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Pergau builders in 40m claim

THE Balfour Beatty-led consortium building the controversial hydroelectric Pergau Dam in Malaysia is in talks with the client over claims for extra payments worth up to 40 million.

Sources close to the project say the bulk of the claims concern unexpectedly poor ground conditions.

It was feared that high water pressure could fracture the rock, so the shafts leading to the power house have had to be redesigned and lined with steel.

The poor ground came to light more than two years ago. At the time the client, Malaysian electricity company Tenaga Nasional, feared it would cause delays.

But the contractors - Balfour Beatty, Trafalgar House subsidiary Cementation and local firm Kerjaya - believe the dam will still be completed on time in August next year.

The sources added that relations between client and contractor remained good despite the claims, which also cover problems at the start of the job when the contractors had difficulty getting access.

They say the contractors are already being paid for the steel lining work and that the client is extremely happy the programme deadlines are going to be met.

But the news could reopen the debate about the wisdom of building the dam Britains biggest aid project at all.

Originally, the Pergau dams cost was estimated at 317 million. By the time the contracts were signed in 1991, this had risen to more than 400 million.

If the client agrees to pay the contractors claims this figure will rise still further, but Construction News understands this will not necessarily be by the full amount as some parts of the work are coming in under budget.

The decision to fund the dam was widely criticised in the UK with opponents pointing out that the Overseas Development Administration had described the projects viability as just about acceptable at the original 317 million estimate.

The Malaysian authorities say the project is necessary to help meet the countrys booming demand for electricity.

No-one at the client or at the Malaysian ministry of power was available to comment. The contractors declined to comment.