June 28, 2016 10:10 pm by Voltaire Palaña
BACMAN Geothermal Inc. (BGI), a
wholly owned subsidiary of the Lopez-led Energy Development Corp. (EDC), said
Tuesday that it has settled its disputes with foreign contractor Weir
Engineering Services Ltd. (Weir).
In a disclosure to the Philippine
Stock Exchange (PSE), BGI has agreed to return $1.89 million to Weir; and both
parties have agreed to jointly take steps to cause the discontinuance of the
arbitration.
In 2012, Weir was engaged by BGI to
carry out rehabilitation works on the steam turbine and generator installations
in three existing power-generating units at BGI’s Bacon-Manito geothermal power
plant (BacMan Plant), Units 1 and 2 at the BacMan I Plant in Palayang Bayan,
Manito, Albay, and Unit 3 at the BacMan II Plant in Cawayan, Sorsogon.
BacMan consists of BacMan I with two
55-megawatt turbines and BacMan II with 20-MW geothermal facilities.
EDC’s April 20, 2015 disclosure
explained that BGI initiated arbitration with the International Court of
Arbitration of the International Chamber of Commerce (ICC) in order to enforce
its rights under its Contract for Works—Completion of Works to Steam Turbine
and Generator of Units 1, 2 and 3 dated March 29, 2012 with Weir, following a
favorable determination by the engineer appointed pursuant to the contract that
the disputed sums are owed by Weir to BGI.
Arbitration is an alternative scheme
of settling disputes between parties that can be done outside the confines of
the courts.
EDC’s February 2, 2016 disclosure
explained that BGI has received the ICC tribunal’s Phase 1 Award dated February
1, 2016, in which, among other things, the ICC tribunal ordered Weir to pay a
total of $5.2 million to BGI.
Currently, all units at the BacMan
plant are operational and the facility is producing a gross output of
approximately 140MW.
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