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Primero Group (ASX:PGX) disappointed by Wartsila dispute result
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  • Engineering firm Primero Group (PGX) has provided an update on its Barker Inlet Power Station contract dispute with Wartsila Australia
  • Primero claims that Wartsila owes the company substantial outstanding funds, in light of significant changes made to the contract
  • The company received approximately $16.9 million in April 2020, which covers only 25 per cent of the total amount owed
  • The Supreme Court of South Australia has now quashed that decision, after reviewing the original adjudicator’s jurisdiction
  • Primero Group closed 5.77 per cent down for 24.5 cents per share

Engineering firm Primero Group (PGX) has provided an update on its Barker Inlet Power Station contract dispute with Wartsila Australia.

While Primero worked on the power station project in South Australia, Wartsila made changes and variations to the design. This resulted in progressively more significant extensions of the project’s scope, contract period, and service value.

Primero claims that Wartsila owes the company substantial outstanding funds, in light of the changes which required considerably more work. 

In late April 2020, an adjudication determination against Wartsila awarded Primero approximately $16.9 million, under the South Australian Security of Payment Act (SOPA).

However, Primero’s initial SOPA application only covered approximately 25 per cent of the total outstanding amount owed under the contract.

More recently, the SOPA decision was challenged by Wartsila, which sought a judicial review of the adjudication in the Supreme Court of South Australia.

The judicial review did not challenge the merit of Primero’s claims, but rather the adjudicator’s jurisdiction to make the determination in the first place.

At 2:30pm AEST on September 2, the Court handed down its judgement regarding the proceedings. The Court directed that the adjudication decision from April be quashed, on the basis that the trigger for payment was not achieved on February 28, 2020.

In the company’s announcement, Primero expressed its reaction to the judgement.

“Primero is naturally disappointed with the Court’s decision. However, the decision does not pertain to the merits of Primero’s claims against Wartsila – simply the adjudicator’s jurisdiction to determine a limited number of Primero’s claims under the initial SOPA application,” the company said.

Primero Group closed 5.77 per cent down for 24.5 cents per share.

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