TOKYO (Reuters) - Hitachi Ltd (6501.T) on Wednesday said it has received a request from Mitsubishi Heavy Industries Ltd (MHI) (7011.T) for 89.7 billion rand ($6.65 billion) to cover costs from their joint venture’s involvement in a South African power plant project.
Hitachi in a statement said it rejected the request as lacking legal ground, and that it would continue talks with Mitsubishi Heavy.
An MHI spokesman confirmed the request and that talks were ongoing.
The amount is almost double an initial request MHI made at the beginning of a 10-month-old dispute over which of the Japanese firms should bear costs from the power plant project.
Hitachi won a contract to build 12 boilers for the Medupi and Kusile power plants of South African utility Eskom [ESCJ.UL] in 2007. It later transferred the contract to a joint venture with MHI.
The venture, Mitsubishi Hitachi Power Systems Ltd, is majority owned by MHI and was formed in February 2014 by combining the two companies’ thermal power generation businesses.
But Hitachi and MHI fell out after being unable to agree on whether certain costs were incurred before or after the creation of the venture, a regulatory filing showed.
Mitsubishi Heavy initially requested 48.2 billion rand at the end of March last year, a request Hitachi declined.
($1 = 13.4933 rand)
Reporting by Taiga Uranaka; Editing by Christopher Cushing