WA taxpayers face a $1 billion damages bill after a consortium led by billionaire Len Buckeridge walked away from an agreement to build a private port south of Fremantle.
A Supreme Court writ lodged by the James Point Port consortium says it is entitled to drop the venture because of State Government delays.
It will seek damages for wasted costs and a loss of income as if it had commenced operations in 2006. Losses are estimated by the JPP partners at up to $1 billion.
The legal move exposes taxpayers to a huge financial headache with nothing to show for more than 10 years of negotiations and no near-term alternative to Fremantle Port, which is running out of space.
"The State's obligation was . . . not to prevent, hinder or delay the reasonable, timely and proper determination of any statutory approvals process required to enable (JPP) to lawfully commence operation of the first stage of the port," the writ says.
A framework agreement to build the bulk commodity and live animal export berth and associated second-stage offshore container port in Cockburn Sound was signed in the dying days of the Court government in 2000.
But finalisation of the deal was delayed amid ideological battles with the Gallop and Carpenter governments.
Mr Buckeridge, a major Liberal donor, then argued with Premier Colin Barnett, with the Government refusing to sell him the land needed to build the port as envisaged in the initial 2000 agreement. Mr Barnett was also opposed to the consortium building an offshore container facility.
The Government said it was prepared to consider a lease of land needed for the first stage of the port - the bulk commodity berth with live sheep export facilities.
But JPP said the lease and associated conditions meant the project was not financially viable as a stand-alone venture.
The writ also details a secret meeting between Mr Barnett and Mr Buckeridge at the billionaire's house in April 2009, which initially seemed to resolve the matter by focusing the development on the land-based bulk terminal.
But Mr Buckeridge's business partners refused to drop the right to build the container port. The Government declined to comment.
Lawyer for JPP, Michael Hotchkin, said the consortium had become increasingly frustrated.
"I haven't lost hope that the matter can be resolved," he said.