Basslink has refuted claims by the Tasmanian government that it breached the Basslink Operations Agreement (BOA) contract it has with the state as the operator of a telecommunications and energy subsea cable, also denying that it is liable to the more than AU$100 million in losses the state is claiming.
Basslink will "vigorously defend any legal action", it said on Thursday night.
"Basslink strongly denies the allegations set out in the state's letter," the company said, saying this includes breaching warranties on the design and construction of the submarine cable.
"As part of the commissioning of the Basslink Interconnector in 2006, the Basslink Interconnector was rigorously tested to ensure the design and construction requirements were satisfied.
"Given that the Basslink Interconnector was completed and commissioned more than a decade ago, Basslink is extremely surprised at these very belated allegations by the state and strenuously denies that any warranties under the BOA were breached."
According to Basslink, an independent inspector had signed off the design, construction, and commissioning requirements.
"The state, through Hydro Tasmania, was very closely involved in the design, construction, and commissioning process. This involvement included attending various meetings with both Basslink and the manufacturers," the company argued.
"Basslink maintains the cable failure was a force majeure event."
The Tasmanian government had on Thursday threatened to take legal action against Basslink.
"The state proposes to initiate the dispute next week unless Basslink agrees to compensate it for its losses," Energy Minister Guy Barnett said.
This followed the reports from two global experts provided to Hydro Tasmania in December, which found the Basslink subsea cable outage of 2015-16 was caused by Basslink (BPL) exceeding its design limit