Arbitration panel in India rules favourably on Aecon extension of time claim

    - Counter claim for liquidated damages dismissed -

    TORONTO, June 13 /CNW/ - Aecon Group Inc. (TSX: ARE) announced today that
the arbitration panel considering the first of two major claims launched by
Aecon and its partner in respect of the Nathpa Jhakri hydroelectric project in
India has ruled substantially in Aecon's favour.
    The panel awarded Aecon and its partner in the Continental Foundation
Joint Venture (CFJV) full extension of time as well as related indirect costs
and interest resulting from project delays that the panel agreed were beyond
CFJV's control and contractual responsibility. In its ruling, the panel also
dismissed a counter-claim for liquidated damages filed against CFJV. Satluj
Jal Vidyut Nigam Limited, the government agency responsible for the project
and Aecon's client, has until October 12, 2008 to file a court appeal.
    The value of the award to CFJV, less amounts previously paid, is
approximately 512 million Indian Rupees (approx $12.0 million). Face value of
the claim was 1.39 billion Indian Rupees (approx $32.5 million). Aecon is a
45% partner in CFJV.
    A further claim of 2.26 billion Indian Rupees (approx $52.9 million)
remains with the arbitration panel and is also expected to be resolved this
    The Nathpa Jhakri project was a $500 million hydroelectric project in the
Himalayan Mountains of Northern India. Construction, which was substantially
completed in 2003, included a 200 ft high dam, a 16 km tunnel and the world's
largest underground desilting chambers. Construction of the facility began in
1993, and while the project was a significant engineering and construction
success, a number of natural disasters in the region delayed construction by
over five years. Other factors in the claim included geological conditions
that were significantly different than indicated in the bid documents, and the
lack of contractually promised transportation and communication services at
the site.
    "This award represents a major milestone in our efforts to wind up the
remaining issues on this landmark project and bring our profits home," said
John M. Beck, Chairman and CEO of Aecon Group. "We are pleased that, on
balance, the arbitration panel has to date taken Aecon's view of the key

    Aecon Group Inc. is Canada's largest publicly traded construction and
infrastructure development company. Aecon and its subsidiaries provide
services to private and public sector clients throughout Canada and
internationally. Aecon is pleased to be recognized as one of the 50 Best
Employers in Canada as published by Report on Business Magazine.

    The information in this news release includes certain forward-looking
statements. These statements are based upon assumptions that are subject to
significant risks and uncertainties which are discussed in greater detail in
the section entitled "Risk Factors and Uncertainties" in Management's
Discussion and Analysis of operating results and Financial Condition for the
year ended December 31, 2007 filed on SEDAR at Although Aecon
believes that the expectations reflected in forward-looking statements are
reasonable, it can give no assurance that the expectations of any
forward-looking statements will prove to be correct.

    %SEDAR: 00004778EF

For further information:

For further information: Mitch Patten, Vice President, Corporate
Affairs, Aecon Group Inc., (416) 297-2615,,

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