Sydney's light rail is one year behind schedule, now set for 2020 finish

A fresh stoush has erupted over the Sydney Light Rail project, after the consortium delivering it advised the New South Wales Government it will be a year late.

Transport Minister Andrew Constance has confirmed that ALTRAC has now told the Government it is working towards a completion date of March 2020 for the $2 billion project — a whole year after the promised it will be delivered.

The project, which extends from Circular Quay to Randwick, has been a visible scar on the CBD.

Mr Constance said the delays were completely unacceptable.

"We must see them deliver in 2019, we must see them deliver to contract," he said.

What was supposed to be a marquee transport project for the Berejiklian Government has become a major headache.

Mr Constance has accused Spanish sub-contractor Acciona of using go-slow tactics as it engages in a court battle over the project.

Acciona is demanding financial compensation and claiming it was "induced" by Transport for NSW to enter a contract to build the CBD light rail on a "false premise".

"We will ensure as best as possible that they ramp up their activity — they are on a 'go slow', anyone walking the city can quite clearly see," Mr Constance said.

"They have construction zones where there is no workforce on the ground doing the work."

In documents tendered in the NSW Supreme Court last week, the contractor claimed a "critical part and key delivery risk" of the project was how they would deal with underground electricity infrastructure, including those owned by Ausgrid and other water and gas companies.

The company has alleged it was made to believe electricity provider Ausgrid had reviewed and accepted the treatments of its utilities, but it had not.

People don't just sabotage projects for no reason: Daley

NSW Labor deputy leader Michael Daley said it is understandable that the contractor is dragging the project out.

"If you examine why the contractor is holding things up, it's because they are sick of being treated like rubbish from day one with the contract that lied to them, with plans that said we don't know what's underground, do your best," he said.

Mr Daley said the Government needs to repair the relationship with Acciona as people in business "don't just stand back and sabotage projects because they feel like it".

"The planning wasn't done properly."