Wanzek Construction is laying off 666 contract workers who were building a solar-powered rail mill in Pueblo, Colorado.
Wanzek was building the mill for mining company EVRAZ and its contract employees were operating under the understanding that they would be employed only for this project.
However, a letter from Wanzek parent company MasTec Industrial said the company would close all operations permanently and terminate all employees effective January 3, with the project only 48% complete.
This development comes as MasTec and Wanzek face a lawsuit that alleges negligence and breaches of a contract worth more than $302 million.
One of the general allegations stated that Wanzek did not submit an acceptable proposed work schedule by the agreed deadline. According to EVRAZ, the company ultimately accepted what it described as an incomplete work schedule, which caused delays to the project.
Wanzek is also accused of not properly staffing the project and not training subcontractors, which contributed to delays and damages worth an estimated $130 million.
On the safety side, Wanzek allegedly did not comply with the contract’s programs and protocols. The lawsuit cited one example where crews uncovered an active waterline, which shut down the project for a week.
Another alleged safety violation involved a Wanzek hydraulic crane striking a live neutral line and barely avoiding a live 6,700-volt power line just 11 inches above the neutral line, which, if contacted, would have exposed the crane operator and spotters to possible electrocution.
Wanzek filed a counter-lawsuit and denied many of the allegations. However, the lawsuit accepts partial blame for staffing issues with project managers.
The counter-lawsuit also estimated that the project would now cost over $600 million and not be completed until early 2024.
According to a company statement on KOAA, EVRAZ North America said it plans to transition to a new general contractor to complete construction on the rail mill. Additionally, the company aims to retain many of the project’s current subcontractors.
Should the rail mill ever be completed, EVRAZ said it would run entirely on renewable energy and manufacture railroad segments in lengths only offered in Asian markets.