Harland and Wolff has reached a £16m contract settlement with Saipem for its incomplete work to deliver eight jackets for EDF Renewables’ 450MW Neart na Gaoithe wind farm off east Scotland.
The Belfast-headquartered company said it has been paid the amount in full for the contract that was originally placed in April 2021 and had an original value of £26.50m.
Saipem removed four partially completed bases from H&W in September last year and signed a revised contract with a value of £23m for the fabrication of the remaining four.
These works were also later removed from the company in December after H&W said it “encountered numerous issues with payments, delays and defective materials” for the jackets which meant it was unable to continue with the fabrication work.
Methil is now expected to be used to carry out the fabrication of four barges in tandem across the next two weeks for a separate contract with Cory Group.
“Having completed the contract settlement with Saipem in its entirety, the company will undertake a process of rationalising the Methil facility’s workforce to approximately 115 core personnel in order to align the Company’s resources and cost base with the level of work being undertaken at the site while protecting its margins,” Harland and Wolff said.
“Given the typical longer-term nature of contracts within the renewables and defence, the company continues to ensure that its workforce is appropriately positioned to execute on near term requirements,” it added.
“The Company considers that the lead time to secure contracts in the renewables space takes approximately 12 to 36 months and a number of such tenders have already been submitted for additional work at Methil over the mid to longer term.
“Meanwhile, the company is also advancing on a pipeline of nearer-term smaller projects which it expects to undertake over the coming months.”
Harland and Wolff chief executive officer John Wood said: “The Saipem project was the first project to arrive in Methil after our acquisition of the facility.
“With the previously announced delays and the changed economic position of this project, it was in the company’s best interests to draw the project to a mutually acceptable close.
“The project has been a helpful learning curve for the business in this environment and we will take the lessons learned forward into our next major project.
“In the meantime, the teams are focusing on constructing barges while contract discussions and negotiations advance for another large project.
“In the interim, the company is focused on progressing its pipeline of opportunities across its different sites and markets and remains steadfast in its approach to executing on contracts which maintain strong and attractive margins.”