Energy and infrastructure contractor Valmec is suing construction giant John Holland for about $12 million in a dispute over a road project.
Valmec said the Supreme Court action begun yesterday relates to a subcontract completed this year on the NorthLink WA project.
“These proceedings follow a breakdown in protracted commercial discussions since Valmec’s successful completion of the project earlier this year,” a company statement said.
“Valmec’s claim was prepared and reviewed by its external construction lawyers and by its independent project engineering experts, to ensure there was a proper basis for the claim to be made against John Holland.”
The contractor had worked for John Holland on the southern section of the link from Guildford Road to Reid Highway.
Chinese-owned John Holland is the head contractor on the project for Main Roads WA.
The value of Valmec’s claim is $11.6 million plus interest and costs.
The company said it had made provisions in its fiscal 2018 results in relation to the project, without disclosing the amount.
However, it forecast earnings before interest, tax, depreciation and amortisation of more than $7.5 million, after recording the provisions.
Revenue of $103 million was up 41 per cent from a year earlier.
Valmec’s shares closed up 2¢, or 6.5 per cent, to 33¢.