Sedgman continues debate with Heron over Woodlawn costs

Underground mining at Woodlawn commences. Image: Heron Resources.

Sedgman is persisting in its claim for additional costs for work at Heron Resources’ Woodlawn zinc-copper project in New South Wales despite rejection from the contract superintendent.

CIMIC Group subsidiary Sedgman initially sought additional costs and forecast costs of just under $22 million and $28 million respectively (for $49.9 million) after close of business on February 1 for an engineering, procurement and construction (EPC) contract.

The contract superintendent, however, rejected the majority of these with the exception of $223,057 in works.

Heron argued that this $49.9 million claim placed the 18-month contract above its guaranteed maximum price (GMP) of $109 million.

Despite this, Sedgman has sent a claim for additional costs after close of business March 1 totalling $53 million, including the previously announced $49.9 million.

This also included a forecast of $25 million for completion, a figure Heron debated as “an extraordinary sum” since Sedgman had reported 98 per cent completion on the project by the end of January 2019.

Heron Resources claimed in a statement today that the contract superintendent had certified that Sedgman owed liquidated damages as a result of the delay to the delivery schedule.

Managing director and chief executive officer Wayne Taylor said Sedgman had failed to deliver the project on time and on budget and that the company had been a “source of real frustration”.

“We are surprised and disappointed that Sedgman continue to pursue this claim contrary to the nature and legal terms of the GMP contract,” said Taylor.

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