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Polimex Mostostal SAPolimex Mostostal rejects Azoty Pulawy's claim for payment of contractual penalties
Listed builder Polimex Mostostal has provided listed chemicals group Azoty's unit, Zaklady Azotowe Pulawy, with a response to the demand for payment of contractual penalties for the delay in the construction of the steam and coal unit, in which it rejects the claim in its entirety as unfounded, Polimex said in a market filing. In addition, the company requested the ordering party to provide a payment guarantee.
"The [Polimex Mostostal's] management board announces that it has provided Grupa Azoty Zaklady Azotowe Pulawy (...) with a response to the request for payment of contractual penalties for delay (...), in which the company rejects the aforementioned claim in its entirety as, in its opinion, unfounded," Polimex Mostostal wrote in the market filing.
As stated, Polimex requested the ordering party to provide a bank guarantee of payment for the construction works to the consortium consisting of: Polimex Mostostal, Polimex Energetyka and SBB Energy due to it under the contract up to the gross amount of PLN 189.16 million (EUR 43.5 mln).
On October 18, 2024, the Azoty group announced that the management board of its unit Grupa Azoty Pulawy had decided to charge contractual penalties to the contractor, i.e. the consortium led by Polimex, due to delays in the construction of the new coal unit.
Azoty Pulawy group has issued and delivered a debit note to the contractor in the amount of nearly PLN 359 million (EUR 82.5 mln). As stated, the contractual penalties charged relate to the contractor's failure to meet the deadline for key milestones, i. e. the synchronisation of the unit with the national grid KSE and signing of the commissioning protocol.
Azoty Pulawy 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.
The project for the construction of a steam and coal unit at Azoty group in Pulawy is being carried out by a consortium comprising: Polimex Mostostal (as consortium leader), 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 unit was for a net value of PLN 1.16 billion (EUR 266.5 mln), and the total project budget was PLN 1.2 billion (EUR 275.6 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 due to the contractor for the contract to over PLN 1.19 billion (EUR 273.3 mln) net. The total budget for the investment is PLN 1.23 billion (EUR 282.5 mln).
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