OHLA has begun legal proceedings to terminate one of its largest projects in the United States. The group headed by Luis Amodio, through its North American subsidiary Judlau Contracting, has filed a lawsuit against the Illinois Tollway Authority for a decision, in its opinion unfair, to terminate the contract it had formally awarded at the beginning of the year for the reconstruction of a section of the Tri-State Highway (I-294).
New York-based Judlau took over the job after submitting an economic proposal of $323.8 million (305.7 million euros at the exchange rate at the time). Thus, it beat the offer of local firm Walsh, which amounted to about $327 million. This company had resorted to hiring an OHLA subsidiary, but Was dismissed.
However, after signing the award, the Illinois Tollway reviewed the process and decided to prematurely apply a rule that, in the opinion of the OHLA subsidiary, benefits local companies, so it declared the competition void. This regulation, which was approved in December 2023, provides a discount of 4% on the price of contracts exceeding 100,000 euros for companies in Illinois. Thus, the offer to Walsh, based in this state, would have been 314 million dollars, Thus Judlau was reformed.
The Illinois Tollway served Judlau with a notice of contract termination on May 16. By then, the construction company had begun work, invested in the acquisition of materials and hired workers. The company filed suit in state court in Wheaton seeking damages and a declaration that the client (the Illinois Tollway) had wrongfully terminated the contract. There was no reference to the aforementioned 4% cut in the tender document.
The complaint has crippled the project, as the judge in the case ruled that the Illinois Turnpike Authority You will not be able to hire another construction company until this is resolved. In June, the body expressed its intention to award the work to Walsh. The contract involves the reconstruction of a section of the Tri-State Tollway (I-294) southbound at the I-290/I-88 interchange. It involves demolition and excavation work, the construction of 13 new steel girder and precast concrete bridges, and the removal of pavement and the installation of new concrete for about four kilometers of road and shoulders.
This was the 21st contract obtained by OHLA for the Illinois Tollway since it began its activity in the Midwest of the United States in 2014. In fact, a large part of it corresponds to various works on the Tri-State Tollway. With a cost of more than 300 million, this project, in addition, Emerges as the third largest in the Spanish group’s portfolio worldwide
behind only the Purple Line light rail in Maryland (770 million), and improving accessibility to 13 New York subway stations (528 million).
Although it is a relevant task, the impact on the entire OHLA portfolio is limited, as it is close to 8.5 billion euros. The group, which continues to negotiate with investors for a capital increase, has been awarded tasks of 4.5 billion in 2023, with the United States leading, and It is expected to reach 3.5 billion by 2024.