Kaiser Engineering Threatens $25,000,000 Suit on Dead Sea Project

The Kaiser Engineering Company, an American contracting firm engaged by the Dead Sea Works to build dikes for a massive potash evaporation system at the southern part of the Dead Sea, today named its arbitrator in its dispute with the Dead Sea Works over the specifications of the contract. He is Admiral Ben Morell, an American steel executive, The American firm has charged that the engineering specifications for the dikes on the Dead Sea “were impossible to attain.” The Dead Sea Works has not yet named its member on the three-man panel, which, according to the contract, will also include an Israeli judge.

Kaiser has filed a demand that the Dead Sea Works furnish “workable specifications” for the contract, or face a $25,000,000 suit for damages. The company contended that specifications for the core of the dikes were “completely theoretical.” It said that an independent panel of engineering scientists it had appointed to study the problem had reported that it was impossible to meet the specifications “in view of conditions existing at the Dead Sea, and the materials and methods specified in the agreement.” Kaiser argued that, for these reasons, its contract with the Dead Sea Works was “null and void.”

Y: Nishri, secretary of the Israeli company, declared that “at this time,” there was also no justification for Kaiser’s financial claims. He said that, before any further comment could be made, his company would first have to study the Kaiser report in detail “and consult our engineers and experts.”

Mr. Nishri also said that, under the terms of the contract, signed 17 months ago, the contractors were required to complete the job by October, 1965, and to pay 500 Israeli pounds ($160) in daily fines for delays. He said that Dutch experts consulted by the Israeli firm had reported that it was possible to meet the specifications. Under the contract, Kaiser is building dikes to turn the southern part of the Dead Sea into potash evaporation pens. The American firm said it had invested $25,000,000 in the project.