SCEE to finish Burrup project

Perth-based Southern Cross Electrical Engineering has been hired to finish off work at Yara International’s $US800 million Burrup ammonium nitrate project in the Pilbara, after Downer walked off the job last week.

In a brief statement today, SCEE said it had been engaged by Tecnicas Reunidas to perform completion and commissioning works at the Burrup project near Karratha, but did not disclose the value of the contract.

Tecnicas is the head contractor at Burrup, responsible for the engineering, procurement and construction of a technical ammonium nitrate plant at the project.

The project is nearing completion.

Last Wednesday, Downer laid down tools and demobilised from the Burrup project, citing a contractual dispute with Tecnicas as the reason.

“Downer has not taken this decision lightly but considers it has no alternative given Tecnicas’ conduct,” the contractor said.

Downer was hired to install pre-fabrication modules supplied by Tecnicas, in March last year under a deal worth $72 million.

But the work involved eventually stretched the contract’s value out to about $89 million.

Downer is also referring additional claims worth over $60 million to arbitration.

The company said the claims include costs for the growth in the contract quantities and re-work required, as well as costs incurred as a result of delays and disruptions.

SCEE shares were unchanged at 34 cents each at 12:10pm.