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Current as of 22/09/14 07:40PM NZST

Million dollar pledge frees Marsden B power station

By Joseph Aldridge of the Northern Advocate

The Marsden B Power Station being dismantled last year. Photo /Michael Cunningham
The Marsden B Power Station being dismantled last year. Photo /Michael Cunningham

The Marsden B power station has been cleared to leave New Zealand shores, following a $1 million security payment.

Indian telecommunications giant United Telecoms Ltd (UTL) has followed through with its promise to put the money into the account of its New Zealand lawyers Kensington Swan.

The payment clears the way for a court injunction blocking shipping of the dismantled power plant to be lifted.

The Marsden B station was dismantled by South Pacific Industrial (SPI) who took UTL to court, claiming the job took longer and cost $2.5m more than originally agreed because of unexpected asbestos found at the station.

The parties have now agreed to put the court action on hold while they try to resolve their dispute through arbitration.

In the meantime High Court Judge Justice Heath has confirmed the $1m has been paid and lifted the freezing order that had temporarily blocked the shipping of the $20m power station to India.

UTL bought Marsden B power station from Mighty River Power in 2008 for $20.4 million, with the view of dismantling it to take to India to fire it up there.

SPI won the contract to dismantle the plant and pack the parts for shipping to India, and started work in June last year.

However, work stalled three days later when SPI discovered more asbestos than had been expected at the site.

After agreement between the two parties, work continued but a dispute arose as to how much SPI should be paid for the additional work.

UTL paid some of the extra costs but SPI has lodged a claim for $2.5 million.

Justice Heath will hear the claim in full later this year.

Marsden B was built in the 1970s adjacent to New Zealand's first major oil-fired power station, Marsden A.

- APNZ

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