Ashtrom, Dragados to pay NIS 24m compensation to Danish co

Ashtrom and Spain'sDragados were the chief contractors for Ashdod Jubilee Port, where Per Aarsleff was a subcontractor.

The Tel Aviv District Court yesterday ruled that Ashtrom Properties Ltd. (TASE:ASPR) and Spain's Dragados SA, the chief contractors for Ashdod Jubilee Port, must pay Danish subcontractor Per Aarsleff A/S (KFX: PAAL) NIS 20 million in compensation, plus NIS 4 million in court costs. The decision brings to an end the eight-year case.

Judge Avi Zamir accepted most of Per Aarsleff's claims, and rejected in full the claims of Ashtrom and Dragados for NIS 24 million in damage they allege were due to Per Aarsleff. The judge criticized Ashtrom and Dragados' negligent management of Ashdod Jubilee Port project. He said that Per Aarsleff "proved throughout that it operated under very difficult conditions which were mainly due to the flawed and negligent management by the respondents' work, management that was accompanied by acrimonious relations between the respondents and the Israel Ports Development & Assets Company Ltd."

Judge Zamir said that amateurish, negligent, not to say scandalous conduct and management of Ashtrom and Dragados were the reason for various failures throughout the project.

Ashtrom and Dragados won the international tender to expand the Ashdod Port, and they were the chief contractors for the complex marine infrastructure work. The project began in September 2000. They hired marine infrastructures engineering company Per Aarsleff to build the Jubilee Port's wharfs, pilings, and other work.

The Jubilee Project was scheduled for completion in August 2004, but was only finished in January 2007. The delay caused Ashtrom and Dragados to file a NIS 1 billion suit against the Ports Development Company for financial damages. The parties settled the suit, the details of which are confidential.

The dispute between Ashtrom and Dragados and the Ports Development Company caused Per Aarsleff's work to take sixteen months, instead of the nine months planned, and it ultimately left the country when its work was halted altogether. Per Aarsleff sued Ashtrom and Dragados in 2004 for compensation.

Published by Globes [online], Israel business news - www.globes-online.com - on June 27, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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