Harland & Wolff has terminated its contract with Saipem for the supply of four wind turbine jackets for a major Scottish offshore wind project, claiming cost escalation and delays have made the work “sub-economic.” The engineering group was due to deliver four huge wind turbine foundations – known as jackets – for the Neart na Gaoithe (NNG) project being built off the Fife coast, but said Friday that it had reached the “mutual” decision with Saipem to terminate the contract.
The firm had originally signed up to provide eight jackets as part of a £26.5m deal announced in April last year, though this was later reduced to four after key materials arrived late and defective, the company said in September alongside the release of its half-year results.
In a 30 December trading update, H&W (AIM:HARL) said its original agreement was “based on the economic assumptions at that time” and it had since experienced “numerous issues with payments, delays and defective materials.”
The company said it was “determined” it would not bear the resulting cost increases “given that it has not been possible to find a mutually acceptable methodology to split these additional costs between the parties.”
“Continuing with the project will be sub-economic from a target margin perspective and would, therefore, not be in the best interests of the group,” it continued.
While the first foundations were installed earlier this autumn, a series of delays at the 450-MW wind project developed by Ireland’s ESB and EDF Renewables have pushed its completion date back to 2024. https://www.energyvoice.com/…/payment-issues-delays…/
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