Leighton Holdings Ltd. expects to incur a significant financial loss on its Airport Link Project in Brisbane. The construction company originally expected to report a profit of $407 million for the project, but has revised the outlook to a pre-tax loss of $430 million.
Leighton now says it is pursuing compensation where possible to recover additional costs on the project.

In June 2008, Brisconnections, a consortium composed of Macquarie Group, Leihton unit Thiess and John Holland was awarded the contract for construction of The Airport Link, a tunnelled motorway grade road the northern suburbs of Brisbane, Queensland, Australia.

In a presentation delivered to analysts on Friday, Leighton chief financial officer Peter Gregg said the cost of the project had increased due to project delays arising from authority approvals and access issues, some areas "more difficult and variable" than anticipated, the Brisbane flooding and other wet weather conditions hampering progress, and the completion of the design taking twice longer than expected.

Leighton says the consortium expects the project to be finished on schedule by the end of June next year, despite remaining risks like further access and approval delays and its ability to continue to retain key staff. Leighton expects the project to be 94% complete by December this year.

Leighton said in its report to analysts that it will pursue cost recovery efforts. As such, it intends to "identify and pursue entitlements for compensation where we have incurred additional cost and time overruns."

The Airport Link will connect the Brisbane central business district and the Clem Jones Tunnel to the East-West Arterial Road, which leads to the Brisbane Airport. The Airport Link and busway project involves 15 km of tunnelling including the road (5.7 km of twin tunnels), busway tunnels and connecting ramps, as well as 25 bridges and result in over 7 km of new road.