Business

Jury awards $62.4 million to subcontractor on southeastern Iowa fertilizer plant

Louisiana-based subcontractor said plant's main construction company failed to pay for mechanical work

This aerial image shows Iowa Fertilizer Co.’s fertilizer plant in Wever, Iowa. The plant officially opened for production on Wednesday April 19, 2017. (Iowa Fertilizer Co.)
This aerial image shows Iowa Fertilizer Co.’s fertilizer plant in Wever, Iowa. The plant officially opened for production on Wednesday April 19, 2017. (Iowa Fertilizer Co.)

A federal jury awarded $62.4 million in damages to a contractor that built part of Iowa Fertilizer Co.’s plant in southeastern Iowa after the contractor claimed the company failed to pay for labor for the most-incentivized project in the state’s history.

The decision, made last Friday in the U.S. Southern District of Iowa, requires construction company Orascom E&C USA Inc. to pay just under $51 million plus interest and damages to Louisiana-based contractor Maintenance Enterprises LLC for its work on the plant near Wever, eight miles north of Fort Madison.

Orascom E&C is the American subsidiary of the Orascom Construction, based in Cairo.

Iowa Fertilizer Co., a subsidiary of Dutch fertilizer producer OCI N.V., originally was named as a defendant, but later was dropped from the lawsuit.

Maintenance Enterprises filed suit in 2016, claiming Orascom failed to make several payments on time for mechanical subcontracting work before firing Maintenance Enterprises in late 2015 and refusing to allow its workers to retrieve tools and equipment left on site.

Jurors in the case also dismissed counterclaims by Orascom claiming Maintenance Enterprises failed to deliver work on time and charged non-reimbursable costs to its bills.

The Wever plant, which started production April 2017 after five years of construction, cost upward of $3 billion to build. The plant is expected to produce between 1.5 and 2 million tons of nitrogen fertilizer annually and support 200 full-time jobs.

The plant received more than $500 million in incentives, including more than $130 million in tax abatements from Lee County over 20 years, up to $107 million in tax credits from the Iowa Economic Development Authority and access to federal bonds that were estimated to take off $300 million from the cost of the building.

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Jesse Harris, a spokesperson for Orascom, said the contract amount with Maintenance Enterprises represented about one percent of the total work on the project, and the company is reviewing “what legal options are appropriate at this time.”

l Comments: (319) 398-8366; dan.mika@thegazette.com

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