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Extreme assignment ends up in court

The road across Marthabreen with tunnels on both sides. FOTO: Veidekke AS

Extreme assignment ends up in court

More than three months after the official opening of the Lunckefjell mine, Veidekke Arctic AS and Store Norske will likely meet in court. An extra 60 million kroner is being demanded for road work.

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Oppdatert:
07.04.2014 kl 14:12

The enthusiasm was great at Veidekke Arctic when in the spring of 2011 they received the entire contract for infrastructure at the mine, which officially opened in February.

The task was demanding and prestigious and included, among other things, the building of three kilometers of road over Marthabreen, a glacier that moves one meter a year, plus a tunnel entrance that reaches into the existing mining tunnel that goes through the Svea Nord facility.

Lower than expected
It is precisely this tunnel entrance that is the main reason the companies will likely meet in court in late May. The contract was originally 200 million kroner. It is therefore a solid add-on Veidekke Arctic is coming with, a whopping 30 percent.

"There is a significant additional cost, by all means," said Peter Vagle, an attorney for Veidekke, discussing the claim for 60 million kroner. "But 500,000 cubic meters is also a lot of extra mass to be addressed."

As Svalbardposten understand it, the tender was awarded based on drawings and data from Store Norske Spitsbergen Grubekompani AS as the employer.

When efforts to establish access to the glacier started it became clear the mining tunnel was 20 meters lower than predicted. According to the contractor, it should be about level with the glacier cover. Thus, 500,000 cubic meters of ice mass had to be dug out to get down to the correct height.

Around the clock
The consequence of this is the contractor had to deal with significantly more mass than originally planned, and equipment and crews worked around the clock to get access to the glacier ready on deadline. The handover over the project was required before Oct. 1, 2013.

The additional costs meant the contracting firm had to cover them.

"It also means more challenges in terms of achieving the agreed-upon deadline," said Vagle, whose firm specializes in construction law.

Store Norske was alerted when it became clear the implementation had to be changed. The pavers also wrote about the problems on their own websites during the summer of 2013.

According to Vagle, there has also been a long period of discussion about the cost. Jostein Nordstrøm has been a project leader and likely will be participating for his employer Veidekke Arctic in Nord-Troms District Court if the parties do not reach an agreement before the case starts.

Groundless demand
Store Norske is rejecting the supplemental demand and believes there is no basis for the sum.

"It concerns a so-called turnkey, where the design responsibility lies with the contractor," said Johan Fredrik Remmen, who has been Store Norske's attorney since 2006.

He doesn't deny Veidekke Arctic has had extra costs, but believes they are the responsibility of the project developer.

What about Veidekke Arctic's claim their work was based on maps and data from Store Norske?

"Our opinion is that they cannot deny their design responsibility from that as the project developer," said Remmen who, like Vagle, specializes in construction law.

There is also disagreement about whether Veidekke completed the work on time. Store Norske believes Veidekke was ten days late with the handover. That is being contested by Veidekke Arctic AS.


Far from each other
Nord-Troms District Court has set aside nine days for the dispute between the parties. Until the hearing starts on May 22 the parties have the opportunity to come an agreement. There have been several discussions, without a successful resolution.

"One can never rule out an agreement so long as the case is not closed," Remmen said. "There can also be an agreement under negotiation, but there is nothing that suggests that."

Veidekkes attorney sees the possibility of an agreement as rather unlikely.

Nøkkelord

Se bildet større

Veidekke, when starting the work between Svea and Lunckefjell. FOTO: Birger Amundsen

Faktaboks

Facts:

Contract price: 200 million kr. (excluding VAT).  

Handover: October 1, 2013.

Includes tunnel from Svea Nord, a three-kilometer road over Marthabreen, a tunnel into Lunckefjell, and construction of various buildings for the transshipment of coal, a warehouse, workshop and office, as well as electricity, water and drainage.

Contractor: Veidekke Arctic AS.

Subcontractors: Hæhre Entreprenør (earthmoving and tunneling) and Bravida (electrical work).

Consultants: Multiconsult and Bravida

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