EDC settles foreign contractor dispute

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BACMAN Geothermal Inc. (BGI), a wholly owned subsidiary of the Lopez-led Energy Development Corp. (EDC), said Tuesday that it has settled its disputes with foreign contractor Weir Engineering Services Ltd. (Weir).

In a disclosure to the Philippine Stock Exchange (PSE), BGI has agreed to return $1.89 million to Weir; and both parties have agreed to jointly take steps to cause the discontinuance of the arbitration.

In 2012, Weir was engaged by BGI to carry out rehabilitation works on the steam turbine and generator installations in three existing power-generating units at BGI’s Bacon-Manito geothermal power plant (BacMan Plant), Units 1 and 2 at the BacMan I Plant in Palayang Bayan, Manito, Albay, and Unit 3 at the BacMan II Plant in Cawayan, Sorsogon.

BacMan consists of BacMan I with two 55-megawatt turbines and BacMan II with 20-MW geothermal facilities.


EDC’s April 20, 2015 disclosure explained that BGI initiated arbitration with the International Court of Arbitration of the International Chamber of Commerce (ICC) in order to enforce its rights under its Contract for Works—Completion of Works to Steam Turbine and Generator of Units 1, 2 and 3 dated March 29, 2012 with Weir, following a favorable determination by the engineer appointed pursuant to the contract that the disputed sums are owed by Weir to BGI.

Arbitration is an alternative scheme of settling disputes between parties that can be done outside the confines of the courts.

EDC’s February 2, 2016 disclosure explained that BGI has received the ICC tribunal’s Phase 1 Award dated February 1, 2016, in which, among other things, the ICC tribunal ordered Weir to pay a total of $5.2 million to BGI.

Currently, all units at the BacMan plant are operational and the facility is producing a gross output of approximately 140MW.

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