Taipei-The Coast Guard Administration (CGA) has terminated a contract with Ching Fu Shipbuilding Co. (CFS) after the company failed to meet a Nov. 26 deadline for delivery of the 14th of 28 patrol boats it had been contracted to build, the agency said Sunday.
The end of the patrol boat deal is just the latest blow to the financially troubled company, which is currently under investigation for alleged fraud in securing a NT$20.5 billion syndicated loan to finance a separate NT$35.85 billion (US$1.20 billion) contract to build six minesweepers.
Ching Fu won a CGA tender to build 28 100-ton patrol boats on May 30, 2013 and has completed and delivered 13 boats so far. But it has been unable to deliver the 14th boat.
It was originally scheduled to be delivered on April 30, but the company asked for an extension to Aug. 28 due to account for work days lost to wind disasters and typhoons and to new five-day workweek rules that reduced available manpower.
The CGA said Sunday it was within its rights to end the deal because of a provision in the contract allowing its termination if the contractor failed to make a delivery 90 days past an extended deadline, according to Hsieh Ching-chin (???), the deputy head of the CGA's Maritime Patrol Directorate General.
Sunday represented 90 days from the previously agreed Aug. 28 deadline.
Because maritime law enforcement agencies need the boats quickly to enhance their law enforcement capabilities, the CGA decided to terminate the contract with CFS, effective immediately, based on the contract's terms, the Maritime Patrol Directorate General said.
The CGA has informed CFS of its decision in writing and has listed it as a bad contractor, it said, adding that it will also not return CFS's security deposit to the company.
In addition, the CGA will invite interested suppliers to submit bids for the remaining 15 boats that CFS failed to complete and will demand NT$1.2 billion in compensation from the shipbuilder for all of its losses.
In response, CFS spokesman Chi Ching-lung (???) said the company "has no comment."
Source: Focus Taiwan News Channel