Downer exit from ammonia plant construction

Downer has pulled out of the Burrup Peninsula ammonium plant construction project over a pay dispute.

The contractor is reportedly seeking $60 million in damages over what it claims are breaches of the contract by plant owner Tecnincas Reunidas (TR).

Downer initially won the contract, worth $72 million, in March last year to provide the structural, mechanical, piping, and electrical and instrumentation installation at the site.

Prior to Downer winning the contract, the work was carried out by the now collapsed Forge Group.

Now Downer has walked away from the operation, claiming TR failed “to remedy a sustainable breach of the contract”.

While Downer did not state the nature of the breach, it added, “Downer has not taken this decision lightly but considers it has no alternative given TR’s conduct.”

Downer is currently demobilising from the site and handing over work as required by the contract.

To date the contractor has been paid $89 million by TR, which falls under the initial contract and includes separate settlement agreements.

However Downer also intends to seek $60 million, which includes costs for the growth in the contract quantities and re-work as required as a result of non-conforming free issue modules as well as costs incurred as a result of delays and disruption.

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