Tasmania demands compensation for Basslink cable outage

Tasmania’s newly re-elected Liberal government has demanded Basslink pay $100 million in compensation for its high-profile subsea cable failure in late 2015.

Energy minister Guy Barnet on Thursday said the government believed it was “entitled to damages” from the six-month outage to the subsea electricity and data cable, which connects Tasmania to mainland Australia.

“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,” he said in a statement.

A Basslink-commissioned investigation into the fault undertaken by subsea cable experts Cable Consulting International (CCI) had came back with a finding of “cause unknown”.

But a second investigation - by Tasmanian electricity generator Hydro Tasmania - later found the Basslink had operated the cable in a way that exceeded its design limit.

Yesterday Barnet said the government had “never accepted the original assertion that the cable outage in 2015 was the restful of a ‘cause unknown’”, and would seek to recoup costs incurred by the state as a result of the outage.

“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," he said.

He said the government’s solicitor-general would “initiate the dispute next week unless Basslink agrees to compensate it for its losses”.

“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.”

Basslink denies liability

Basslink maintains the cable failure was a "force majeure" event and as such it did not need to provide the state with compensation.

"Basslink denies that it is liable for any such losses. Should the state take these allegations further, Basslink will vigorously defend any legal action," it said in a statement on Thursday.

The company claimed the Hydro Tasmania investigation had not included any testing of the cable and was "solely based on theoretical modelling".

Basslink also said it had not been provided access to the modelling "despite repeated requests".

"Without that information, it is difficult for Basslink to respond to these reports," it said.

"Basslink considers the analysis in those [Hydro Tasmania] reports flawed as the reports used theoretical models based on certain assumptions and not on actual facts. 

"Basslink stands by the independent investigation that was undertaken by CCI, who concluded the actual root cause of the cable failure in December 2015 as “cause unknown”."