Downer EDI, the company responsible for Sydney's Waratah train project, was aware of cost overruns on the project for a year before informing the market, a court has heard.
The SMH reports that the Victorian Supreme Court is hearing a class action on behalf of investors who bought Downer stock after January 12, 2010 and held it until the company wrote down the project.
The court was shown internal Downer documents demonstrating that the company was aware of a $117 million cost overrun in June 2009.
However, the company unexpectedly announced a $190 million write-down of the project one year later, in June 2010.
As the Australian notes, the court heard that Rob Mason, the head of Sydney train operator RailCorp had lost confidence in the progress of the project by November, 2009.
The $3.6 billion Waratah train project was beset by problems.
The cars of the trains were built in China by Changchun Railway Vehicles Co Ltd (CRC), while the driver's and guard's cabins were manufactured at Cardiff in Newcastle by Downer EDI.
Problems that led to the writedown included poor production rate, quality and safety issues, software integration problems and general cost escalation issues. They resulted in the first of the 78 trains being accepted for commissioning more than 15 months late.
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