Nalcor, Astaldi reach new agreement over Muskrat Falls
Nalcor announced it has reached a new contract with Astaldi, one of the biggest contractors in the Muskrat Falls project.
Nalcor CEO Stan Marshall told reporters that the draft agreement for the new contract to complete the powerhouse and intake civil works was finalized Friday night. Dec. 16.
This agreement increases the price tag for the project by about $270 million. Nalcor has yet to re-baseline the costs, so that number could change. This increases Astaldi’s contract to just over $1.8 billion, up significantly from the original contract they signed of $1.26 billion.
Cost overruns and delayed timelines have contributed to the ever- increasing bottom line for the hydroelectric development, with Astaldi being blamed by many for both. The overall cost of the project is rapidly approaching $12 billion.
“This agreement allows for completion of the powerhouse and intake structure at a cost which is substantially less than any of the Plan B alternatives being costed, without any delay for changing contractors and with less risk because Astaldi has been there, is operating and is familiar with the site,” Marshall said.
Pushed back timelines and a leaky cofferdam led to the powerhouse site being endan- gered by ice. Damage to the structure could cause costs to rise again and Marshall said they are working to protect it as best they can. He said they are in the process of grouting that leaky cofferdam and will be adding additional dams to protect the powerhouse.
“We’ve done pretty well all we can in terms of trying to put other protective measures in place,” he said in a conference call.
The new contract also ties additional payments to milestones on performance and resolves all disputes and claims between the companies up to end of November.
Astaldi had demanded more money to complete the contract this summer and a temporary agreement was reached to continue work until this contract was completed. It also aligns Nalcor’s current completion date with the work being done by Astaldi.
“The constructive dialogue built and developed with the client over the past years has allowed us to reach a full understanding over our contract’s objectives and timing,” said Filippo Stinellis, Chief Executive Officer of the Astaldi Group, in a press release.
“The challenging work and its environment have made the negotiation process complex and we are satisfied for having reached this agreement.”
Nalcor has reached a new contract with Astaldi, one of the biggest contractors in the Muskrat Falls project. This agreement increases the price tag for the project by about $270 million.