Burrup plant still on track
■ The operator of the Burrup Peninsula explosive materials plant says it is still on track to begin production this year, despite contractor Downer EDI quitting the $800 million project.
Downer’s 195 workers are demobilising from the technical ammonia nitrate facility in the Pilbara because of a $60 million payment dispute with Spanish head contractor Tecnicas Reunidas.
The contractor’s work on the project installing pre-fabricated modules is understood to be near completion.
Downer said it would work with TR to ensure a safe and orderly handover of the work. It said a “significant” number of the employees would be redeployed to other projects.
Plant operator and 45 per cent owner Yara Pilbara said the Spanish contractor’s advice was that first production remained scheduled for the end of the year, with product expected to get to market next year.
Plant commissioning was continuing.
TR is delivering the project under a lump-sum turnkey contract valued at $US600 million when awarded.
The plant had been scheduled to begin operating this month, but commissioning was delayed.
Downer is understood to be alleging that TR supplied poor quality modules which arrived out of sequence and did not fit together properly.
It is claiming breach of contract by TR and seeking a $60 million payment on top of $89 million the Spanish company has paid under a separate settlement. The original contract was for $72 million.
TR officials could not be reached for comment.
Yara Pilbara said the dispute was a commercial matter between the two parties.