EDC seeks arbitration over BacMan dispute

MANILA, Philippines - Energy Development Corp. (EDC), the geothermal company of the Lopez Group, has filed for arbitration of its dispute with contractors tapped to rehabilitate the Bacon-Manito geothermal plants in Albay.

In a disclosure to the Philippine Stock Exchange, EDC said its subsidiary Bacman Geothermal Inc. (BGI) filed with the International Court of Arbitration of the International Chamber of Commerce a request for arbitration of its dispute with Turbo Care and Siemens Inc.

Bacman Geothermal allege breaches by the two contractors of the company’s November 2010 contract, which required the contractor to undertake the rehabilitation of BacMan Units 1 and 2, the 55-megawatt Ansaldo-type geothermal steam turbine generators, the Cawayan 20-MW MHI-type geothermal steam turbine generator, as well as their associated auxiliary equipment.

“Bacman Geothermal initiated the arbitration in order to enforce its rights under the contract for works, following a favorable determination from the engineer that sums are owed by Turbocare and Siemens to BGI,” EDC said.

In February 2013, EDC commenced commercial operations of the BacMan plants after successfully rehabilitating the facility, which had been shut down since 2009 but the operations have been intermittent due to tests and maintenance shutdowns.

In September, EDC said that it has decided to extend the shutdown of BacMan’s Unit 1, which was announced in the early part of that month, after a third party inspection detected hairline cracks in two turbine blades of Unit 1.