EDC seeks arbitration against UK contractor

by Alena Mae. S. Flores, 21 April 2015
from BusinessMirror

Bacman Geothermal Inc., a wholly-owned unit of power producer Energy Development Corp., has filed a request for arbitration of its dispute against contractor Weir Engineering Services Ltd. of the United Kingdom before the International Court of Arbitration.

Bacman Geothermal, the owner and operator of the Bacon-Manito geothermal power plants in Bicol region, hired Weir Engineering to repair the steam turbine of the power plants in 2012.

Weir earlier filed a case with the Construction Industry Arbitration Commission in relation to unpaid balance of the contract price.

EDC said in a disclosure to the stock exchange its own request sought the payment in Bacman Geothermal’s favor of $8.8 million, excluding interest, on account of Weir’s breaches of the contract for works.

These works included completion of works on steam turbine and generator of units 1, 2 and 3 as stipulated in the contract dated March 29, 2012.

Bacman Geothermal engaged Weir to carry out rehabilitation works on steam turbine, generator and rotor installations in three existing power-generating units at its Bacon-Manito geothermal power plants.

“BGI initiated the arbitration in order to enforce its rights under the contract, following a favorable determination by the engineer that sums are owed by Weir to BGI,” EDC.

BGI appointed Parsons Brinckerhoff Philippines Inc. as the engineer pursuant to the contract.

The Bacman geothermal plants are composed of three units, including 55-megawatt unit 1, 60-MW unit 2 and 20-MW unit 3.

The plants all use steam supplied by EDC, the country’s largest geothermal producer.

EDC earlier settled its claims against Siemens Inc. of Germany for the technical problems encountered by the plants.

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