Group Five dumped by Ghanaian client

print

Group Five dumped by Ghanaian client

Published Date: 2018-12-03 | Source: Stephen Gunnion | Author: Stephen Gunnion

Group Five dumped by Ghanaian client

The Kpone power project has been plagued by problems and delays, resulting in Cenpower demanding the maximum penalty payment.

Group Five has been relieved of its contract to complete an oil and gas power plant at Kpone in Ghana after it was fired by its client, Cenpower Generation Company. However, while the construction and infrastructure group was told by Cenpower that the contract had been cancelled, it said the purported notice of termination was wrongful and constituted a repudiation of the agreement. So it's gone ahead and issued a notice of termination to Cenpower.

The Kpone plant has been plagued by problems and delays, resulting in Cenpower demanding the maximum penalty payment of $62.7 million from two of the bank guarantee providers for the project. Last month, the High Court of Johannesburg dismissed Group Five's application to interdict Cenpower from demanding payment on the bonds, saying that the legal requirements in terms of the bonds had to be separated from Group Five's contract to build the plant. Group Five said its failure to complete the project by last month, the latest deadline, was due to contaminated fuel supplied by Cenpower. The plant was supposed to be commissioned last year.

It said the termination of the contract enabled it to proceed to dispute resolution for all amounts due and owing to the group under the contract. It's made a submission to the International Chamber of Commerce in Paris for claims against the client and that it had been advised that its claims have merit. It expects the first disputes to be completed early next year.

Its shares closed unchanged at 39c on Friday. The announcement was made after the close of trade.





Similar Stories