POSCO Engineering's Thai partner companies filed a civil complaint, asking for additional construction fees amounting to 3.4 billion won from the steel maker, according to news reports.
Some industry watchers said this may have erupted due to chronic practice of large companies' slashing their partners' prices. However, POSCO is sticking its position that the firm has rather suffered a loss due to the delay of the construction. One Thai media outlet reported that POSCO Engineering has not paid construction cost amounting to 3.4 billion won to 10 local partner companies mainly in charge of pipeline construction, machine and electrical installation.
One chief of the partner companies told the regional government, "POSCO Engineering has not paid the construction fee since July of last year," adding, "Thus, the companies employing many laborers have been suffering from the delay."
He also added, "Thai companies were also threatened by (POSCO Engineering)," calling for the government to investigate the issue as early as possible.
POSCO Engineering's official said, "The problem arose because the local companies misunderstood the contract terms," adding, "(The companies) first stopped the construction in fear of suffering a loss if they push ahead with the construction based on the contract terms. Currently, other companies are doing the construction work."
The official also said, "(POSCO) suffered a loss amounting to 7 billion won due to the suspension of the construction," adding, "As far as I know, the partner companies admitted that they misunderstood the contract term at the meeting where POSCO, the regional government and the partner companies were present."
POSCO Engineering is currently carrying out a large project in partnership with major petro chemistry companies such as PTT group and MOC.
