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Boise Company Wins Bunker Hill Cleanup Deal Contract Is Show Of Support For Financially Troubled Morrison Knudsen From Staff And Wire Reports

Financially troubled Morrison Knudsen Corp. has won a contract for the opening phase of environmental cleanup work at the Silver Valley’s defunct Bunker Hill mine complex.

“Every contract is significant,” company President Robert Tinstman said after Monday’s announcement that the one-time construction and engineering giant will handle the first, $2.5 million phase of a project expected to cost as much as $115 million.

“This one is a part of the things that are very necessary as we clean up the mistakes of the past,” Tinstman said.

Along with the contract come assurances from officials that Silver Valley residents will get a share of employment and subcontracts.

The MK contract provides $2.5 million through the end of September for dismantling the zinc refinery and lead smelter that were at the core of the operation blamed for widespread environmental damage in the Kellogg area.

Tinstman said the second round of state and federal financing should total between $17 million and $28 million. It will focus on cleanup of toxic mine tailings in the area.

Corporate officials were optimistic that they could secure the entire environmental restoration project. Government officials say the work could total $115 million.

Gov. Phil Batt was at the announcement in a show of support for the 83-year-old Boisebased corporation. MK is now trying to work its way out of a sea of red ink left by the maneuverings of ousted Chairman William Agee.

“MK has been an extremely valuable member of Idaho’s business community,” Batt said.

People in the depressed Silver Valley would like to see the cleanup create good jobs in their towns as well.

While MK is an Idaho company, few in the Silver Valley would consider the Boise giant a local contractor.

MK’s contract likely will provide many Silver Valley contractors with some work, said Herb Solum, a liaison between the Silver Valley Economic Development Corp. and the cleanup project.

Solum developed a list of local contractors and the equipment they could provide for MK.

“Often times these big contractors will need roads paved, snow plowed or even just a Cat (Caterpillar tractor) for a few hours,” Solum said. “You don’t go to Coeur d’Alene for that, so we can get it for them right here.”

Local contractors complained about not having the chance to bid on the big federal contracts.

“Those high bonding and insurance requirements pretty much eliminates the small guys around here,” he said. “But I think there’ll be work for people around here from MK.”

The company - expected to announce $350 million in 1994 losses in the next several weeks - is trying to stave off seeking protection from creditors under federal bankruptcy laws by securing new capital.

If the company files for bankruptcy, the cleanup work still would be completed under receivership, officials said.


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