Saudi's SWCC cancels EPC contract with Samsung Engineering

The contract for a major power and desalination plant in Yanbu Industrial City, Saudi Arabia, has been cancelled by Saline Water and Conversion Corporation (SWCC) after it disagreed with EPC contractor Samsung Engineering over project changes.

Yanbu Industrial City is on the shores of the Red Sea in the north west of Saudi Arabia

Yanbu Industrial City is on the shores of the Red Sea in the north west of Saudi Arabia

The news was reported by Korea Economic Daily, which quoted a regulatory filing on the subject from Samsung Engineering.

SWCC changed its specifications for turbines for the 3,100 megawatt power and desalination plant, and then ended the contract after the two sides were unable to reach a new agreement on price. The project was due to complete at the end of 2016, but this date had been revised to August 2018 on agreement.

The project is worth KRW1.6 trillion ($1.4 billion), and the contract was originally awarded to Samsung Engineering in 2012 on an engineering, procurement, construction, and testing basis.

Samsung Engineering said that it had received payments of $830 million in line with the project's progression, and that the plant is about 55 per cent complete.


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