Maritime Link contractor falls behind schedule
Productivity targets missed for overhead transmission lines in Nova Scotia and Newfoundland and Labrador
The financially troubled Spanish energy company hired to build 400 kilometres of overhead transmission lines in Nova Scotia and Newfoundland and Labrador for the $1.5 billion Maritime Link, missed productivity targets three months in a row this spring and is now behind schedule on the project.
The gloomy assessment of Abengoa S.A. was filed in a second quarter update with provincial regulators last week by Nova Scotia Power Maritime Link — an Emera subsidiary and sister company of Nova Scotia Power.
"While transmission line construction of the HVdc lines is behind schedule due to Abengoa performance, timely completion is achievable," the update states.
The Spanish company was awarded the $155 million US contract in the spring of 2015 to build overhead transmission lines in Newfoundland and Nova Scotia.
Filed for creditor protection
It's a key piece of the Maritime Link being built to carry Muskrat Falls hydro electricity from N.L. to a mainland grid connection in Cape Breton.
Last November, Abengoa filed for creditor protection as it tries to restructure $16 billion of debt.
The second quarter update says Abengoa missed its productivity target in March requiring the company to provide a recovery plan, which was rejected by NSPML in April.
More ominously, the Emera affiliate issued a notice of default to Abengoa and a notice of claim on the performance bond, the company's financial guarantee that it will perform its obligations.
'We continue to work with them'
Emera Newfoundland and Labrador spokesperson Jeff Myrick would not discuss the performance bond and other sureties obtained on Abengoa and its key subcontractor Powertel Utilities Contracting.
"Abengoa continues to be operating under creditor protection. While they go through that process, we continue to work with them and to honour our commitments under the contract," Myrick said in an email statement to CBC News.
"As part of honouring our commitments under the contract, we are required to respect the confidentiality of commercial matters involving our contractors."
Myrick ignored a request for information about what work has been performed by Abengoa S.A.
Missed productivity targets
The NSPML update says Abengoa also missed productivity targets in April and May.
Myrick repeated Emera's corporate position that the Halifax based company will deliver its part of the Muskrat Falls development.
"The Maritime Link Project remains on budget and on schedule for completion in late 2017."
Nova Scotia Power customers will begin footing the $1.5 billion bill for Emera's share of the Muskrat Falls development cost — the so-called 20-20 deal.
NSP customers will pay 20 per cent of the cost in return for 20 per cent of the electricity.