Basslink enters voluntary administration

The owner of the undersea power cable across Bass Strait has entered voluntary administration amid a legal dispute with Tasmania over an outage six years ago.

The Tasmanian government in October indicated it was taking legal action against owners Basslink over $70 million owed because of the months-long outage that began in late 2015.

Basslink on Friday announced companies in the Basslink group had entered voluntary administration.

Chief executive Malcolm Eccles said the decision was made because of an ongoing dispute with state-government-owned Hydro Tasmania and an unsuccessful sale process with APA Group.

"Basslink has operated in a highly challenging environment for some time," Mr Eccles said in a statement.

"Regrettably, against the backdrop of many issues and having exhausted options, Basslink needed to take proactive action to put Basslink in the best possible position to navigate forward through these challenges.

"The Basslink interconnector continues to operate efficiently and reliably, connecting Tasmania to the national electricity market."

Administrators will undertake a preliminary review and assessment of the Basslink's operations.

Tasmanian Energy Minister Guy Barnett last month said Basslink had yet to pay more than $70 million to the state government and Hydro Tasmania as required by an arbitrator.

He said the state government would not extend a standstill agreement with the company, entered into following arbitration.

Mr Barnett said Basslink had not adequately progressed commercial and engineering requirements and had also failed to secure refinancing.

At the time of the summer outage, Tasmania had received record low rainfall, putting a strain on hydroelectricity generation and forcing the government to import temporary generators.

The arbitrator last year ordered Basslink to pay more than $40 million to the Tasmanian government and Hydro Tasmania. The state government indicated it was owed a higher figure.

Mr Eccles said the decision to appoint administrators was made with the long-term interests of Basslink, its creditors and employees in mind.

Austrlaian Associated PressBack to Breaking News

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