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The saga of troubles over the Melbourne Star Observation Wheel continues, with the tourist attraction’s owners suing a local construction firm for $6 million.
Japanese firm Sanoyas Rides Corporation alleges that Alfasi Steel Constructions has failed to hand over insurance money over a 2011 mishap while the $100 million, 21-cabin ride was being reconstructed.
In January 2009, cracks were found in the structure of the giant wheel, at Harbour Town shopping centre in Docklands, just 40 days after it opened. It was re-opened to great fanfare last December, having been rebuilt over five years.
In 2010 Sanoyas engaged Alfasi for $46 million to dismantle and reconstruct the wheel, then called the Southern Star Observation Wheel, an amount amended in 2011 to $57 million.
A writ lodged in the Supreme Court of Victoria alleges that during the reconstruction, at about 11.15pm on November 28, 2011, Alfasi was preparing the wheel for installation of a section of the large rim.
“But during the erection process, two of the temporary works attachment assemblies detached from the lower end of the temporary truss T3, falling to the ground”.
The assemblies struck a completed spoke, “causing damage to the permanent structure of the Wheel, causing the Wheel to rotate in an uncontrolled way”, the document says.
The writ states that the reconstruction contract required that Alfasi maintain insurance for the full replacement value of the contractual works, for the benefit of Sanoyas.
Sanoyas claims that in January this year, Alfasi was paid about $6.7 million by the insurer under its contract works insurance policy on account of consultancy costs, advance payments and other claims by Alfasi arising from the insurance payment.
Sanoyas, in turn, says it has paid Alfasi $6.089 million in consultancy costs and advance payments, and that Alfasi is liable to to remit the sum owing.
Sanoyas claims that “in breach of the terms of the reconstruction contract, the consultancy costs agreement and the advance payments agreement, and in breach of trust, Alfasi has refused or failed to remit any of the insurance payment to Sanoyas”.
The case has been set for a directions hearing on September 12.
Alfasi Steel Constructions did not respond to a request for comment.
