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Polimex Mostostal SAPolimex Mostostal counts on talks with Azoty Pulawy regarding delayed coal unit
Listed builder Polimex Mostostal, after receiving a summons to pay penalties for the delay in the construction of a steam and coal unit at listed chemical group Azoty Pulawy, has taken steps to safeguard the company's interests. It hopes to hold talks with Azoty Pulawy and find an agreement, Polimex Mostostal said in a press release.
"Regardless of the circumstances, we hope to quickly return to the negotiating table with the board of Grupa Azoty Zaklady Azotowe ‘Pulawy’ and discuss a mutually satisfactory solution," said the acting CEO of Polimex Mostostal Jakub Stypula, quoted in the press release.
On Friday, October 18, 2024, Grupa Azoty announced that the management board of Azoty Pulawy group, in connection with delays in the implementation of the construction of the new coal unit, had decided to charge contractual penalties to the contractor, i.e. the consortium led by Polimex.
Azoty Pulawy Group has issued and delivered a debit note to the contractor in the amount of nearly PLN 359 million (EUR 83.1 mln). As stated, the contractual penalties charged relate to the contractor's failure to meet the deadline for key milestones, i.e. synchronisation of the unit with national power system (KSE) and signing of the commissioning protocol.
Azoty Pulawy Group has called on the contractor to pay the contractual penalties within seven days of delivery of the note. Pulawy's intention is to continue working with the contractor to complete the investment.
Polimex Mostostal recalled in a press release on Monday that the construction of the coal unit started in 2019 and fell during the difficult period of the COVID-19 pandemic, the outbreak of war in Ukraine and increased inflation.
"Due to the protracted project, a request was made to the contracting authority in March 2024 for a mediation process before the Attorney General's Office. Until this request for payment of the contractual penalty was received, the formal mediation process had not started," the builder pointed out.
Polimex Mostostal said that after receiving the summons from the ordering party, the company's management had taken measures to primarily safeguard its interests.
The project for the construction of a steam and coal unit at Grupa Azoty in Pulawy is being carried out by a consortium comprising: Polimex Mostostal (as consortium leader), its unit Polimex Energetyka and SBB Energy. The supplier of the technological part for the OP-350 pulverised fuel boiler is Sefako Boiler Factory.
The 2019 contract for the construction of the coal unit stipulated that the investment would be completed in the third quarter of 2022. The completion date has been postponed several times - the September 2024 schedule calls for the coal unit to be completed in April 2025.
The original contract for the construction of the coal-fired unit was for PLN 1.16 billion (EUR 268.7 mln) net, and the total project budget was PLN 1.2 billion (EUR 277.9 mln) net.
The investment contractor made two claims for increased remuneration (November 22, 2021, and April 22, 2022). Eventually, on July 13, 2023, an annex to the contract was signed increasing the remuneration payable to the contractor for the execution of the contract to over PLN 1.19 billion (EUR 275.6 mln) net. The total budget for the investment is PLN 1.23 billion (EUR 284.9 mln).
pel/ ao/
