Amec appeal refused over £94m costs on submarine job

Aaron Morby 10 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

Ten demolition firms fined £60m for bid rigging

Full details of fines as Erith and Keltbray hit hardest
10 hours ago

20 firms win £4.5bn Southern construction framework

A dozen new firms secure spots on fifth generation public sector deal
13 hours ago

Call grows for bolder 18m second staircase rule for flats

Architects, surveyors and builders professional trade bodies demand lower height threshold than proposed 30m
12 hours ago

GRS Roadstone warns staff following cyber attack

Materials giant sends out letters highlighting the extent of the attack
13 hours ago

Inland Homes to suspend shares as results delayed again

Auditors need more time to go through embattled house builder's books
12 hours ago

Kier wins £73m Southport events centre job

Local supply chain set to benefit from major new project
13 hours ago

Multiplex profit rebounds as margin restored to 2.9%

London tower builder predicts return to revenue growth this year as major schemes advance
1 day ago

Upbeat Vistry to re-open mothballed offsite factory

Former Countryside timber panel factories rebranded Vistry Works in revived drive to deliver 5,000 units a year
1 day ago

Builder crushed and blinded in wall collapse

Property owner in court after barn conversion goes horribly wrong
1 day ago

Keltbray bags £140m haul of energy infrastructure work

Specialist secures trio of power frameworks, two battery storage facilities and an energy from waste package
1 day ago

Government awards £1.8bn for energy retrofit schemes – list

Housing and public building decarbonising funds awards to support 20,000 construction jobs
2 days ago

Landmark London scheme switches from flats to student rooms

Regal London rethinks Old Kent Road scheme with 900 student rooms and 220 affordable homes
2 days ago

Align reveals designs for final portal of HS2 tunnel

Contractor confirms how final key structure on project will look
2 days ago

Plans in for 1.4m sq ft of industrial space at Fiddlers Ferry

Peel NRE to appoint demolition contractors for coal-fired power station in weeks
2 days ago

Tilbury Douglas to replace hospital hit by weak concrete

Stoke-on-Trent outpatients building containing Reinforced Autoclaved Aerated Concrete to be replaced
2 days ago

Derby picked as destination for Great British Railways HQ

Public vote secures Derby's bid to be nerve centre of the rail industry
2 days ago

London tower over historic Leadenhall market approved

Building work to start in 2025 on 32-storey tower by historic city market
3 days ago

PfH starts race for £520m housing decarbonising deal

Four-year framework covers service specific lots from £5m to £100m
3 days ago

“Rock solid” balance sheet and record results for Henry Boot

Firm sees early signs of recovery this year in core markets
3 days ago

£200m Edinburgh Haymarket office and hotel approved

Haymarket Yards scheme to move to construction in 2024
3 days ago

Countryside closes deal for £80m build to rent homes

Deal with private rental developer Sigma to speed up delivery at two sites
3 days ago

Wates commercial director joins Caddick

Neil Trubshaw one of a string of appointments as contractor looks to expand across the north
3 days ago

Fusion21 names 16 winners for £125m painting framework

Latest deal will last four-years for public sector clients
3 days ago

Watkin Jones breaks ground on Cardiff 700 flats scheme

Largest build-to-rent scheme in Wales gets underway
4 days ago

Green light for Birmingham 540-bed student scheme

Work to start on Gough Street student tower this summer
4 days ago

Erith to transform former Ebbsfleet quarry

Joint venture with Henley Developments will see 6,250 new homes built in Kent
4 days ago

Morgan Sindall wins £44m Stevenage leisure hub job

Consolidation of town's sports facilities into one building will release land for 200 homes
4 days ago

Brickies back on the BBC for new series

Season two of popular programme following workers at Hodgkinson Builders
4 days ago

Subcontractors wanted across Newcastle

Latest Constructionline Meet the Buyer event: Register now
4 days ago

Green light for BBC’s £200m new Birmingham home

BAM Construction tipped for historic Typhoo Tea Building conversion
7 days ago

Contractor services