2.26 billion). At commercial and financial close, which occurred in December 2014, the opening of the light rail line was projected for 2019. This is now almost impossible to achieve.