Construction at the $10 billion Roy Hill project has been marred by contract disputes.
Construction at the $10 billion Roy Hill project has been marred by contract disputes.

By Samantha James

October 7, 2015

ROY Hill EPC contractor Samsung C&T and subcontractor Best Tech have clashed in the WA Supreme Court over failed payments associated with work at the $10 billion project.

According to Best Tech, Samsung failed to make payments for the supply of about 15,000t of steel modules for the project.

Samsung stated that the Thai supplier had reneged on its contract obligations, and gave notice that it would seize a bank guarantee related to contract. This was temporarily blocked by Supreme Court Justice Janine Pritchard.

A number of Roy Hill subcontractors have clashed with Samsung, most in relation to changes to the scope of work under contracts at the Pilbara project.

NRW Holdings issued dispute notices in May 2015 for its $620 million contract after Samsung failed to make monthly progress payments.

This followed several months of negotiations between the companies on a number of “contract interpretations”.

In February 2015 construction company Laing O’Rourke terminated its contract with Samsung as a “mutually acceptable approach” to ongoing disputes relating to “longer-term commercial matters”.

Roy Hill chief executive Barry Fitzgerald said the number of contract disputes with Samsung was “quite normal” given the size and structure of the head contracts.

The project’s development was not impacted by the issues with Samsung, which related to payments made after work was completed; however, bad weather and several safety incidents had delayed first production which was originally scheduled for September.

Mr Fitzgerald said the mine was on track to begin shipping iron ore by the end of October and would ramp up to full capacity within 15 months.