37 Contingent liabilities and contingent assets
Contingent Liabilities
In addition to the liabilities included in the financial statements, there are the following contingent liabilities:
Litigation in progress
Quantifiable Contingencies
The PTA is awaiting judgement from the Supreme Court on the amount of Leighton Contractors Ltd legal costs payable by PTA in respect of the Supreme Court action that dealt with the calculation of entitlement to rise and fall payments under the contract. Leighton Contractors Ltd has claimed costs of $5.6 million.
PTA has issued indemnities to parties to cross border lease transactions for the financial obligations and performance of the lessees and deposit takers. In the event of default by the lessees or deposit takers to pay for obligations when due or perform functions required of them. PTA as issuer of the indemnity is required to meet the liabilities, losses, costs and charges of the indemnity to other parties to the contracts. In the event of default the maximum obligation at 30 June 2009 is $46.1 million. There have been no notifications of default.
Unquantifiable Contingencies
PTA has issued indemnities to cross border lease parties in respect to taxation resulting from changes in law, taxation administration determinations or as a result of loss of railcars which result in a loss of economic benefits to parties to the leases or result in increased costs. There are no notifications of adverse taxation circumstances. There were no railcar losses. It is not possible to estimate the amount of any payments that may arise from these indemnities at balance sheet date.
Contaminated Sites
Under the Contaminated Sites Act 2003, the PTA is required to report known and suspected contaminated sites to the Department of Environment and Conservation (DEC). In accordance with the Act, DEC classifies these sites on the basis of the risk to human health, the environment and environmental values. Where sites are classified as contaminated - remediation required or possibly contaminated - investigation required, the PTA may have a liability in respect of investigation or remediation expenses.
During the year, the PTA reported 2 known or suspected contaminated sites to DEC (a total of 55 sites). Four sites previously reported have been classified contaminated - remediation required, four sites as possibly contaminated - investigation required, and one site as remediated for restricted use. A provision has been recognised to cover the cost of investigation and remediation of the 21 sites. The PTA is unable to assess the outcome of the classification process for the remaining 34 sites, and accordingly, it is not practicable to estimate the potential financial effect or to identify the uncertainties relating to the amount or timing of any outflows. Whilst there is no possibility of reimbursement of any future expenses that may be incurred in the remediation of these sites, the PTA may apply for funding from the Contaminated Sites Management Account to undertake further investigative work or to meet remediation costs that may be required.