The Muskrat Falls Corporation has reached a $1.83 billion agreement with Italian contractor Astaldi to finish work on a powerhouse at the hydroelectric project in Labrador.
The original contract between the Nalcor Energy subsidiary and Astaldi was worth $1.26 billion, but the two companies argued over terms as the completion date was as pushed forward and construction costs ballooned.
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Astaldi, which is responsible for construction of the powerhouse, intake and spillway at the Muskrat Falls project, demanded more money and a "bridge agreement" was announced in August to allow work to continue.
'We have a great deal of confidence going forward.' - Stan Marshall
"All disputes and outstanding commercial items have been addressed," Astaldi said in a news release from its Rome headquarters on Wednesday.
"The challenging work and its environment have made the negotiation process complex and we are satisfied for having reached this agreement," said Filippo Stinellis, chief executive officer of Astaldi Group.
Cost up $270M, no guarantees
In August, it was estimated the total cost of Muskrat Falls will be $11.4 billion, including interest. Nalcor CEO Stan Marshall told a conference call Wednesday that number has jumped an additional $270 million.
"When I went in there in April, there was considerable uncertainty," said Marshall, adding "the numbers would have been a hell of a lot more" if Astaldi was replaced.
"We have a great deal of confidence going forward," he said, but there are no guarantees costs won't rise further.
Marshall said Nalcor is expecting some damage from ice in the Churchill River through the winter months, and in the case of "catastrophic" weather, "all bets are off."
First power is expected in 2019, with full power in the second quarter of 2020, nearly two years behind schedule.