Andritz sues Nalcor Energy subsidiary over 824-MW Muskrat Falls hydropower plant

Andritz Hydro Canada Inc. has sued Muskrat Falls Corporation, saying it is being forced to complete its work at the 824-MW Muskrat Falls hydropower plant on a compressed timeline, multiple news agencies have reported.

Andritz is alleging a breach of contract, but Muskrat Falls Corp. parent company Nalcor Energy says: “It is not uncommon in the course of business in large construction contract execution for disputes to arise between parties,” according to Gilbert Bennett, vice president of the Lower Churchill Project. “In such cases, parties may use legal procedure as one of the many courses of action available under the contract to address their concerns. Andritz Hydro Canada Inc. (Andritz) has submitted a Statement of Claim in response to a disagreement between Andritz and Muskrat Falls Corporation regarding a performance issue as it relates to their work on the Lower Churchill Project. Muskrat Falls Corporation stands by the concerns it has raised and denies the allegations in the Statement of Claim and will respond to Andritz’s claim through the legal process. Muskrat Falls Corporation and Andritz are currently working to resolve these issues and we anticipate they will be addressed to our mutual satisfaction in the near future.”

In its court filing, Andritz alleges that delays by contractor Astaldi contributed to project milestones being pushed back, news sources report.

Andritz received a $205 million contract in late 2013 to supply and install equipment for the Muskrat Falls powerhouse and spillway, CBC reports. Andritz said it needed Astaldi to complete concrete foundations and other work before it could begin its work of installing roller gates, stoplogs and a tower for the mechanical drives for five spillway bays, as well as 12 trashracks, intake gates, mechanical drives and stoplogs for the powerhouse. However, the civil works completion was delayed. Andritz said it gained access to the site in November 2015 and determined the civil works were incomplete.

Andritz says the contract allowed a year to work on the gates but Muskrat Falls Corp. has shortened that time frame by four or five months and shifted it to the winter period. Andritz is to receive an additional $3.4 million to cover the cost of this accelerated schedule and informed Muskrat Falls Corp. that “it would try its best to meet the new timeline,” CBC reports.

Andritz also says Muskrat Falls Corp. is threatening actions that could “cause irreparable harm” to Andritz. Andritz alleges Muskrat Falls Corp. issued a notice of default and threatened to call in a $20.5 million letter of credit Andritz provided when it accepted the work. As a result, Andritz is asking a judge to declare the new schedule and price of the work invalid and stop any action regarding the $20.5 million letter of credit, CBC says.

The case will be heard at the Newfoundland and Labrador Supreme Court in June.

Muskrat Falls, on the Churchill River in Labrador, Canada, is one component of the Lower Churchill complex, which could also eventually include the 2,250-MW Gull Island plant.

Ed Martin, president and chief executive officer of Nalcor Energy, resigned in April.

Inquiries to Andritz were not immediately answered, but we will be following this story and will bring you updates as they are available.

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