Brown & Root Inc. of Houston announced yesterday that it agreed to pay three utilities and the city of Austin $750 million -- reportedly the largest cash legal settlement in U.S. history -- to settle a suit over construction of the South Texas Nuclear Project.
Officials hailed the settlement as a move to make the project, now expected to cost five times its original estimate, finally viable for ratepayers. The utilities and Austin, which operates that city's electrical service, charged in a $6.3 billion breach-of-contract suit that construction of the plant was mishandled by Brown & Root. The owners fired Brown & Root, which had no experience as a nuclear contractor when the project began, as design engineer at the project in 1981; the company then resigned as construction contractor.
Under the agreement Brown & Root, a Houston-based construction company and subsidiary of Dallas-based Halliburton Co., will pay $630 million to Houston Lighting & Power, San Antonio City Public Service and Central Power and Light of Corpus Christi. The city of Austin, the fourth owner in the project, has not decided yet whether it will accept its $120 million share of the settlement. If it rejects its $120 million, Halliburton said it intended to "defend the litigation vigorously."