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Contract dispute halts transmission line work

The construction of a cross-border transmission line between Canada and the United States has been halted pending the resolution of a dispute between Montana Alberta Tie Ltd and its contractor.

“The EPC (Engineering, Procurement and Construction (EPC) has a specific section related to permitted change orders, where the actual costs related to design changes, lack of access to land, inclement weather days in excess of twenty, changes in law, and other elements outside the control of RMC provide a basis for passing additional costs to MATL,” it said.

Tonbridge announced last week that the company is working toward a resumption of construction as quickly as possible with a view to meeting the goal of delivering an operating transmission line by late 2011.

“Currently, MATL has accepted change orders totaling $3.7 million, but has rejected several more, on the basis that the requests are not supported or provided for in the EPC,” said the report.

“MATL continues to work with RMC to evaluate the validity of the change requests in the context of the quality failure experience in Alberta on S61, namely subsurface compaction failures, and the self-imposed weather delays by RMC.”

Construction in Alberta has been subject to a number of delays, as a result of problems on S61, which is a 77 kilometre H frame section of the transmission line in Alberta, from Highway 61 south to the border.

Currently, the construction has been delayed by about 120 days, as a result of materials and crew mobilization taking longer than expected, combined with challenging weather conditions during the winter months.

The contractor suspended work for several days due to + 96 kilometre per hour winds, whiteout conditions and low temperatures resulting in challenging work environments.

MATL has been working with RMC to develop a strategy to compact the remaining work and mitigate against further schedule loss, including options such as bringing in additional work crews or a second contractor.

This strategy may add a few million dollars to the cost of the overall construction budget, depending on the nature and extent of the recovery plan undertaken.

MATL expects work in Alberta to restart in June, which means substantial completion will not likely be achieved before mid-December.

The original schedule, updated jointly in June 2010 by RMC and MATL, was to have transmission line work in Alberta completed by March 31, 2011 and complete the transmission line by the fall of 2011. After receiving funding from U.S. President Barrack Obama’s stimulus package, MATL issued a formal notice to RMC to proceed to construction.

MATL will receive up to $161 million in funding from the Western Area Power Administration for the construction of the $213 million transmission line.

The project will be the first power line interconnecting the electricity markets of Alberta and Montana. Montana-based wind farm developers have purchased 100 per cent of the line’s capacity, which can be sold into either the U.S. or Canadian markets.d the United States has been halted pending the resolution of a dispute between Montana Alberta Tie Ltd and its contractor.

“Construction challenges have resulted in some disagreement with RMC (Rocky Mountain Contractors) as to who should bear certain costs of the fixed price contract,” said a report by Tonbridge Power Inc., which owns Calgary-based Montana Alberta Tie Ltd.

RMC has halted construction on a 345 kilometre power line, stretching from Lethbridge, Alberta to Great Falls, Montana.

“The EPC (Engineering, Procurement and Construction (EPC) has a specific section related to permitted change orders, where the actual costs related to design changes, lack of access to land, inclement weather days in excess of twenty, changes in law, and other elements outside the control of RMC provide a basis for passing additional costs to MATL,” it said.

Tonbridge announced last week that the company is working toward a resumption of construction as quickly as possible with a view to meeting the goal of delivering an operating transmission line by late 2011.

“Currently, MATL has accepted change orders totaling $3.7 million, but has rejected several more, on the basis that the requests are not supported or provided for in the EPC,” said the report.

“MATL continues to work with RMC to evaluate the validity of the change requests in the context of the quality failure experience in Alberta on S61, namely subsurface compaction failures, and the self-imposed weather delays by RMC.”

Construction in Alberta has been subject to a number of delays, as a result of problems on S61, which is a 77 kilometre H frame section of the transmission line in Alberta, from Highway 61 south to the border.

Currently, the construction has been delayed by about 120 days, as a result of materials and crew mobilization taking longer than expected, combined with challenging weather conditions during the winter months.

The contractor suspended work for several days due to + 96 kilometre per hour winds, whiteout conditions and low temperatures resulting in challenging work environments.

MATL has been working with RMC to develop a strategy to compact the remaining work and mitigate against further schedule loss, including options such as bringing in additional work crews or a second contractor.

This strategy may add a few million dollars to the cost of the overall construction budget, depending on the nature and extent of the recovery plan undertaken.

MATL expects work in Alberta to restart in June, which means substantial completion will not likely be achieved before mid-December.

The original schedule, updated jointly in June 2010 by RMC and MATL, was to have transmission line work in Alberta completed by March 31, 2011 and complete the transmission line by the fall of 2011. After receiving funding from U.S. President Barrack Obama’s stimulus package, MATL issued a formal notice to RMC to proceed to construction.

MATL will receive up to $161 million in funding from the Western Area Power Administration for the construction of the $213 million transmission line.

The project will be the first power line interconnecting the electricity markets of Alberta and Montana. Montana-based wind farm developers have purchased 100 per cent of the line’s capacity, which can be sold into either the U.S. or Canadian markets.