Seafarms told to pay $13m to contractor

Aquaculture company Seafarms Group has been told to pay $13.9 million to construction company Canstruct over disputes with its proposed Project Sea Dragon facility.

A Royal Institution of Chartered Surveyors adjudicator today determined Seafarms is liable to pay $13.9 million to Canstruct for claims of money owed after the suspension of work on Project Sea Dragon in December 2021 and the termination of contracts in April 2022.

Seafarms’ Project Sea Dragon is a proposed large scale prawn agriculture project in northern Australia designed to produce reliable prawn volumes for export markets.

In June 2021, capital works for the first stage of the project were estimated to cost between $275 million and $290 milion.

In October the same year, the company announced it was going to cost between $370 million and $410 million due to changes with project scope and increased material costs.

The next month, Seafarms announced it had launched a review of the flagship project after it failed to secure funding which caused delays.

The company then launched a second review in June 2022 after the original assessment determined the project should not proceed because it would not generate acceptable financial returns.   

Seafarms chief executive Rod Dyer said they were extremely disappointed with today’s decision over the contractual dispute with Canstruct.

“Seafarms provisioned $8.7 million for a settlement of this dispute in its 2022 accounts, and has the capacity to cover the balance,” he said.

“We believe the determination to be excessive and are now considering our next steps on this matter, including legal redress.

“Once that legal advice is received and considered, the company will provide the market with a further update.

Mr Dyer said the company was still focused on developing the project.

“With respect to the future of Project Sea Dragon, as stated in our announcement of 30 November 2022 the assessment of key risks to Project Sea Dragon in 2022 found there was no technical reason why it should not continue,” he said.

“We remain focused on the development of a new business case for Project Sea Dragon.”