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Published September 15, 2010, 08:56 PM

Central ND Coal Mine Reclamation Being Abandoned

BISMARCK, N.D. (AP) — A major coal mine land reclamation project in central North Dakota is being abandoned over a dispute about how much a contractor should be paid for doing the earth work, Public Service Commissioner Kevin Cramer said Wednesday.

Smith Contracting, of Butte, Mont., bid $1.22 million to reclaim about 150 acres of abandoned mine land in Ward County, about seven miles southwest of Velva, commission filings say. It is part of a larger area, covering about 1,100 acres, that must be reclaimed, commission documents say.

Commission staffers had estimated the job would cost $2.1 million. Cramer and Jim Deutsch, the director of the commission's reclamation program, said officials contacted Smith after the bids were opened to make sure it was correct. Of the nine companies that competed for the work, the next highest bid was $1.7 million, Deutsch said.

The contract, which was awarded in April, said the reclamation work had to be finished by mid-October. Deutsch said only about 40 percent of the job is done. He said the company intends to stop work in a few days because it is losing money. Smith Contracting recently asked to be paid almost $3 million for the project, but the request was refused, Deutsch said.

Smith Contracting and its attorney did not respond to telephone messages left for comment. Deutsch said no contractor has walked away from a North Dakota reclamation job in at least 30 years. The Velva project represented Smith Contracting's first reclamation work in North Dakota.

The job reclamation work involves filling in coal mining trenches and pits and smoothing out high walls of dirt left when huge trenches were dug to extract coal. The walls are covered with vegetation and pose a safety hazard. A hunter, or someone riding an all-terrain vehicle, could drive over a wall without realizing it was there and plummet 70 feet or more, Deutsch said.

The contract calls for moving 1.85 million cubic yards of dirt. In a memo to the commission, the company argued that the agency did not specify the meaning of "dirt" in its request for bids, and said soil that had been excavated and piled up during coal mining was much denser and harder to move than expected. Reclamation work has also been delayed by rain, the memo said.

Cramer said the commission was pondering its next steps. The company's bond insurer may be asked to finance the project's completion, Cramer said.

"The work that has been done to this point actually makes the public safer than they were prior to the project being started," he said. "A lot of the work has been done, a lot of the high walls have been smoothed out."

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