Bacman Geothermal Inc., a subsidiary of Energy Development Corp., said Friday it filed an arbitration case against the foreign contractor of the Bacon-Manito geothermal power plants in the Bicol region.
EDC said in a disclosure to the stock exchange it filed the arbitration case before the International Court of Arbitration of the International Chamber of Commerce against TurboCare Inc. and its parent company Siemens Inc. for alleged breaches of the contract.
EDC said it tapped TurboCare to conduct repair works on the geothermal power units in November 2010, but those units broke down this year. TurboCare is a subsidiary of Siemens Inc.
Bacman Geothermal said the contractor was tapped to undertake the rehabilitation of Bac-Man Units 1 and 2, the 55-MW Ansaldo-type geothermal steam turbine generators, the Cawayan 20-MW MHI-type geothermal steam turbine generator as well as the associated auxiliary equipment.
“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,” EDC said.
EDC said Parsons Brinkerhoff was the appointed engineer pursuant to the contract for works.
“EDC faced setbacks in the rehabilitation of its Bacon-Manito plant in Sorsogon related to the performance of the main contractor, TurboCare, a subsidiary of Siemens. Although we are clearly disappointed by this, we believe our best team is determined and focused on finding and implementing solutions to the issues and we are confident that all of these will be satisfactorily resolved in due time,” First Gen chairman Federico Lopez said in May.
EDC submitted the winning bid of $28.25 million for the Power Sector Assets and Liabilities Management Corp.’s auction of the 150-MW Bacman geothermal plants located in Bacon, Sorsogon and Manito, Albay in May 2010.
The facility started experiencing technical problems in 2011. The Bacman geothermal power plants consists of unit I (55 MW), unit II (55 MW) and unit III (20 MW).