Warradarge wind farm. Credit: Bright Energy Investments.
Troubled contracting company Decmil has blamed delays in two major wind projects for projected revenue shortfalls which, combined with losses from other road and mining projects, have led to their CEO deciding to step down.
Decmil said the delays in Naturgy’s 57MW Crookwell project in NSW and GPG’s 218MW Ryan Corner projects Victoria have impacted its short-term revenue outlook.
It said these delays were beyond its control, but had forced it to downgrade its revenue forecasts for the current financial year to between $425m to $450 million, a fall of up to 10 per cent.
In addition, losses at two other projects – in road building and mine construction – meant the forecast profit of $7.2 million would likely evaporate to a loss of up to $15 million. As a result, CEO Dickie Dique will step down, although he will remain on the board.
“Those delays are what have driven the reduction in revenue guidance,” chairman Andrew Barclay.
Decmil had sought to de-risk its business by withdrawing from full EPC contracts for wind and solar projects following its experience with the Sunraysia solar farm, which massive delays resulted in claim and counter claim between its owners, Decmil, and the inverter supplier.
Those claims are still be be sorted in court or arbitration, but the 200MW Sunraysia solar farm is now operating at full capacity.
On the basis of its experience at Sunraysia, Decmil decided to pursue only “balance of plant” contacts to the wind and solar construction markets, such as road building, foundation, and electrical services, but this too is also subject to delays.
Ryan Corner – which has a long term PPA with Snowy Hydro – was supposed to have begun construction in February last year near Port Fairy, and had been expected to be completed by March this year.
It is now expected to begin construction this month. Decmil has a $71 million “balance of plant” contract. There was no indication when Crookwell, located in the electorate of federal minister Angus Taylor, a former anti-wind campaigner, will begin construction.
On the plus side, Decmil also announced two contracts worth $34 million for lithium mines for EV batteries, and also said it was hoping on hydrogen-related contracts.
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