Group Five and Cenpower contract dispute takes new twist
Just days after terminating its contract with Group Five, the Ghanaian company is now demanding $60.5m to finish work on its much-disputed power plant
The bruising contract dispute between Group Five and its Ghanaian client has taken a new twist.
Cenpower Generation is now claiming $60.5m from Group Five to finish the $410m Kpone power-plant project, which is more than a year behind schedule.
The latest developments come days after Cenpower terminated the contract with the struggling JSE-listed construction and engineering group.
The two parties have blamed each other for the delay in completing the 340MW fuel-fired thermal power plant.
Group Five said in a statement on Thursday that a new claim represents the client’s evaluation of the costs to finish the project, as well as estimated losses and damages the client believes it has suffered.
Cenpower is also demanding that Group Five’s bank guarantee providers pay $43.8m of the $60.5m claim.
Group Five said it was seeking legal opinion on the latest claim by the client.
“The group strongly disputes the amount claimed and the demand for its payment, as the client themselves confirmed that the construction on the plant was complete, with only testing and commissioning to be performed,” the SA company said.
“As communicated, the provision of the fuel was the client’s responsibility and the group was unable to complete the testing and commissioning of the plant as the fuel provided by the client was contaminated and unfit for its purpose.”
Group Five recorded a R1.3bn loss for the contract in its results for the year to end-June.