Sonelgaz pays $100 million to achieve power plant

Algeria’s Sonelgaz will pay additional $100 million t its foreign partners in a power plant project in the province of Tipaza (west of Algiers).

• This decision comes to end the conflict between the two sides following a request submitted by the Canadian SNC-Lavalin to its Algerian associates in the project. It asked them to pay the money claiming that equipments’ price soars in the international market.
• This request is not in conformity with contractual conditions in terms of the right to ask for additional payment for the deal.
• The Canadian company asked Sonelgaz to pay $200 million but the Algerian side rejected it before changing its decision and accepting to pay the half of the sum.
• The Algerian side which owns 49 percent of the project did not ask for compensation over the delay.
• SNC-Lavalin was supposed to deliver the project by the end of 2008.
• The project value is estimated at $826 million. Three Algerian public banks guarantee $578 million of the cost.