EDC unit sues Bac-Man contractor

MANILA, Philippines–A wholly owned subsidiary of Energy Development Corp. (EDC) is seeking payment from a contractor over alleged breaches in contract for the Bacon-Manito (Bac-Man) geothermal plant complex in the Bicol region.

Information from EDC showed that Bac-Man Geothermal Inc. (BGI), the EDC unit that owns and operates the BacMan power plants, filed Wednesday an arbitration request in the International Court of Arbitration of the International Chamber of Commerce.

The request is to resolve a dispute with Weir Engineering Services Ltd. (Weir), from which BGI is seeking payment of $8,818,667 “on account of Weir’s breaches.”

EDC said BGI engaged Weir to carry out rehabilitation works on steam turbine, generator and rotor installations in three existing power-generating units at BGI’s BacMan geothermal power plant.

The works were to be done at steam turbine and generator Units 1 and 2 at the BacMan I Plant in Palayan, and Unit 3 at the BacMan II Plant in Cawayan under a contract dated March 29, 2012.

BGI initiated the arbitration to enforce its rights under the contract as appointed project engineer Parsons Brinckerhoff Philippines Inc. determined that Weir owes payments to BGI.

Earlier, BGI received a request for arbitration filed by its contractor with the Construction Industry Arbitration Commission (CIAC), EDC said in a disclosure to the Philippine Stock Exchange.

The dispute was due to “alleged unpaid balance of contract price, legal interest and attorney’s fees, liquidated damages and sums due to BGI in relation to defects and damage caused by workmanship.”

The Lopez-led firm said that Weir had been engaged by BGI in 2012 for the completion of works to the steam turbine and generator of BacMan Units 1 to 3.

EDC recently completed the installation of a new steam turbine in Unit 1 of the 130-megawatt (MW) BacMan power plant, improving the facility’s output capability.

BGI installed the brand new Toshiba steam turbine rotor unit and diaphragms for its Unit 1.

Referring to the installation as a “permanent fix,” EDC said the power plant’s Unit 1 is currently operating at its rated load of 55MW.

In December 2014, EDC said new turbines had already been installed in Units 2 and 3.

Units 2 and 3 earlier had a 30-day reliability run successfully completed following the installation of a brand new Toshiba generator, EDC said at the time.

BacMan was damaged during Typhoon “Glenda” last year. By end-September 2014, EDC said Unit 1 was operating at its rated load of 55MW since it returned to service post-Typhoon Glenda.   Units 1 and 2 each have a rated capacity of 55MW and Unit 3’s rated capacity is 20MW.

The Makati-based CIAC is one of the implementing boards of the Construction Industry Authority of the Philippines (CIAP) that was created on Nov. 28, 1980 by virtue of Presidential Decree (PD) 1746, as amended by Executive Order (EO) Nos. 677, 768, 1008 and 133.

CIAP promotes, accelerates, and regulates the construction industry.

Its other implementing boards are the Philippine Contractors Accreditation Board or PCAB, Philippine Overseas Construction Board or POCB, and the Philippine Domestic Construction Board or PDCB.