Listed contracting company Temp Australia has extended the trade suspension in its shares for another two weeks as it continues negotiations over cost blowouts at the Cohuna solar farm in Victoria.
The company had said two weeks ago that it would provide an update to the market on Monday, but instead sought another two week extension, saying only that “negotiations continue to show reasonable progress” but the key terms are not finalised.
Tempo asked for a trading halt, then a suspension of its shares in April, when it also announced the departure of its CEO, CFO and a board member, blaming cost over-runs at a project widely assumed to be the 35MW Cohuna solar farm, where it has a $15 million contract.
Cohuna is the company’s first venture into solar farm construction, but is not the first to run into problems. The multi-billion dollar RCR Tomlinson collapsed last year, primarily due to the impact of budget over-runs, connection delays and cash flow problems at many of the 12 solar farms it had contracted to build.
RCR has now been wound up, and its solar business closed. Ironically, Tempo brought in former RCR chief executive Paul Dalgleish to advise it on the issues it is now facing.
Cohuna, a 34MW (DC)/27MW (AC) project, located 25kms east of Kerang, is a $59 million project that is owned by Italy’s Enel Green Power, which also owns the Bungala solar projects in South Australia. Enel spokespeople did not respond to requests for comment.
Tempo has a $15.1 million contract for the Cohuna solar farm, which last year was one of six solar and wind projects to win the first reverse auction held by the Victoria government as part of its 40 per cent renewable energy target by 2025. It has a 15 year contract with the state government.
The suspension occurred just weeks after the solar farm began construction.
Numerous solar projects have been hit by connection and commissioning delays, and cost over-runs, some of it caused by the need for new equipment to deal with system strength issues.
Some solar plants have been built but not connected. In Queensland, the 65MW Rugby Run solar farm owned by Adani Renewables (pictured above) was “mechanically complete” in late October last year, but for seven months has been sitting idle with no connection and no injection into the grid.