Windlab, Kennedy EPC contractor reach stand-still agreement

Image via Flickr/Joe Gratz (CC0 1.0)

February 13 (Renewables Now) - Windlab Ltd (ASX:WND) has reached a four-week stand-still agreement with the firm contracted to build the Kennedy Energy Park (KEP) in Queensland in an attempt to settle their ongoing contractual dispute outside of court.

Windlab and the engineering, procurement and construction (EPC) contractor, which is a joint venture (JV) between Vestas Wind Systems A/S (CPH:VWS) and Quanta Services Inc (NYSE:PWR), are suing each other over the delay of the hybrid renewable energy project. Windlab’s stance is that the contractor has to cover the project delay costs because it failed to deliver in time a fully functioning, compliant generator performance standard (GPS) model and electrical plant meeting the network standards. 

The stand-still deal follows an adjudication under the Queensland Building Industry Fairness (Security of Payment) Act 2017, which ruled that Windlab must pay the contractor roughly AUD 7.5 million (USD 5m/EUR 4.6m) in milestone payments, variation claims and delay costs, and that the contractor cannot be forced to bear the cost of the project delays. Windlab said at the time that this was an interim payment decision under review for enforceability.

The EPC contractor has requested the stand-still agreement in order to avoid protracting the case and with the hope that the parties could negotiate a resolution outside of court.

“During this stand-still the parties will in good faith seek an overall commercial resolution of all disputed claims and provide KEP with certainty concerning the outstanding network system registration and commercial operation of the project,” Windlab’s latest statement reads.

The Kennedy complex combines 43.2 MW of wind, 15 MW of solar and 2 MW/4 MWh of Tesla battery storage capacity. It is a 50/50 JV between Windlab and Eurus Energy Holdings Corp of Japan.

(AUD 1.0 = USD 0.673/EUR 0.618)

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