Norwegian land-based aquaculture company Andfjord Salmon Group AS has submitted a claim of over NOK 1 billion against main contractor AF Hæhre & Contur Ans. In a statement, it advised the claim relates to grossly negligent performance of the contractor’s obligations and wilful breach of its civil works contract in connection with the construction of its facility at Kvalnes, Andøya.
The claim reflects previously communicated budget revisions including the NOK 500 million upward revised capex budget announced on 28 May this year as well as earlier communicated changes it stated.
According to the statement, the claim is related to recovery of incurred costs resulting from the contractor’s “gross negligence in executing construction methods recommended by the contractor, insufficient cost control, inadequate project management and prioritisation of work, incorrect invoicing, and compensation for costs and losses arising from the contractor’s wilful breach of contract”.
It continued: “While the construction method itself is sound, the issues stem from the contractor’s inability to deliver the work within the agreed cost framework.”
Over the past couple of months, Andfjord Salmon has released a total of 1.1 million smolt in pools K0 and K1. The smolt releases have been highly successful, proven by high survival rates and solid growth.
The ongoing fish farming operations are unaffected by the breach of contract, it said.
Pool K0 was completed in 2022, and pool K1 was completed in September this year. The construction of the next pool, K3, is close to completion. The need for further new pools for splitting of biomass and new releases will not arise until the spring/summer of 2026.
Andfjord Salmon has already engaged with several possible new contractors for completion of the next two pools - K2 and K4 – that are part of the ongoing build-out phase. Andfjord Salmon estimates mobilisation costs of approximately NOK 20 million to replace the current main contractor.
The change of contractor is expected to have a non-material effect on the company’s production plans. Due to Andfjord Salmon’s NOK 1+ billion claim, the company has withheld further payment of invoices to AF Hæhre & Contur.
