Plant over budget, behind schedule

Plant over budget, behind schedule

By TIM MITCHELL/The News-Gazette

and NICOLE ANDERSON COBB and LOIS YOKSOULIAN / CU-CitizenAccess.org

TUSCOLA — In October 2014, state and local officials and Cronus Chemicals CEO Erzin Atac donned hard hats in an empty farm field to announce a deal to bring a $1.4 billion nitrogen-fertilizer plant to central Illinois.

Atac said he hoped to break ground in 2015 in Tuscola, with plans to complete the plant by early 2017.

But this spring, Cronus quietly announced on its website that the estimated cost is now $1.9 billion, more than 30 percent above the original estimate, and that the plant will not be finished until the last quarter of 2019 — at least 30 months later than the initial estimate.

Tuscola Mayor Dan Kleiss had a feeling this might happen when construction didn't begin on time.

"When that happens, everything in the timeline gets backed up," Kleiss said Thursday. "But I personally wish they had already started the project."

Kleiss said he met with members of Cronus' leadership team last week in Tuscola.

"They were holding meetings with their labor people and general contractors," Kleiss said. "We're still hoping that Cronus can get the deal done. A project that costs upwards of a billion dollars will be good for the city and for the state of Illinois."

Kleiss said he remains "positive" about the plant's prospects, saying this experience is entirely different from the city's failed bid to land a $1 billion-plus FutureGen plant in 2007.

"FutureGen was somebody spending government money," he said. "Cronus is a private company spending its own money."

Brian Moody, executive director of the Tuscola Chamber and Tuscola Economic Development, acknowledged Thursday that the Cronus project's costs have increased and the completion date has been delayed.

Moody said he spoke with Atac last week about the holdup. The CEO plans to revisit Tuscola near the end of June, Moody said.

"A few things have delayed them, mostly involving planning and working with contractors," Moody said. "They have been trying to negotiate the final deal for the past few months.

"It has taken Cronus a lot longer to get to where they need to be. I have learned that isn't unusual for projects of this size and scope. There are a lot of moving parts and things to put together."

Moody said he believes that "Cronus is absolutely committed to making this happen and is on track to do that."

Not everyone in the area is as certain about a project that's billed to bring up to 2,000 construction jobs, 200 permanent jobs, and millions in wastewater sales from the Urbana and Champaign Sanitary District to East Central Illinois.

"We lived through FutureGen. We know better than to count our chickens before they are hatched," said Douglas County Board Chairman Don Munson.

But this delay "means nothing," Munson said, "and here's the reason: We welcome any development, but we have not spent anything other than some time in allowing our highway engineer to be more than helpful to the Cronus people."

Munson said the county has been in contact with the principal developers of the project. He said they reassured him that they're "working through their problems," which mostly involve the project's prime contractor.

"It boggles my mind what a $2 billion project is," Munson said. "There are so many things that have to get tied down, and they are trying to get those details tied down."

Cronus officials, who could not be reached for comment, announced previously a deal was struck in February with Tecnimont and KBR Inc. to be the general contractors on the project. The global contracting and construction firms signed a joint venture agreement for the engineering, procurement and construction of the plant, according to Tecnimont's parent company, Maire Tecnimont.

CU-CitizenAccess' Karyna Rodriguez contributed to this report.

CU-CitizenAccess.org operates under the Department of Journalism at the University of Illinois and focuses on local investigative reporting, with an emphasis on social, justice and economic issues. The project began with funding from the Marajen Stevick Foundation and the UI and a matching grant from the John S. Knight and James L. Knight Foundation.

 

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