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Downer EDI Delays RailCorp's Waratah Commuter Trains Yet Again

Downer EDI Delays RailCorp's Waratah Commuter Trains Yet Again

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Published by White Digital Media
Following a November announcement that the Waratah commuter trains would be ready this month, Downer pushes back delivery to Jan.
Following a November announcement that the Waratah commuter trains would be ready this month, Downer pushes back delivery to Jan.

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Published by: White Digital Media on Dec 10, 2010
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12/10/2010

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Downer EDI Delays RailCorp's Waratah Commuter Trains Yet Again

Following a November announcement that the Waratah commuter trains would be ready this month, Downer pushes back delivery to Jan.

Downer EDI is—yet again—delaying the delivery of the Waratah commuter trains to Sydney operator RailCorp, despite the promise that the first train would be ready this month. In November, Downer EDI Chief Executive Officer Grant Fenn said the trains would be ready for delivery by the end of this month, but the testing period has been extended until January 2011. While Fenn said the testing is going well, there have been changes to the testing schedule primarily related to the availability of track access. “Whilst discussions continue with RailCorp on track availability for December and the Christmas-New Year holiday period, it is now expected that a small number of tests will be completed in January and the first Waratah train will be presented to RailCorp for Practical Completion following the successful completion of those tests,” Downer EDI said Wednesday. There’s no doubt that the delay will cost Downer, with Fenn confirming that the liquidated damages payable by Downer due to the late delivery of the first Waratah train were included in the $190 million provision announced by the company on June 1, 2010. The delay of the first train into revenue service is not expected to materially impact the schedule for the 77 remaining train sets. The project to deliver 78 trains by 2013 has had financing issues, including the debt of the Reliance Rail consortium, contracted to build the trains under a $3.6 billion publicprivate partnership. Despite the bad news, shares in Downer closed down only 0.23 percent at $4.30 on the ASX Wednesday.

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