$15m fee fight over desal plant as Victorian Government vows to fight operator's lawsuit The Wonthaggi desalination plant. THE desalination plant operator is pursuing the State Government in the Supreme Court to recover $15 million being held as a penalty for late completion. AquaSure claimed the sum was an "extravagant" fine, but Water Minister Peter Walsh said the case would be vigorously defended. The plant will cost Victorians $24 billion in higher water bills over 28 years. According to AquaSure's statement of claim, the $15 million - paid in September 2009 as part of the bidding agreement - "is disproportionate and extravagant in comparison to any loss suffered by the state." The money was to have been reimbursed over the life of the project, at 2 per cent a year in increased service fees. But construction ran overtime, not being completed until November, and in January the State Government told AquaSure that under the contract, the missed deadline entitled it to a $15 million fee reduction. According to the statement of claim, AquaSure was told a percentage of its monthly service fee would be deducted until the $15 million was reached. AquaSure says the penalty "does not represent a genuine estimate of damage that would be suffered by the state" and it wants the court to rule it unenforceable. It argues another clause in the contract, which says "the state must not make any claim" against AquaSure "due to a delay in achieving completion by the relevant date," protects it from the penalty. Court documents say the payment "does not relate to or flow from" the failure to meet the completion date. AquaSure said it would suffer loss and damage, and the state would be "unjustly enriched," should Victoria retain the $15 million. Mr Walsh said yesterday he could not comment on the details of the case, but "on behalf of Melbourne's water customers, we will . . . vigorously defend AquaSure's claims." The desalination plant has been plagued by problems since the project was announced in 2007. The French company that is the major shareholder in the project has already launched a $1 billion compensation claim over losses caused by "cyclonic" weather and industrial action. The State Government has not ordered any water from the desalination plant, which can produce 150 billion litres of water each year. Any water must be ordered by April each year. The trigger point is water storages falling below 65 per cent of capacity. Melbourne's storages were this week at 74.6 per cent of capacity.