ENERGY Development Corp. (EDC), the geothermal company of the Lopez Group, is no longer pursuing for arbitration of its dispute with contractors it tapped to rehabilitate the Bacon-Manito (BacMan) geothermal plants in Albay.
EDC said its unit BacMan Geothermal Inc. (BGI) and the contractors—EthosEnergy TC Inc., formerly TurboCare Inc., and Siemens Inc.—have amicably settled their dispute.
“BGI and EDC are pleased to announce that, as of today’s date (Friday), all claims under the arbitration have now been settled with the contractor on terms satisfactory to BGI and EDC, and that the arbitration will be discontinued as a result,” EDC said in a disclosure on Friday.
“EDC looks forward to pursuing new opportunities with the Siemens group, and strengthening the commercial relationship between the two companies,” EDC added.
In November last year BGI filed with the International Court of Arbitration of the International Chamber of Commerce a request for arbitration of its dispute with the contractors.
The contractors had been engaged by BGI in 2010 to carry out the rehabilitation of BacMan Units 1 to 3. Disputes arose in relation to the carrying out of those works, which were the subject of the arbitration.
BGI initiated the arbitration in order to enforce its rights under the contract for works, following a favorable determination from the engineer that sums are owed by Turbocare and Siemens to BGI.
To date, all units at BacMan are operational and the facility is producing a gross output of approximately 130 megawatts.
“The permanent fixes have now been completed on both BacMan Unit 2 and Unit 3, while BacMan Unit 1 will continue to operate with its interim solution until December 27, 2014, when it will then be shut down to install the new steam turbine rotor from Toshiba,” EDC said.
By March 20 next year BacMan Unit 1 is expected to resume commercial operations.
EDC acquired BacMan from the government auction block in 2010 for P1.28 billion.