The Public Transport Authority (PTA) has announced it will no longer proceed with the HUGL Consortium for its radio replacement project following trade restrictions imposed by the United States Government.
Minister for Transport, Rita Saffioti said the US restrictions placed on Huawei Australia had created a force majeure event under the contract, which the parties had been unable to overcome.
A force majeure event is an unexpected extraordinary event whose power is such that a proposed contract could not succeed.
“The Radio Systems Replacement project, which involves converting the radio communications system for Perth’s urban rail network from analogue to digital, will be delivered through a new arrangement,” Ms Saffioti said.
She said the PTA had begun the procurement process for the Radio Systems Replacement project in May 2017 and awarded the contract to the HUGL Consortium (Huawei Australia and UGL) in July 2018.
“The HUGL Consortium had provided earlier assurances to the State Government that it could deliver the project in light of trade restrictions imposed by the US, but further restrictions imposed in August 2019 had greater impact,” Ms Saffioti said.
“The State Government decided that if the current relationship with the HUGL Consortium was maintained, the measures required to try to overcome the force majeure event would result in unacceptable uncertainty around the total cost of the project, final completion time and no guarantee that the proposed solution would be effective.”
She said the PTA was now working with the HUGL Consortium towards the orderly transition to new arrangements to allow delivery of the project without breaching US trade restrictions.
“This could include a range of outcomes, from withdrawal of Huawei Australia from the contract to termination,” Ms Saffioti said.
She said the original requirement for the PTA to vacate the analogue radio spectrum by May 2020 had now been extended to beyond 2021.
