Borealis Retendering Belgian PDH Plant Contracts

25.08.2022 - Borealis has announced it will retender the majority of contracts for its PDH plant under construction at Kallo, Belgium, after slashing all ties with Italian-French joint venture IREM, a contractor based at Siracusa in Italy.

In late July, the polyolefins and fertilizer group suspended work on the facility, pointing to “serious allegations” against the Sicilian company, which has been under investigation by Belgian authorities.

The JV was charged with handling 80% of the construction on the project and also employed 80% of the around 1,200 on-site workers. Due to the retender, only a small part of the construction work can resume, Borealis said. This will cause a “substantial delay” in start-up of the plant, which had been scheduled for mid-2022.

The terminated contracts had been awarded for highly specialized piping and mechanical as well as electrical and instrumentation works.

The Vienna group pointed earlier to media reports of “alleged misconduct” that it said turned up during an ongoing inspection. Belgian authorities reportedly think the contractor may have committed multiple violations of the country’s labor laws.

According to one report, construction workers from the Philippines and Bangladesh were paid a monthly wage of only €650 for a six-day work week. In an early August statement, however, IREM denied any labor law violations. The company has not commented on the contract terminations.

To prevent a reoccurrence of such problems, Borealis has implemented what it calls “additional social controls” to ensure that the remaining contractors at the site are fully compliant with Belgian labor, social security and tax laws.

In future, each contractor or subcontractor, prior to beginning work, must sign a binding declaration prior confirming that they are fully compliant with the applicable laws and provide the names of all individuals working on the project.

Borealis said all contractors and sub-contractors are being “proactively briefed” and encouraged to make use of its ethics hotline. This tool. put in place in 2021, allows for ethics-related concerns to be filed in 24 languages.

Author: Dede Williams, Freelance Journalist