Amec appeal refused over £94m costs on submarine job

Aaron Morby 7 years ago
Share

Amec’s legal battle to reduce the amount it must pay of a £93.6m cost overrun on a nuclear submarine jetty contract at Faslane has failed.

Now Amec and partners Morgan Sindall face a huge bill as they hammer out with the Ministry of Defence what proportion of cost overruns were properly incurred on the troubled project.

A costly legal battle has been running as both firms struggle to finish the Faslane SSN Berthing Project, first revealed in the Enquirer, more than four years late and at an expected final cost of £235.7m.

When the project was first awarded Amec was sole contractor for the jetty. But after Morgan Sindall acquired Amec’s construction arm for £26m back in 2007, the job became a 50:50 joint venture between the two firms.

Under the terms of the contract, the contractors are liable to pay the first £50m of overruns on the agreed maximum target price for the job, which has itself already risen from £89m to £142m.

This element was not challenged in the latest legal contest, but Amec held that the remaining £43.6m cost overrun should be split between client and contractor, with Amec due any costs howsoever incurred.

An arbitration panel rejected this saying the only costs payable were the actual costs reasonably and properly incurred within the contract.

A High Court judge has now refused Amec’s attempt to appeal this decision in a written ruling this week upholding the arbitration decision.

Latest news

Voice activated hard hats coming to sites

Alexa-style technology allows construction workers to ask for building plans
13 hours ago

Esh raids rivals to boost Yorkshire team

Commercial build and refurb division makes seven senior appointments
11 hours ago

Bellway launches two-year cost saving push

Procurement efficiency drive as margins peak
16 hours ago

Full steam ahead for Eden’s £17m hot rocks energy plan

Drilling to start next summer to make St Austell Biomes carbon positive
14 hours ago

J Murphy & Sons restates depth of losses

Pre-tax losses revised from £5.8m to £12.9m
1 day ago

Cadent Gas opens £740m work pipeline to new firms

Gas network specialist seeks four construction manager partners
16 hours ago

First project approved in £1bn East London estate rebuild

Rainham estate rebuild will kick-start '12 estates' regeneration plan
1 day ago

Crossrail air quality checks give Bond Street site all clear

Contractors carry-out extensive tests after worker and union fears
17 hours ago

Queen’s Speech confirms buildings safety regulator role

Post-Grenfell safety laws promise biggest regulatory reform to construction for 40 years
1 day ago

Construction output forecast downgraded over HS2 fears

Warehouse construction and renewable energy projects will be bright spots next year
1 day ago

Javid signs off £350m for Midlands hospital restart

Contract to be signed within weeks with Balfour Beatty
2 days ago

Native Land commits to £1bn London Bankside scheme

McGee wins first office core and basement deal at 1.4m sq ft riverside development
5 days ago

Contest for £500m decarbonisation framework

Fusion 21 launches hunt for heating and renewable specialists
2 days ago

Kier/Graham JV wins £17m Bassingbourn Barracks job

British Army's Mission Training and Mobilisation Centre is moving to Cambridgeshire
2 days ago

New A14 bypass to open a year early

Balfour Beatty/Costain/Skanska to open key section of A14 in December
2 days ago

Cleveland Bridge set to rebound to £50m revenue

Profit more than halved last year to £1.2m after project delays
2 days ago

£250m funding for museums and cultural projects

York's National Railway Museum wins £18.6m for new gallery space
2 days ago

Dust blunder during Bond Street air quality checks

Workers evacuated twice as alarm raised over silica dust levels at Crossrail station
5 days ago

Systra UK hires former Galliford Try Infrastructure boss

Nick Salt takes chief executive role at Systra UK
5 days ago

Main contracting lifts Reddington turnover to £539m

Profit rises to £31m despite £7m loss at McMullen Facades
5 days ago

Middlesbrough plans £250m trio of skyscrapers

Mayor unveils ambitious digital city plan for Boho district
5 days ago

Start signed off for £207m Edinburgh tram extension

Enabling work to start next month on extension to Newhaven
5 days ago

Willmott Dixon headlines another major heritage job

£27m revamp will return Stockton-on-Tees' Art Deco Globe Theatre to its former glory
5 days ago

Ardmore snaffles £460m Raffles hotel conversion

Record fixed-price deal to convert historic Whitehall building
6 days ago

Start date for £1.4bn London Gotham City offices

New investor buys stalled 40 Leadenhall Street Mace scheme
6 days ago

Pochin’s collapse hits subcontractors for £9m

Founding family directors Jim and Bob Nicholson injected £1.5m just before collapse
6 days ago

Keltbray rail piling to cut over 30 jobs

Scale-back blamed on lack of CP6 work and project delays
6 days ago

Southern Water re-signs Galliford Try for AMP7

Joint venture share of design and build frameworks worth £240m
6 days ago

U+I reveals green façade Greenwich resi towers plan

Morden Wharf aims to deliver around 1,500 new homes
6 days ago

Arcadis to pinpoint graphene uses in construction

Consultant commissioned to promote use of wonder material in construction
6 days ago

Contractor services