Bur­rup plant still on track

Pilbara News - - News - Peter Wil­liams

■ 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.

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