208-day delay costs troubled coal project millions
A GLADSTONE-based coal exporter, known to be struggling financially, has been ordered to pay one of its former contractors $4 million.
Civil Mining and Construction took Wiggins Island Coal Export Terminal to the Supreme Court, seeking $14.5 million.
CMC's earth and civil works at WICET took 208 days longer than scheduled.
It blamed WICET and the administrators of the project for unnecessary delays, and disruptions.
In his evidence, CMC project manager Ben Vance said the staff were "quite frustrated" by disruptions and delays.
"We work on relatively fine profit margins in relation to the actual activity cost and it doesn't take long for a delay or disruption or change in methodology for our margin to be eroded," he said.
Brisbane Supreme Court Justice Peter Flanagan ordered WICET to pay CMC $4.086 million for the disruptions during the contracted works.
The heaviest of CMC's four claims was for variations and directions that affected the bulk earthworks of Reclamation C Bunds, a significant part of their overall contract, for which they were seeking $5.8 million.
However, the sum handed down by Justice Flanagan was about a fifth of what they were seeking, at $1.5 million.
A counter claim from WICET, seeking $12.5 million from CMC, was rejected.
WICET alleged it had overpaid the contractor, and also claimed liquidated damages.
The trial decision comes amid heightened concerns about the coal exporter's inability to repay 19 of its lenders an estimated $3.9 billion.
One of its six coal miner owners, Caledon, was also placed in administration recently, but what the extent of the impact on WICET will be is unclear.
The case isn't over for the two companies yet though, with Justice Flanagan requesting more information on five matters.
WICET and CMC are to provide further written submissions and appear again on July 28.
Lawyer Chris Woodhouse, from Thomas Geer, the firm which represented CMC, wrote on LinkedIn that it was a "leading and seminal case" on delay and disruption.
WICET and CMC were contacted for comment.