Nal­cor, Astaldi reach new agree­ment over Muskrat Falls

The Labradorian - - FRONT PAGE -

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.”

FILE PHOTO

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.

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