Kier quits £170m London Ram Brewery job

Aaron Morby 5 months ago
Share

Kier has become the third contractor in a week to walk away from a major project after failing to agree a final contract sum with the client amid rampant cost inflation.

Ram Brewery site
Construction of the new river wall and basements are complete with work on the first three concrete cores now underway

The firm has been working on the £170m first phase of The Ram Quarter, a major flagship regeneration scheme in the London Borough of Wandsworth, since securing the project last summer.

At present it is completing enhanced enabling works on the site for Chinese developer Greenland, which aims to redevelop the old Young’s brewery site and build luxury flats over three phases.

Faced with spiralling cost inflation in the capital, Kier has struggled to get its price down, quoting just below £200m for phase one.

In an attempt to drive down costs further Shanghai-based developer and builder Greenland called on Kier to abandon its supply chain in favour of sourcing as much of the project as possible from China, according to project sources.

It is understood Greenland explored using Chinese suppliers for cladding, drylining and even kitchens and bathrooms.

But now after detailed consideration Kier has decided to walk away and is expected to leave the site in April.

The firm follows Morgan Sindall and Bouygues which have also decided to walk away from jobs for major blue chip clients at Cambridge University and Great Ormond Street Hospital respectively after contract negotiations faltered on price.

At the Ram Brewery, specialist contractor J Reddington is carrying out concrete works, which are now proceeding to forming three building cores for the housing element.

A source told the Enquirer: “It’s a real shame. Kier must have had around 50 personnel on the job. They were working hard to get a keen price because of the prospect of winning future high-rise phases.

“But they have clearly decided the risks are too high and it can’t be delivered to the client QS’s target cost.”

A Kier spokesperson said: “Client and contractor partners always have their own fixed points that cannot be breached in a moving market, but Greenland has been an excellent client to work with and we will support them until an alternative contractor is in place.”

A spokesperson for Greenland confirmed that Greenland and Kier had been unable to agree terms for ongoing work and Kier would now be concluding its involvement in the project in the coming months.

“We appreciate the work that Kier has done on The Ram Quarter project and we anticipate that works will be completed as scheduled with our new construction partner,” said Greenland.

The project has been complicated by section 106 agreements, which require that the old brewery is repaired and restored before flats can be occupied on the site.

Work has not advanced on this part of the project, which could cost up to £30m to complete.

dev11

Phase 1 is due for completion in early 2017

home11

Latest news

Construction alliance formed for light rail work

Places for Colas, Barhale, Thomas Vale and Auctus as Balfour Beatty misses out
1 hour ago

Green light for Laing O’Rourke Liverpool cancer hospital

Work to start in next few months on new Clatterbridge Cancer Centre
2 hours ago

Watkin Jones £100m east London student tower approved

Work to start on Stratford tower at the end of the year despite Brexit vote
1 hour ago

Kier wants suppliers for £50m of work near Hereford

Meet the Buyer event this Thursday: Register now
35 mins ago

G F Tomlinson scoops £15.9m Nottingham Uni job

Advanced manufacturing building will be constructed at the University's Jubilee Campus
16 hours ago

Kier wins bid race for £25m Mackintosh restoration

Kier beats rivals with "extremely competitive" bid for fire-damaged building
20 hours ago

Balfour Beatty chief’s wife buys £200,000 company shares

Quinn holding in construction group rises to 0.7%
1 day ago

Willmott Dixon abandons sale of support services arm

Contractor decides to keep division after bidders wanted to break-up maintenance operation
2 days ago

Firm fined £550,000 after two men fall to their deaths

Couple fell through Euston roadside hoarding into building site basement
1 day ago

Redrow reports buyers unbowed by Brexit

House builder expects strong year-end profits after completions rise 17% to nearly 5,000
1 day ago

HS2 phase one opening could be delayed a year

Spending watchdog warns HS2 timetable unrealistic despite good progress on procurement
1 day ago

Murphy finance chief becomes new Barhale CEO

Matthew Behan to lead contractor as new corporate structure established to broaden portfolio
2 days ago

£10,000 prize to cut roadwork disruption and delays

Amey and Staffordshire council seek smart digital solutions to roadwork traffic delays
1 day ago

Currie & Brown trumps WSP bid for Sweett Group

WSP raises prospect of a bid war as it tells Sweett shareholders to sit tight
2 days ago

Suppliers hit as HOC goes into administration

Redundancies at north London firm as subcontractors left in dark
2 days ago

Student digs developer shrugs off Brexit worries

Empiric confident EU vote will have limited impact on expanding sector
2 days ago

Brexit leaves Heathrow third runway in the air

Fears grow about the future of major infrastructure projects
2 days ago

Bid costs dent Hochtief UK profits

Operating margin drops to 0.7% as profit falls 45% to below £1m
2 days ago

Breakaway trade body formed by rebar producers

Independent rebar producers and suppliers split with BAR
2 days ago

Sinkhole closes busy stretch of A1

Contractors pumping huge hole with concrete in bid to reopen route
2 days ago

Lendlease to start £275m Hammersmith scheme

Construction to start next month on major office project
5 days ago

Contractors call for calm as Brexit victory spooks markets

Construction fears over costs, skills and investment as house builder shares crash
5 days ago

Shepherd Group suffers £74m hit from sold building arm

Strong profits at remaining Portakabin business help to cut group loss to £28m
5 days ago

Bidding set to start on £2bn East London cultural quarter

London Legacy Development Corporation set to procure shell and core work
5 days ago

Building worker critical after being crushed by JCB

Digger at Hebburn housing site believed to have reversed into worker
5 days ago

Plant test cheats website dodges closure threat

CITB chiefs battling to close down site undermining tests for machinery drivers
6 days ago

Green light for £18m Midland Metro extension

Preparatory utility diversion works to start immediately
6 days ago

Hill wins approval for £100m east London housing scheme

Work to start on Walthamstow triple towers this autumn
6 days ago

Construction workers win inflation busting pay rise

Deal agreed but unions warn pay agreement is "no longer fit for purpose"
6 days ago

Cameron resigns as exit vote sends markets crashing

New Prime Minister to be elected by October
5 days ago