Hochtief ordered to pay out over £100m after tunnel collapse

Aaron Morby 8 months ago
Share

Power giant SSE has won an appeal court ruling over a compensation claim for £100m-plus from Hochtief following the collapse of a section of tunnel at the Glendoe hydroelectric scheme.

Glendoe hydroelectric scheme above Loch Ness required Hochtief to bore 5 miles of tunnel

Hochtief handed over the £127m scheme at the end of 2008 gaining a £2m bonus for achieving early completion, allowing the scheme to begin operating in January 2009.

Seven months later, the scheme ceased to generate electricity with SSE then discovering that rock material had fallen into the water supply tunnel over several months, leading to an almost complete blockage.

SSE took legal action against Hochtief claiming £130m in damages, but lost the case in the Commercial Court.

The energy company has now won its compensation claim on appeal.

Three senior judges decided by two-to-one that SSE should be awarded more than £107m plus 4% interest for each year since the claim was launched.

The tunnel section that collapsed lay in a geological area known as the Conagleann Fault Zone

SSE lost substantial amounts of revenue while the scheme was out of commission. After four months of  haggling with Hochtief about who should pay for the works, it called in BAM Nuttall.

Remedial works took much longer and cost far more than expected. The scheme did not begin to generate electricity again until August 2012.

In its defence Hochtief contended that it had completed the works in accordance with the contract, and that SSE had assumed the risk of the collapse at takeover.

Martin Pibworth, wholesale director at SSE plc, said: “SSE welcomes the positive decision of the Court of Session today concerning the tunnel collapse at our Glendoe Hydro Scheme near Fort Augustus.

“The hydro scheme had to be shut down for nearly three years whilst rectification works resulting from a defect, which existed prior to takeover of the scheme by SSE, were carried out.

Latest news

Balfour Beatty delivers 2-3% construction margin goal

Leo Quinn hits phase two target of Build to Last turnaround plan
20 hours ago

Firms admit price-fixing of concrete drainage products

Precast firms took part in cartel for seven years
2 days ago

£300m Edgbaston mixed-use scheme advances

Phase one office project edges closer at New Garden Square regen scheme
20 hours ago

All JCB staff get £1000 Christmas bonus

Over 7,000 staff earn biggest Christmas bonus in a decade
19 hours ago

Robertson appoints Morgan Sindall director

Scott Wilson is now Robertson's business development director
2 days ago

Beeston leisure centre out to bid

Bidding starts on cinema project in £30m shops and 130 homes scheme
2 days ago

Scape MD to head Perfect Circle consortium

Victoria Bambini to lead AECOM, Pick Everard and Gleeds joint venture
2 days ago

EastEnders set rebuild soars £27m over budget

NAO slams BBC for planning failures and procurement delays
2 days ago

Spurs stadium delays continue into New Year

Man Utd match will be played at Wembley next month as contractors work through Christmas
2 days ago

Speedy buys construction training business for £9m

Plant hirer buys Glasgow-based Geason in construction training push
2 days ago

Summer start for £25m Carlisle flood defence plan

Flood defence plan to be revealed three years after storm Desmond hit
2 days ago

Amco wins Dunbar railway station upgrade

Work to start next summer on new platform and footbridge
2 days ago

Architects win post-Brexit talent deal

Designers win concessions but construction still in skills turmoil
3 days ago

Boost your online presence – join the Enquirer Directory

New site for suppliers and buyers showcases products, services and latest stories
8 months ago

Essex contractor collapses after posting record results

Bolt and Heeks Ltd in administratron with 55 job losses
3 days ago

Science park starts contractor hunt for £12m office scheme

Construction work up for grabs on trio of buildings near Liverpool
3 days ago

Hitachi to pull out of £14bn Anglesey nuclear power plant

Hitachi plans for Anglesey nuclear power plant now in doubt
3 days ago

M&E specialist Ameon replaces Imtech on Graham site

Subcontractor steps in to keep project on track
3 days ago

Marshalls to buy rival concrete brick maker

Marshalls to buy Edenhall for up to £17m
3 days ago

Argent gets go-ahead for major Tottenham Hale revamp

Contractor hunt to start soon with construction set to start next summer
4 days ago

Drylining boss banned for tax dodging

Insolvency Service investigators uncover huge CIS and VAT payment discrepancies
4 days ago

£2bn Elephant & Castle shopping centre scheme final go-ahead

Demolition to start after London mayor nods through vast scheme
4 days ago

Modular building specialist goes into administration

Timber accommodation pod maker Carbon Dynamic runs out of cash on major contract
4 days ago

Structural engineer crushed under scaffold tubes

Housing giant and scaffold contractor fined a total of £180,000
4 days ago

Consultant MHBC merges with Cumming

City of London based firm now part of global giant
4 days ago

Crossrail delayed again as costs rise by another £2bn

Mayor attacks previous management team who insisted project was "on time and on budget"
5 days ago

Top housing association hires Lendlease resi chief

Richard Cook will lead Clarion Group's ambitious development plans
5 days ago

UK’s tallest Premier Inn plan in Docklands

Premier Inn books in at 30-storey mixed resi and hotel scheme
4 days ago

Kier wins £45m Cambridge schools campus phase one

Northstowe education campus includes a new 1,800 pupil secondary
4 days ago

Ian Lawson to advise McLaren on growth plans

Former Severfield and Kier boss becomes consultant at expanding contractor
5 days ago

Contractor services