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Raytheon Resumes Work on Gas-Fired Power Plants

WEYMOUTH, MA-A week after work was halted on two gas-fired power plants here and in Everett, a judge orders Sithe Electric to cancel its construction contract with Washington Group International, forcing locally-based Raytheon to take over.

By Naomi Grossman | Updated on March 19, 2001

WEYMOUTH, MA-A week ago work stopped on the construction of the gas-fired power plants here and in Everett, MA because of a dispute between Washington Group International and Raytheon Co. Now a judge has ordered New York-based Sithe Electric, a developer and operator of power plants, to cancel its construction contract with Washington Group, forcing Raytheon to take over.

The Boise, Idaho-based Washington Group took over construction of the plants–a 1,600 megawatt plant and an 800 megawatt plant–when it purchased Raytheon’s construction and engineering division last July. However, the company recently developed a cash flow problem and it halted work on the plants in an effort to avoid bankruptcy.

“Pursuant to guarantees to Sithe, we’re now taking on an oversite role,” David Polk, spokesperson for Lexington, MA-based Raytheon, tells GlobeSt.com. When Washington Group bought Raytheon’s engineering and construction division an agreement was reached–after what Polk calls “an almost unprecendented time in due diligence”–that Raytheon would maintain financial responsibility for some projects and project guarantees to others. These two plants have project guarantees.

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