Heron said that this claim amount is over and above the agreed A$109M guaranteed maximum price EPC contract sum that forms the basis for the construction of the Woodlawn project.
Heron Resources (ASX:HRR) has reported that after the close of business on Friday 1 February 2019 it received a Progress Claim from Sedgman, a wholly owned CIMIC Group Limited company, for additional costs of A$49.9M.
Heron said that this claim amount is over and above the agreed A$109M guaranteed maximum price EPC (engineering, procurement and construction) contract sum that forms the basis for the construction of the Woodlawn project.
As quoted in the press release:
The contract superintendent will now assess Sedgman’s new claim within the next 10 business days, however the company notes that the quantum of this claim, if it were to be accepted by the contract superintendent, would result in the current guaranteed maximum price under the EPC contract being exceeded by 46 percent. Heron considers that Sedgman’s progress claim is inconsistent with the terms and intent of the guaranteed maximum price EPC contract, and is disappointed that Sedgman has elected to pursue this course of action within the context of this contractual arrangement.