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Laing O'Rourke withdraws 800 workers from Australian project

Laing O’Rourke has stood down about 800 workers on a major gas project in Australia due to an alleged dispute with Japanese firm Kawasaki Heavy Industries (KHI). 

The two firms are building four cryogenic tanks as part of the $34bn AUD (£21bn) Ichthys LNG Tanks Project in Darwin.

Work on the job is reportedly in its “final stages” after construction began in mid-2013.

Dartford-based Laing O’Rourke said in a statement: “KHI, which leads this phase, has not paid Laing O’Rourke for its work on this complex and resource-intensive remote engineering project for several months.

“Laing O’Rourke has made significant efforts to resolve the matter, but direct approaches to KHI in Japan over recent weeks have failed to produce a satisfactory outcome.”

Laing O’Rourke said its priority was “to now attempt to redeploy staff to the company’s significant national pipeline of projects while also assisting subcontractors impacted by this demobilisation”.

Laing O’Rourke, which reported a group loss of £245m in its last full-year, put its Australian business up for sale last year.

However the group was unable to agree terms with any of four serious bidders, each of whom wanted something different, including some who wanted to buy the group and used talks over the Australian arm as a stalking horse.

Founder and chief executive Ray O’Rourke said in an exclusive interview with CN published earlier this month: “With construction companies, it’s difficult to fix the value – they’re a moving piece.

“Of the five or six who were interested in Australia, four were very keen but each of them wanted something different. One or two said we’d like to buy the group, and the group is not for sale.”

Construction News has contacted KHI for comment.

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