Primero in legal dispute with Wartsila

Engineering company Primero Group and power plant consultant Wärtsilä Australia are continuing their legal dispute over the payment for work completed by Primero in South Australia, with the matter to be heard in the Supreme Court. 

Primero was contracted by Wärtsilä for the work at Barker Inlet Power Station in April 2018 and completed the work in late 2019.

In a statement to the ASX in February, Primero said there were significant extensions of the scope and value of works under the contract, which were re-measured and verified by Wärtsilä prior to the payment being made.

“The process of assessing and substantiating the increased physical quantities and associated costs has extended over a significantly longer period than expected and remains ongoing due to the significant changes that have been requested,” the statement said.

“As such, contractual close-out and finalisation of re-measurable claims are still pending.”

Primero recently escalated the dispute by making a claim through the South Australian Security of Payment Act’s dispute resolution process, which resulted in Primero being awarded $16.9 million.

Primero said this was approximately 25 per cent of the total outstanding money under the contract.

The $16.9 million was due to be paid by Wärtsilä last week, but the company decided to seek judicial review of the decision in the Supreme Court of South Australia.

The case will be heard in the Supreme Court in the next month.

Other applications have been made by Primero under the Security of Payment Act to recover what Primero believes to be the rest of the owed money.

Primero has also begun related proceedings in the Supreme Court of Western Australia.

In a statement, Primero said this was the first time it had to commence legal proceedings to recover monies owed in any contractual dispute.

Meanwhile, Primero Group also announced today that COVID-19 has had little impact on its operations.  

At May 8, Primero’s available cash balance stood at $19 million with $6.1 million of debt, $3.1 million of which was due to a new accounting lease standard.

It said its 2020 order book guidance of $195 million remained accurate, and the timing of all works in 2021 were unaffected ay COVID-19 at this stge.

Primero’s contracted order book for 2021 now stands at around $200 million.

Shares in the company were at 25.5 cents each at 3pm AWST, down from 27 cents when the market opened.