CH2M Hill to Pay $2.9M to Settle Alaska Hatchery Claims

June 11, 2013

The company that designed a new fish hatchery in Fairbanks has agreed to pay $2.9 million to settle the state’s claims over alleged flaws.

The Fairbanks Daily News-Miner reported that as part of the settlement reached in late May, the company, CH2M Hill Inc., also agreed to swallow as much as $2 million worth of extra work it said it performed on the hatchery.

The Ruth Burnett Sport Fish Hatchery had initially been scheduled to open in 2009, but because of construction delays and problems with its water filtration system designed to remove iron and manganese, it didn’t begin stocking lakes until recently.

The project ended up costing roughly $50 million – about twice as much as first anticipated.

The state leveled the blame at designer CH2M Hill and at the construction contractors Alaska Mechanical Inc.

The settlement releases CH2M Hill from all liability from currently identified flaws in its design, but leaves open the possibility for new claims if further defects are identified, said Senior Assistant Attorney General Dana Burke.

As part of the deal, CH2M Hill dismissed its claims for more money from the state for additional, uncompensated work it said it did on the hatchery. That work was estimated by the Department of Law to cost up to $2 million.

The settlement allows the state to avoid taking CH2M Hill to court, which could have cost as much as $750,000. The Legislature had gone as far as appropriating the money for such an outcome, but Gov. Sean Parnell vetoed it once the settlement had been reached.

The state, however, has paid out roughly $3.8 million to Alaska Mechanical for additional work needed to make the hatchery operational.

The hatchery, in downtown Fairbanks across the street from the Chena River, was designed to raise Arctic char, Arctic grayling, rainbow trout and chinook and coho salmon.

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