Redhall claims victory in Saltend dispute

SUPPORT services group Redhall said today it had won a dispute with Vivergo Fuels over the termination of a contract for building a biofuel factory near Hull.

Redhall claimed the total costs outstanding, including for a settlement with workers and legal fees, amounted to £16.7m.

Earlier this year Wakefield-based Redhall was told its contract to make and install pipework on the Vivergo Fuels site at Saltend was being cut short because of “unacceptable” performance.

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The contract termination left about 430 workers without jobs, with both Redhall and Vivergo denying responsibility for them.

Today Redhall, which said third-quarter trading was in line with expectations, said in a statement: “It was determined by the adjudicator that Vivergo had unlawfully attempted to terminate its contract with the company and, by denying the company’s workforce access to the site, had repudiated the contract.

“The company is vigorously pursuing the process to recover damages for Vivergo’s contract repudiation and also to recover unlawfully withheld monies. The total costs outstanding on the contract at 30 June 2011, including settlement with the company’s former employees on the Vivergo site and legal fees, amounted to £16.7m.”

Redhall won the £18m contract last year to work on the £200m bio-ethanol site for oil giant BP and partners British Sugar and Du Pont.

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It argued its work on the site, neighbouring the existing BP Chemicals Saltend plant, was 78 per cent complete when Vivergo terminated the contract.

However, Vivergo claimed the work was only 69 per cent complete and should have been totally finished by last month.

In April Redhall agreed to pay £1.2m to former staff who lost their jobs.

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