The construction company responsible for building a wind turbine for the town of Hanover will be hit with hefty fines for repeated delays in the project, town officials say.
“We continue to be frustrated with the performance of the company hired to construct this turbine,” Hanover Town Manager Troy Clarkson said of Wilmington-based Lumus Construction. “They are woefully behind schedule.”
The project was supposed to be completed by late January 2011. The contract, signed in July 2010, allows the town to fine Lumus Construction up to $1,000 a day for delays, meaning the fines could be in excess of $500,000 by now.
“It’s my understanding, though, that the courts sometimes limit liquidated damages to true damages, which include things like legal costs, administrative costs, lost revenue from the project not being completed, among other things,” said Victor Diniak, director of Hanover’s Department of Public Works. “So I can’t say what the actual cost will be.”
Town Meeting voters in 2009 approved up to $1 million for the turbine. The contract award was for $768,500, but with a state grant, local taxpayers are paying less than half that amount. Clarkson said that to date the town has held back roughly $100,000 in payments to Lumus because of delays.
“We notified their bonding agent,” he said. “Lumus is well aware of our displeasure.”
Several calls to the company and to the home of its owner, Sumul Shah, were not returned.
The turbine was erected on Pond Street, off Route 53 behind the DPW building, on July 15, 2012, following numerous delays due to funding, shipping, and construction issues. Since then, there have been “chronic problems” with the installation, said Diniak.
He said that representatives from Siva, the India-based manufacturing company that made the structure, are expected to come to Hanover in the next couple of weeks to work with Lumus and Element Energy Works, the Hood River, Ore., company assisting Lumus, to help fix the problems with the turbine.
“I’m told that the issue they’ve been having is with the tank that facilitates the flow of oil into the hydraulic system. They think there’s a defect with the tank,” Diniak said. “A new tank arrived yesterday, so we’ll see if that’s what it is.”
“You have to remember,” he added, “a big part of the problem is that this thing is 150 feet up in the air.”
But once completed, the turbine will “significantly” reduce energy costs at the Pond Street Water Treatment Plant, saving the town between $60,000 and $75,000 annually, he said.
Diniak said he does not want to speculate on when the turbine will be working, since there have been so many setbacks. “We are hopeful and confident that the matter will be resolved and the unit will be productive for the town of Hanover,” he said.
Clarkson said that he, too, is hesitant to target a date for the turbine to be fully functional.
“It has run for certain periods during test phases, but then there is a problem,” he said. “Hopefully, when the manufacturer gets here in the next couple of weeks, the problems will be fixed and the turbine will finally be up and running.”