London (Platts)--19Nov2012/1203 pm EST/1703 GMT
Fluor expects to record a pre-tax charge of around $400 million in the fourth quarter of 2012 following the rejection by an arbitration panel of its claim for compensation relating to the 504 MW Greater Gabbard offshore wind farm in the UK North Sea, the US construction company said Monday. Fluor had been seeking compensation for the time and costs it incurred in carrying out additional testing and repairs to 52 turbine foundations at the wind farm, owned 50:50 by SSE and RWE. The dispute began in 2009 when defects were identified in a number of Fluor's China-made transition pieces and monopiles. The schedule and cost impacts arose from "delays, disruption and productivity issues" that Fluor said were attributable to its client (Greater Gabbard Offshore Winds Ltd) and other third parties. "Fluor delivered a quality project, and we are extremely disappointed with this unexpected decision, especially considering recent statements that acknowledge that all 140 turbines are commissioned and exporting electricity, and the overall performance is more than 10% ahead of the client's expectations," said Fluor chairman and chief executive David Seaton. Article continues below...Request a free trial of: Power in EuropePower in Europe is an indispensable resource for power executives who need critical information delivered in a clear, concise and accurate manner. It provides the insights you need for effective strategic planning, forecasting and intelligent decision making.
Fluor expects to record a pre-tax charge of around $400 million in the fourth quarter of 2012 following the rejection by an arbitration panel of its claim for compensation relating to the 504 MW Greater Gabbard offshore wind farm in the UK North Sea, the US construction company said Monday. Fluor had been seeking compensation for the time and costs it incurred in carrying out additional testing and repairs to 52 turbine foundations at the wind farm, owned 50:50 by SSE and RWE. The dispute began in 2009 when defects were identified in a number of Fluor's China-made transition pieces and monopiles. The schedule and cost impacts arose from "delays, disruption and productivity issues" that Fluor said were attributable to its client (Greater Gabbard Offshore Winds Ltd) and other third parties. "Fluor delivered a quality project, and we are extremely disappointed with this unexpected decision, especially considering recent statements that acknowledge that all 140 turbines are commissioned and exporting electricity, and the overall performance is more than 10% ahead of the client's expectations," said Fluor chairman and chief executive David Seaton.
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Power in Europe is an indispensable resource for power executives who need critical information delivered in a clear, concise and accurate manner. It provides the insights you need for effective strategic planning, forecasting and intelligent decision making.
SSE said there were "a number of related claims which remain to be determined and these will be finalized at the next stage of the proceedings." These relate to the structural integrity of the disputed foundations, and whether they meet required contractual standards over a 25-year operating life. All 140 turbines at Greater Gabbard have been operational since September 2012. The wind farm "continues to maintain a number of access restrictions around the 52 disputed turbines," SSE said.--Henry Edwardes-Evans, henry_edwardes-evans@platts.com--Edited by James Leech, james_leech@platts.com
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