Firms ‘unpaid’ for work on power plant

  • Major project: workers at the new North Power Station (Photograph by Akil Simmons)

    Major project: workers at the new North Power Station (Photograph by Akil Simmons)

A blame game has broken out after local construction firms claimed they were unpaid for months of work on the new power plant deemed “essential” for Bermuda’s energy future.

Three Bermudian contractors, who spoke this week with The Royal Gazette under condition of anonymity, said they were waiting on payments of tens of thousands of dollars for work on Belco’s North Power Plant in Pembroke.

One said: “You can’t have a roof-wetting ceremony for this plant and here are three quarters of the people not getting paid.”

He described himself as a “small-fry” business but estimated he was owed $20,000.

The three claimed they had been left unpaid by Michael MacLean, head of the Bermudian firm M3 Contracting.

Mr MacLean’s firm holds a contract with the Danish-based power plant specialist, Burmeister&Wain Scandinavian Contractor, which has been the main contractor since 2018.

A second local businessman, who believed his arrears for the project have topped $30,000, described the number of creditors as “amazing”.

He said he had been involved with the build along St John’s Road since late 2018 and had received regular payments from BWSC every 30 days.

He added: “With M3, we’ve never received a full payment since June last year — just partial payments. A little bit to keep us on the site. There’s quite a lot of employees that haven’t been paid. It’s a major, major mess.”

The contractor said the North Power site had been fraught with “walkouts on that job since Cup Match”.

He said: “As far as vendors and supplies, you could be talking 20 or 30.

“I’ve suggested the Construction Association of Bermuda could be the lead people to represent all of the parties.”

Simon Tully, the association president, said he had been approached by two contractors owed money.

Mr Tully said the association had sent a query to Belco to see if the payments had been sent to M3 as the group alleged — but that he had not yet heard back from the power company.

Mr Tully added: “Unfortunately, this is a private dispute between contractors — none of the players are member companies, and even if they were, we would be querying what the terms of their contracts were.”

He said the association could potentially get involved by appointing an arbiter if the parties were unable to reach an agreement — a mechanism put in place through an American Institute of Architects contract.

He added: “Our only suggestion would be for the contractors to band together with legal representation to present a unified front. Then, the contract details will be the catalyst for further action.”

Mr MacLean, in a January 27 letter to his local creditors, said BWSC “failed to honour their contractual obligations and have failed to remit full payment to us for all costs incurred under the agreements”.

The contractor also accused BWSC representatives in his letter of “misleading” vendors left in debt.

BWSC confirmed on Tuesday that it had a contract with M3 Contracting for “part of the civil construction works on the North Power Station presently under construction for Belco”.

Claus Lyskær, the project director, added: “I can further confirm that BWSC has paid M3 Contracting Ltd as per the contract agreement between M3 Contracting Ltd and BWSC A/S.

“Any unresolved issues will be handled according to the contractual provisions and we can confirm that meetings and correspondence between M3 Contracting Ltd and BWSC A/S are ongoing with the aim of reaching an agreement.”

A spokesman for Ascendant Group, the parent company for Belco, said on Wednesday that BWSC has been selected to build the North Power Station as “a reputable and professional contractor, having successfully completed a number of similar projects over the last 40 years in Bermuda, including working with local contractors”.

He added: “Belco is not involved in the agreements between BWSC and local contractors and there are contractual provisions in place to address any issues that may arise in relation to this project.”

Mr MacLean said in his letter that his company had received “some monies”, but not enough to meet “all our outstanding accounts which arose in connection with our works under our agreements with BWSC”, and had been making partial payments to vendors as a result.

He said there had been a meeting at the new power plant on January 27 to “further negotiations with BWSC and Belco regarding a final settlement”. The letter said there would be a meeting in Denmark with “senior BWSC executives” this Wednesday — and said M3 would “apply to the court to stay any proceedings arising out of our ongoing dispute” if disgruntled vendors took legal action against M3 in the meantime.

Mr MacLean’s letter added: “We are mindful that it may be some time until this matter is resolved but we are committed to addressing our account with you and, as a gesture of good faith, in addition to the partial payment which you’ve already received, we are prepared to make monthly payments on account until this matter is resolved and we are able to extinguish our debt with you in full.”

Last night, Mr MacLean said he had just returned from meetings in Denmark with BWSC and that he was “trying to negotiate something final”.

He said he could not comment further as he was trying “not to escalate the ongoing dispute”.

The third contractor who spoke with the Gazette said: “It needs to be out in the public. It seems like all the Bermudian employees are being shafted.”

He said he had invoiced M3 for just below $30,000 in September and had yet to be paid.

“I have spoken to BWSC. They assured me the invoice that came before them had been paid,” he added.

“They said the balance got sent out before Christmas. Michael MacLean is saying they haven’t paid him. Who do I believe?”

UPDATE: This story has been amended to include comment from Simon Tully, the president of the Construction Association of Bermuda.

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Published Feb 7, 2020 at 8:00 am (Updated Feb 7, 2020 at 11:20 am)

Firms ‘unpaid’ for work on power plant

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