Laing O’Rourke has pulled 800 workers off a major gas project in Australia due to a payment dispute with construction partner, Japanese firm Kawasaki Heavy Industries (KHI).
The two companies are delivering four huge cryogenic tanks for the $35bn Ichthys LNG project in Darwin.
However, Laing O’Rourke claims KHI has not made payments for several months on the project, which is 90% complete.
In a statement released today, Laing O’Rourke, said: “KHI, which leads this phase, has not paid Laing O’Rourke for its work on this complex and resource-intensive remote engineering project for several months.
“Laing O’Rourke has made significant efforts to resolve the matter, but direct approaches to KHI in Japan over recent weeks have failed to produce a satisfactory outcome.
After the most recent meeting in Tokyo last Thursday, Laing O’Rourke notified the parties that it would take action to protect itself from the consequences of KHI’s conduct, unless urgent measures to rectify the situation occurred.
KHI has declined to take those necessary steps.
“Laing O’Rourke’s priority is to now attempt to redeploy staff to the company’s significant national pipeline of projects whilst also assisting sub-contractors impacted by this demobilisation.”
Laing O’Rourke, which reported a group loss of £245m in its last full-year, put its Australian business up for sale last year.
