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

Wates resumes full pay for all staff not on furlough

Chief praises staff for great professionalism in the most challenging of condition
1 day ago

Canary Wharf Contractors could cut 100 jobs

Another round of redundancies as projects come to an end with no replacements in pipeline
1 day ago

Tower crane lifts end long climb to work for operators

Laing O'Rourke trials mast climbing lifts for tower crane operators at London site
1 day ago

Government agrees £30m bailout for rebar giant

Emergency loan to Celsa secures rebar supplies to construction
1 day ago

Plans go in for 2,200-home Oxfordshire garden village

Sustainable scheme will also include new schools and manufacturing space
2 days ago

Winvic raids Graham Construction for civils boss

Rob Cook joins as civils and infrastructure director at Winvic
2 days ago

HS2 rebids £300m overhead power system

Bidding starts for first overhead lines powering trains to operate at 360km/h
2 days ago

Work with the Enquirer to help your post Covid recovery

Promote your business now to grab a bigger market share as construction bounces back
2 weeks ago

Sisk seals £150m Santander campus in Milton Keynes

Biggest building contract signed off during restricted covid working
2 days ago

Keep the industry updated by joining the Enquirer Directory

Membership lets construction know you are open for business now or in the future
2 years ago

Builder wanted for £35m Forth Bridge tourist attraction

Contract to build bridge walkways and viewing platforms to be awarded before the end of 2020
2 days ago

JCB powers up first hydrogen fuelled digger

JCB in race to lead the world on hydrogen-powered plant
3 days ago

Construction site death rates on the rise

Latest HSE figures show 40 construction fatalities last year
3 days ago

Construction firms urged to claim millions in tax rebates

Research and development tax credits available - find out if you can claim
2 days ago

Plans in for £150m South Kensington Tube station scheme

Native Land and TfL advance scheme to revamp west London Underground station site
2 days ago

Hotel plan for Lincoln department store aproved

Town centre House of Fraser will be demolished for a 150-room hotel
1 day ago

Site canteens to re-open under latest guidelines

Latest Site Operating Procedures guidance allows limited 1m-plus distancing with risk reduction measures
3 days ago

Kier eyes rights issue as debt rises to £440m

Debt rises again as Kier feels impact of Covid-19
3 days ago

Willmott Dixon unveils plan for 5% staff cut

Private builder seeks voluntary redundancies as revenue set to drop 20%
3 days ago

HS2 contest for £500m tunnel and lineside M&E works

Major contract for phase one and 2a will be let as a target cost contract
4 days ago

Boris clears planning red tape on change of use to housing

Town centre buildings to be converted without planning to save the high street
4 days ago

Morgan Sindall to start £65m Salford Uni project

Work to start within weeks on Science, Engineering and Environmental Building
3 days ago

Cundall latest consultant to cut jobs

Redundancy consultation starts with 6% of staff at risk
3 days ago

Eight major contractors rally to tackle climate change

BAM, CWC, Morgan Sindall, Multiplex, SRM, Skanska and Willmott Dixon declare net zero carbon pledge
4 days ago

Road worker hit by flying metal from HGV

Construction materials most frequently dropped on motorways
4 days ago

Redrow to scale back London construction work

Focus shifts to regions as buyers want more space after pandemic
4 days ago

Scottish contractor Robertson plans redundancies

Annual pay increases deferred for a year as job cuts loom
4 days ago

Modular specialist ilke Homes to cut staff numbers

Business was handed a £30m loan by Homes England last November
5 days ago

Boris ‘new deal’ injects £5bn to speed-up infrastructure

Prime Minister promises to build, build, build with national renewal plan
4 days ago

Start date for £19m Nottinghamshire blue light HQ

Henry Brothers to start work next month after signing a deal yesterday
4 days ago

Contractor services