The main contracting group building oil giant Shell’s Gangarri solar farm in Queensland has appointed its own subsidiary to continue work on the delayed project after the previous contractor, Davis Contracting, filed for administration following a dispute over payments.
The 120MW Gangarri solar farm is running way behind schedule, and hit the news last month when around 230 workers were abruptly told on a Monday morning that work had ceased and they had to immediately leave the project.
The Electrical Trades Union, and smaller sub-contractors, blamed the problem on a dispute over payments between the main EPC contractor, the Indian-based Sterling and Wilson, and the Perth-based Davis Contracting.
The industry has been hit by a series of contracting disputes, cost over-runs and delays, leading to the collapse of some big contractors, and the exit of others, and disaster for smaller contractors, as we reported here: Hung out to dry: The dark side of big solar
It has now emerged that Sterling and Wilson, which has also been hired to build the country’s biggest solar farm, the 400MW Western Downs solar project owned by Neoen, has appointed its own subsidiary GCo to replace Davis at Gangarri. GCo is now wholly owned after Sterling and Wilson announced on February 17, just over a week after the stand-downs at Gangarri, that it had bought out the minority shareholders.
Davis Contracting, meanwhile, filed for administration on March 5, owed around $6 million from the Gangarri project alone, according to the Chinchilla News. It has since been placed into the hands of a receiver, with KordaMentha acting.
Davis administrator Richard Albarran, from Hall Chadwick, has told creditors that the first meeting will be held next Wednesday.
Davis has told sub-contractors that the failure to receive payments for its work at Gangarri and other projects meant it cannot pay them. Among the projects it has recently finished is the big Wellington solar project in NSW, owned by another oil giant venture, Lightsource bp, where Sterling and Wilson was also the main contractor.
Among those waiting for payments from Gangarri are trenching contractor Sunstate Pipelines. Steve Kelly, who also Greenfields Pipeline Services, says he is owed $143,275.70, which he says is a big sum for a small company.
“We are hopeful that the administrators can sort out the mess that two major companies can’t,” Kelly told RenewEconomy.
“It shouldn’t come to this. The work’s being done, and the pay hasn’t been transferred. We’re worried that the new contractor comes in and finishes work while others are still waiting for their payment. I would have thought that Shell should stop work on this until it is resolved. It’s not a good look for the industry.”
ETU Queensland organiser Dan McGaw told the Chinchilla News that Shell needs to better protect their workers, regardless of whether they are employees or subcontractors.
“I’m concerned moving into the future we’ll see more issues for solar farm workers- the companies haven’t learnt anything from this,” he said.
“The workers under this new contract will be paid less than those who were working on the project just four weeks ago. And they will no longer get travelling allowance – it’s not right.”
Shell issued a statement to RenewEconomy saying that it is seeking further information from Sterling and Wilson and what it is proposing as next steps.
“We have been advised by Sterling & Wilson that they have terminated their mechanical and electrical contracts with Davis Contracting (WA) Pty Ltd for work on the Gangarri Solar Project, near Wandoan,” a spokesperson said.
“We are continue to work with Sterling & Wilson to ensure safe delivery of the Gangarri Project, which remains important to Shell.
“Work on the project remains ongoing, and Shell is committed to delivering the project, which will generate ongoing benefits to the local community, deliver 120 megawatts of solar electricity and reduce carbon dioxide emissions by around 300,000 tonnes a year.”
RenewEconomy sought comments from KordaMentha, Davis Contracting, and Sterling and Wilson, but did not receive a reply before publication.
