First Gas, Siemens reach accord on Sta Rita plant
The Philippine Star 10/10/2006
First Gas Power Corp. (FGPC) and Germany’s Siemens AG have reached an amicable settlement of their dispute over the construction of the 1,000-megawatt Santa Rita power plant in Batangas province.
With the settlement, both parties have agreed to terminate arbitration proceedings and fully settle all outstanding obligations between them with all previous decisions of the arbitral tribunal remaining valid.
Under the agreement, Siemens will pay FGPC $10.5 million on Oct. 18.
FGPC is a wholly-owned subsidiary of First Gas Holdings Corp., a joint venture between the Lopez-controlled First Gen Corp. and British Gas.
The International Chamber of Commerce had ruled that First Gas was entitled to liquidated damages worth $99.3 million from Siemens for delays in the construction of the Santa Rita power plant.
First Gas in 2003 withheld $94.2 million in "project milestone payments" to Siemens to protect that claim.
However, the London-based tribunal declared that Siemens was "entitled to extensions of time and/or suspension of liquidated damages in respect of Block 1 and Block 2 completion of 32 days and 60 days, respectively" involving the Santa Rita project.
The dispute arose when Siemens and its subcontractors incurred delays in the completion of the project, resulting in $99 million owing from Siemens to FGPC under the turnkey engineering, procurement and construction contract forged on Dec. 16, 1996.
Pursuant to the contract, FGPC withheld about $96 million of its milestone payments to Siemens.
In Dec. 2002, Siemens submitted a request of arbitration to the ICC in which Siemens claimed payment of the sums withheld by FGPC and an additional sum of approximately $64 million for alleged prolongation costs and miscellaneous matters.
Apart from the issue of delay, First Gas also filed an $83-million counterclaim against Siemens for alleged defects in the power plant.
First Gas Power Corp. (FGPC) and Germany’s Siemens AG have reached an amicable settlement of their dispute over the construction of the 1,000-megawatt Santa Rita power plant in Batangas province.
With the settlement, both parties have agreed to terminate arbitration proceedings and fully settle all outstanding obligations between them with all previous decisions of the arbitral tribunal remaining valid.
Under the agreement, Siemens will pay FGPC $10.5 million on Oct. 18.
FGPC is a wholly-owned subsidiary of First Gas Holdings Corp., a joint venture between the Lopez-controlled First Gen Corp. and British Gas.
The International Chamber of Commerce had ruled that First Gas was entitled to liquidated damages worth $99.3 million from Siemens for delays in the construction of the Santa Rita power plant.
First Gas in 2003 withheld $94.2 million in "project milestone payments" to Siemens to protect that claim.
However, the London-based tribunal declared that Siemens was "entitled to extensions of time and/or suspension of liquidated damages in respect of Block 1 and Block 2 completion of 32 days and 60 days, respectively" involving the Santa Rita project.
The dispute arose when Siemens and its subcontractors incurred delays in the completion of the project, resulting in $99 million owing from Siemens to FGPC under the turnkey engineering, procurement and construction contract forged on Dec. 16, 1996.
Pursuant to the contract, FGPC withheld about $96 million of its milestone payments to Siemens.
In Dec. 2002, Siemens submitted a request of arbitration to the ICC in which Siemens claimed payment of the sums withheld by FGPC and an additional sum of approximately $64 million for alleged prolongation costs and miscellaneous matters.
Apart from the issue of delay, First Gas also filed an $83-million counterclaim against Siemens for alleged defects in the power plant.
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