Downer clinches $680m Carmichael contract notices

DOWNER EDI has received two letters of award totalling $680 million from Adani Mining advising of its intention to enter into contracts in relation to the coal handling and preparation plant at its proposed Carmichael coal mine complex in Queensland’s Galilee Basin.
Downer clinches $680m Carmichael contract notices Downer clinches $680m Carmichael contract notices Downer clinches $680m Carmichael contract notices Downer clinches $680m Carmichael contract notices Downer clinches $680m Carmichael contract notices

Map showing Adani's proposed Carmichael mine and rail project.

Lou Caruana

The first award relates to the engineering, procurement and construction works for the CHPP with the project to be delivered by a joint venture between Downer and POSCO Engineering and Construction Australia, valued at about $420 million.

The second award relates to the operations and maintenance activities for the CHPP to be performed by Downer, with an estimated value of $260 million over the initial five-year term with two additional one-year options.

“Both letters of award are subject to the parties executing binding contracts, with either party able to terminate themif contracts are not executed by September 30, 2015,” Downer EDI said in a statement.

“Condition precedents in the contracts are expected to include Adani obtaining all necessary statutory approvals and project finance to develop the proposed mine.”

Adani said that for the past six to 12 months, it has maintained a level of investment, jobs and sub-contractor engagement for its mine, rail and port projects in anticipation of finalising approvals and decisions.

“The project budget was based, understandably, on these anticipated approvals timelines and milestones,” it said.

“As a result of changes to a range of approvals over that time, it’s necessary to synchronise our budget, project timelines and spending to meet those changes.

“Adani has made a commitment to build a long term future with Queensland that will deliver 10,000 jobs and $22 billion in royalties and taxes that will be reinvested back into community services.

“However, it is important to note we are now into the fifth year of development and approvals and therefore the need to finalise those approvals and timelines is critical.”

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