Amec appeal refused over £94m costs on submarine job

Aaron Morby 8 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

McAlpine £350m Deutsche Bank job delayed four months

Completion of landmark bank HQ pushed back again to March 2022
7 hours ago

Cladding shortages reach crisis point

Contractors told no new cladding supplies until January
14 hours ago

Fire hits eighth floor of major London refurb job

Twelve fire engines and 80 firefighters control blaze at Space House site
6 hours ago

Concrete batteries could allow buildings to store energy

Revolutionary technology could allow buildings to become giant batteries
14 hours ago

5% annual cost inflation to become new normal

Clients urged to start projects now to beat big cost rises
13 hours ago

Small nuclear reactor consortium refines design

Building costs to be cut to £1.8bn per plant using proven technology and factory manufacture
21 hours ago

Self-employed trade rates 20% up on a year ago

Midlands and eastern England wage rates highest in the country
11 hours ago

Watkin Jones steps up expansion into affordable homes

Build to rent and student rooms developer delivers robust half-year results
13 hours ago

Winners revealed on framework to build 3,200 new homes

Big name contractors bag places on major new later living deal
1 day ago

ISG makes a profit and stays debt free despite Covid

Pandemic cuts profits and turnover but order book now at record high
1 day ago

Vital Energi bags £7.3m mechanical package from Berkeley

Specialist working across four blocks of west London luxury scheme
1 day ago

120-tonne bridge beam falls onto Leeds highway

Concrete beam crushes transporter on Balfour replacement bridge job
3 days ago

Revamp jobs drive 20% recovery in London office work

Speculative new starts on the rise as developers start to bet on future of offices
2 days ago

Buckingham bags £55m Tyne and Wear Metro deal

Construction to start next year dualling rails along key sections
2 days ago

GMI wins £40m Leeds student rooms job

604-bed student accommodation project will rise to 15 storeys
2 days ago

Upbeat Vistry to exceed profit forecasts this year

Completions on track for 40% uplift to 6,500 homes as weekly sales rates jump
2 days ago

Kent contractor Coombs bought from administrators

Coombs name revived as building maintenance and retrofit specialist
2 days ago

Willmott Dixon picked for £32m Hounslow housing job

West London housing complex involves building over 100 homes in Feltham
2 days ago

Laing O’Rourke signs £600m London Olympia contract

Demolition to start on main central hall after a year of enabling works
5 days ago

Taylor Woodrow to build London to Southampton pipeline

Main construction work to start next year on new 90km aviation fuel pipeline
5 days ago

Paul John Construction (Leicester) in administration

Insolvency specialist FRP Advisory takes over at Coalville-based civils firm
5 days ago

Bid race for £70m job to restore disused Portishead rail line

Project involves 5.5km of new railway between Pill and Portishead
5 days ago

Shareholders invest £5m in McLaren growth push

Contractor plans expansion in core sectors
5 days ago

McAlpine losses hit £26.8m

Contractor reveals impact of Covid on finances
5 days ago

Morgan Sindall wins £28m Dawlish rockfall shelter

Work to start in August on key stretch of South West coastal railway
5 days ago

Redrow go-ahead for 1,200 homes in North London

Third phase of Colindale Gardens will consist of five large clustered blocks of flats
5 days ago

Kier launches £241m fund raise to pay down debt

Contractor hopes to achieve net cash in two to three years
6 days ago

HS2 hits historic milestone as first TBM launches

TBM will dig 10 miles of tunnel under the Chilterns, operating 24/7 for the next three years
6 days ago

Winchmore wins £2m brickwork package from Wates

Specialist lands latest deal as it ramps-up training and apprenticeships programme
5 days ago

Balfour upbeat as new chairman confirmed

Positive trading statement as former ITV chief Lord Allen appointed
6 days ago

Contractor services