The NSW Government is being sued by the sub-contractor for its Sydney light rail project.

Spanish sub-contractor Acciona Infrastructure Australia has filed proceedings against Transport for NSW (TfNSW) for “misleading and deceptive” conduct in a $1.1 billion lawsuit.

Acciona claims it was “induced” by TfNSW to build the CBD light rail on a “false premise”.

The contractor says a “critical part and key delivery risk” of the project related to underground electricity infrastructure owned by Ausgrid and water and gas companies.

Acciona says it was told that electricity provider Ausgrid had reviewed and accepted impacts on its utilities, but it had not.

“Acciona … were prevented from communicating with Ausgrid in relation to how changes to utilities owned by Ausgrid were to be dealt with as part of the project,” documents filed in court state.

“Acciona were reliant upon TfNSW to ensure that utility services treatment in relation to Ausgrid was appropriately dealt with.”

The documents allege that on February 27, 2015, agreements were finalised with the NSW Government, but that Ausgrid sent out a draft document after business hours saying it required more costly work on 106 of its utility pits.

If Acciona had known this, it says it would not have signed on for the project.

“Acciona would not have executed the D&C [design and construct] contract because to do so in those circumstances was to expose Acciona to significant risk,” the documents state.

Transport Minister Andrew Constance says the state has become an angry customer of Acciona.

“We will throw the book at them in terms of this contract. We are not going to muck around,” he said.

NSW Opposition Leader Luke Foley said; “The cost has blown out, we're now facing years of uncertainty, the centre of the city looks like a war zone and there's just no end in sight”.

“What we were told would be built by April 2018 will now not be built until the 2020s, if ever,” he said.