Removal of general contractor clears way for project completion
Portland General Electric (NYSE:POR) has declared the contractor
responsible for engineering, procurement and construction of the
company’s Carty Generating Station in default of their construction
agreement with PGE and removed them from the project. The contractor had
ceased construction activities on the project on Monday, December 14.
The utility assumed control of the construction site on Friday, December
18.
PGE is building a team comprised of engineering companies and
contractors to establish a new construction management team and update
work plans at Carty before putting crews back to work on the
440-megawatt, natural gas-fired power plant. Initial work has begun to
prepare the site for construction to resume.
“We’ve been monitoring progress at Carty carefully throughout the
project,” said Jim Piro, PGE’s president and CEO. “The plant is in an
advanced state of construction, with all major components on site and
installed or being installed. Our responsibility to our customers and
our investors requires us to step in now and assume control so
construction can get back underway.”
PGE announced selection of the Carty project in 2013 after a rigorous
competitive bidding process. Abeinsa Abener Teyma General Partnership,
an affiliate of Abengoa S.A., won the contract as a turn-key project and
began construction in January 2014. However, Abengoa S.A. recently
initiated a process to seek restructuring of its debt under the
bankruptcy law of Spain, where it is headquartered.
PGE has initiated discussions with Liberty Mutual Surety and Zurich
North America, the sureties who provided a performance bond of $145.6
million under the original construction agreement, and with contractors
to enter into agreements to complete work on construction of the project.
Carty is estimated to be about 75 percent complete, and was expected to
be online during the second quarter of 2016 at a cost of up to $514
million. Once construction has resumed and PGE has completed an
assessment of the current status of the project, the company will
provide an update on the expected costs and completion date for the
project.
PGE’s own team of onsite project managers and engineers will continue to
monitor progress at the site, focusing on continuity, quality, safety
and timely project completion.
About Portland General Electric Company: Portland General
Electric, headquartered in Portland, Ore., is a fully integrated
electric utility that serves approximately 852,000 residential,
commercial and industrial customers in Oregon. Visit our website at
PortlandGeneral.com.
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Copyright Business Wire 2015
Source: Business Wire
(December 21, 2015 - 7:00 AM EST)
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