Chips supplier defaults on contract with OBPA

OGDENSBURG, Oct 07, 2009 (Watertown Daily Times - McClatchy-Tribune Information Services via COMTEX) -- GRGR | Quote | Chart | News | PowerRating -- A storage agreement between the Ogdensburg Bridge and Port Authority and a New York-based wood chips supplier that was finalized five months ago has fallen through over a breach of contract, OBPA officials said.

Green Energy Resources has defaulted on a contract with the authority signed in June by not providing required insurance and credit agreements, Executive Director Wade A. Davis told the OBPA board at its Tuesday meeting.

Green Energy Resources officials did not return phone calls seeking comment Tuesday.

The agreement was to handle and store the materials from June 3 until Dec. 3, but Joseph C. Murray, president of Green Energy Resources, said in the past that he hoped the project could bring at least 10 jobs and about $20 million to growers and truckers in the area.

"We're disappointed to see they didn't follow their contractual obligations," Mr. Davis said. He said this was the first agreement to default since he came to the authority in 2005.

Tensions between the authority and the wood chips supplier began in July, when the company asked the authority to purchase a piece of equipment for unloading cargo trailers that typically costs $100,000 to $300,000.

In August, after almost 530 tons of wood chips had arrived at the port, Mr. Davis sent a letter to the company asking for the public liability and property damage insurances and credit agreements that were required in the contract.

The chips were being stored at the port and Green Energy officials intended to ship them to biomass power plants and wood pellet manufacturers in northern Europe.

However, after not receiving the documents and discussing the issue with the authority attorney, Mr. Davis sent a letter to Mr. Murray last month stating the authority's intention to terminate the contract.

A subsequent letter asked the company to take away the materials, Mr. Davis said, but after the company refused, the OBPA decided to absorb the costs of removing the chips, which remain at the port.

Mr. Davis estimated the total cost to the authority for the failed project at about $800. He said the authority does not plan to sue the wood chip supplier at this time.

"We'll talk to counsel and see what's appropriate," he said. "This had potential to create jobs in the north country, but we wish them well."

Not all OBPA officials shared Mr. Davis's feelings Tuesday. Board member Mary M. Farley and President Frederick J. Carter agreed to notify other ports about their experience with the company.

"We should let other ports in the state know who this guy is," Mrs. Farley said. "It would have been nice if we had known if something like this happened somewhere else."

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