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15 November 2016
MUSCAT: Local Omani construction firm Galfar Engineering and Contracting SAOG says it is evaluating the financial implications of an adverse decision issued by the London Court of International Arbitration in arbitration proceedings involving one of its associate companies.
The proceedings pertain to a dispute between Muscat City Desalination Company (SAOC), which owns and operates a new desalination plant at Al Ghubrah in Muscat Governorate, and International Water Treatment LLC (IWT), a company owned 30 per cent by Galfar with the rest shared by Cadagua (Spain) and Wabag (India).
A plea by IWT not to include the ‘liquidated damages clause’ in the proceedings was rejected by the London court.
In a filing to the Capital Market Authority (CMA), Galfar’s Chief Executive Officer Dr Hans Erlings said: “The likely net impact on IWT is $21 million. IWT is now studying the contractual obligations between the parties and the Company will inform about any financial impact, later on.
This award issued by the London Court of International Arbitration is related to the Engineering, Procurement and Construction contract for the water desalination project at Al Ghubrah which has been completed, passed the performance test and is in operation by the client.”
Brought into operation last year, the new water plant was developed by Muscat City Desalination Company with an investment of around $300 million.
A consortium led by Cadagua was awarded the contract to build the plant on an Engineering-Procurement-Construction (EPC) basis.
The plant has a capacity to produce 41 million imperial gallons per day (MIGD) of desalinated water for consumers in Muscat Governorate and the surrounding regions.
MUSCAT: Local Omani construction firm Galfar Engineering and Contracting SAOG says it is evaluating the financial implications of an adverse decision issued by the London Court of International Arbitration in arbitration proceedings involving one of its associate companies.
The proceedings pertain to a dispute between Muscat City Desalination Company (SAOC), which owns and operates a new desalination plant at Al Ghubrah in Muscat Governorate, and International Water Treatment LLC (IWT), a company owned 30 per cent by Galfar with the rest shared by Cadagua (Spain) and Wabag (India).
A plea by IWT not to include the ‘liquidated damages clause’ in the proceedings was rejected by the London court.
In a filing to the Capital Market Authority (CMA), Galfar’s Chief Executive Officer Dr Hans Erlings said: “The likely net impact on IWT is $21 million. IWT is now studying the contractual obligations between the parties and the Company will inform about any financial impact, later on.
This award issued by the London Court of International Arbitration is related to the Engineering, Procurement and Construction contract for the water desalination project at Al Ghubrah which has been completed, passed the performance test and is in operation by the client.”
Brought into operation last year, the new water plant was developed by Muscat City Desalination Company with an investment of around $300 million.
A consortium led by Cadagua was awarded the contract to build the plant on an Engineering-Procurement-Construction (EPC) basis.
The plant has a capacity to produce 41 million imperial gallons per day (MIGD) of desalinated water for consumers in Muscat Governorate and the surrounding regions.
© Oman Daily Observer 2016
