Land-based salmon farmer Andfjord Salmon has submitted a more than NOK 1 billion (USD 99 million, EUR 85 million) claim against its main building contractor, AF Hæhre & Contur Ans, which was part of the construction of its Kvalnes, Andøya, Norway-based salmon-farming facility.
Andfjord, in a posting on the Oslo Børs, said its claim “relates to grossly negligent performance of the contractor's obligations and willful breach of its civil works contract” related to the construction. Andfjord said the claim is connected to a NOK 500 million (USD 49 million, EUR 42 million) upward revision in the capex budget the company announced earlier this year.
“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 prioritization of work, incorrect invoicing, and compensation for costs and losses arising from the contractor's willful breach of contrac,” Andfjord Salmon said. “While the construction method itself is sound, the issues stem from the contractor's inability to deliver the work within the agreed cost framework.”
AF Hæhre & Contur listed Andfjord Salmon as a project on its website, with a market completion date of 2026.
The company said it has engaged with other contractors for completion of its next two flow-through salmon pools, and that the change will have a “non-material effect” on its production plans. It also said it is now withholding payment from AF Hæhre & Contur.
Andfjord Salmon said the fish-farming operations have been unaffected by the dispute with its contractor and that its recent smolt release has been successful and it has now released a total of 1.1 million smolts.
“The ongoing fish-farming operations are unaffected by the breach of contract,” Andfjord said.
Andfjord Salmon CEO Martin Rasmussen said the company has been happy with conditions of its salmon pools.
"We have completed two successful smolt releases. This has been followed by smooth acclimatization to the new flow-through seawater environment, which has led to feed intake from day one in the pool,” he said. “The results are survival rates that are higher than forecasted and growth above expectations.”
