Laing O’Rourke locked in payment row on Australian job

Laing O’Rourke has pulled more than 800 workers of a major liquified natural gas project in Australia in a simmering payment row with construction partner Kawasaki Heavy Industries.

The joint venture partners are delivering two huge cryogenic tanks for the $35bn Ichthys LNG project in Darwin.

But Laing O’Rourke claims Kawasaki has not made payments for several months on the project, which is 90% complete.

It is reported that the sum involved amounts to around £125m. Sources told the Enquirer this morning that there were problems with the tanks.

A statement from the UK contractor said: “Laing O’Rourke has made significant efforts to resolve the matter but direct approaches to KHI in Japan over recent weeks have failed to produce a satisfactory outcome.”

Laing O’Rourke is understood to have warned KHI at a meeting in Tokyo last week that it would take action unless “urgent measures” were put in place.

Unions were warned this morning that Laing O’Rourke was pulling off the project, being built for Japanese petrochemical giant Inpex.

Construction, Forestry, Mining and Energy Union spokesman Josh Burling said: “We received a call to inform us that Laing O’Rourke who is in a partnerships to build the cryogenic tanks at Inpex is pulling out of the project.

“The reason behind this is that their partner Kawasaki Heavy Industries appear not to be paying Laing O’Rourke to the tune of A$200m.”

JKC, a consortium of Japanese engineering groups JGC and Chiyoda and US engineering group KBR, which is managing the construction of the onshore facilities for the Ichthys project, said that it expected the dispute between Laing O’Rourke and Kawasaki would be resolved and works would continue.

“JKC is not in dispute with the Kawasaki Heavy Industries and Laing O’Rourke Consortium and the sub-contract for this scope of work remains in place,” the consortium said in a statement.

from Construction Enquirer http://www.constructionenquirer.com/2017/03/15/laing-orourke-locked-in-payment-row-on-australian-job/

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