The two EPC contracts awarded to Società Italiana per Condotte d’Acqua S.p.A (Condotte) on the Follo Line project have been terminated by Bane NOR due to the contractor’s recent financial problems. Bane NOR will reclaim control of the contracts.
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It is Bane NOR’s opinion that any further cooperation with Condotte in this situation would involve a high risk, and to secure the economy, quality and progress of the Follo Line Project the two contracts have been terminated.
- The primary concern of Bane NOR is to complete the Follo Line Project to a high standard and within the given budget at the end of 2021. Immediate action is necessary to achieve these objectives.
Condotte are in debt to several of their subcontractors and this has led to a full stop in the construction work, says Per David Borenstein, Project Director of the Follo Line Project.
Since the summer of 2017, Bane NOR has monitored the financial situation of Condotte and has been in close contact with the top management in Rome on a regular basis. On 8 January 2018 Condotte filed for protection against bankruptcy at court in Italy, and this request was approved. According to contract, Bane NOR demanded that the construction work should continue as normal while Condotte is restructuring the company. In spite of this, the construction work has now been halted.
- By not fulfilling their commitments, Condotte leave Bane NOR with no other option than to terminate the two contracts to ensure progress and to limit the economic consequences to the Follo Line Project, says Borenstein.
Bane NOR is now resuming the construction work covered by the two contracts, i.e. construction work near the centre of Oslo. For this purpose, Bane NOR is taking over Condotte’s contracts with the subcontractors, signing new contracts where necessary.
- Reclaiming control of the contracts will enable the Project to resume the construction work within a short period of time together with the subcontractors. Both Norwegian and foreign subcontractors have delivered excellent contributions to the Project, and Bane NOR are sorry for any inconvenience caused by the financial situation of Condotte, says Project Director Per David Borenstein.
Two out of five large EPC contracts in the Follo Line Project with a value of 3,5 billion NOK had been awarded to the Italian company Società Italiana per Condotte d’Acqua S.p.A in 2015. Approximately 100 subcontractors and suppliers have been commissioned by Condotte. The financial problems Condotte are now experiencing are caused by operations they have had outside of Norway.
Nina Aasmundsen, Communication Manager, The Follo Line Project – tel. +47 412 23 139
Per David Borenstein, Project Director, The Follo Line Project – tel. +47 928 45 050