Monadelphous in coal dispute

ENGINEERING and construction firm Monadelphous has found itself embroiled in a contract dispute over the Wiggan Island Coal Export Terminal development at Gladstone in Queensland.

Haydn Black

The dispute relates to two Monadelphous contracts worth $A330 million for services to be delivered under a 50:50 joint venture with Malaysia’s Muhibbah Construction (Monadelphous Muhibbah Marine JV).

MMM’s contracts covered the construction of offshore plant and infrastructure with a 1.8 kilometre approach jetty and transfer tower platform, wharf, wharf conveyor including the drive and take up tower, berthing and mooring dolphins, ship access platforms, jetty conveyor and transfer tower.

The WICET project was originally expected to be completed in the first quarter of 2014.

After two years onsite, during which time the JV substantially completed the work, owners of the project have decided to dispute a number of claims lodged relating to changes in the scope and nature of the works that were needed for the export terminal.

MMM has lodged a number of claims with Queensland’s Building and Construction Industry Payment Agency in order to obtain payment for these claims, but WICET has countered that with allegations that it is owed funds based on a number of backcharges and deductions lodged with MMM.

Monadelphous does not consider WICET’s claims to be valid and claims WICET has improperly drawn down $19.46 million from bank guarantees to WICET before the matter has been adjudicated.

Monadelphous says WICET’s actions are “unwarranted and unusual” and it wants to push ahead with its expense claims, as well as seeking to recover the bank guarantees, launching legal action against


The company will also seek appropriate damages.

“Regardless of the outcome of these legal proceedings, WICET’s unilateral action in calling Monadelphous’ bank guarantees is not expected to have a material impact on the overall earnings of

Monadelphous,” the company said in a statement.

WICET is a holding company representing a mix of major and minor coal miners comprising Glencore, New Hope Corporation, Aquila Resources, Wesfarmers, Caledon Coal, Cockatoo Coal and Yancoal.

Junior miner Bandanna Energy was in the mix before being placed in administration earlier this year due to the plunge in global coal prices.

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