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

Greswolde Construction goes under

Solihull contractors ceases trading with 24 jobs lost
2 days ago

Designs revealed for £1bn London Blackfriars tower blocks

Fosters design landmark green office skyscraper and two blocks of flats for Southwark site
2 days ago

Everton stadium job still on budget despite inflation

Club and Laing O'Rourke confident they can still build new ground for £500m
2 days ago

Construction output falls 1.4% halting 7-month growth spurt

Fresh output and orders figures confirm summer construction slowdown
2 days ago

McLaren gets green light for £85m build-to-rent scheme

Construction set to start this autumn on major city centre development
2 days ago

BAM limbers up for £25m Bedworth leisure centre

Pioneering Warwickshire health and fitness hub to start this autumn
2 days ago

Keepmoat to start four-year build in Wigan

Major regeneration scheme to start across four sites
2 days ago

Solihull contractor Greswolde heading for administration

New investors took over business 12 months ago
3 days ago

Duo win £500m canal and river main works deal

Kier and Bentley bag Canal & Rivers Trust's largest ever water engineering works deal
4 days ago

Construction Manager of the Year finalists revealed

70 of the industry's brightest talents: Full list
3 days ago

Willmott Dixon fills new strategic change director role

Vistry Group change director joins private builder to support future growth
3 days ago

Work starts on £42m Oldham Spindles overhaul

Willmott Dixon signs off £42m deal to create new market, offices and event space
3 days ago

Firms wanted for Telford & Wrekin £1.6bn building works DPS

Call up for dynamic purchasing system covering building and refurbishment work
3 days ago

Kier pulls off contracts league double in July

Contractor bags highest value of new work and tops rolling 12 months ranking
4 days ago

Hinkley Point C giant water intakes craned onto seabed

Video: contractors complete one of the world’s most complex marine engineering projects
4 days ago

Taziker revenue jumps 30% to record £73m

Multi-disciplinary engineering specialist boosts headcount to 366 staff
4 days ago

Consultant buys scaffolding contractor

RSK Group makes MG Scaffolding its latest acquisition
4 days ago

M&E specialist gears up for £16m Aston Martin package

Major package award on McLaren Silverstone site
4 days ago

Plans in for Brentford 110-flat canalside scheme

Makers’ Yard mixed commercial and residential use scheme
4 days ago

WSP to buy consultant RPS Group for £591m

5,000 staff at Oxfordshire based firm to join WSP
5 days ago

Countryside puts offsite factory up for sale

Offers invited for Bardon plant which is less than a year old
5 days ago

M&E specialist Spie UK arm returns to profit

French parent group launches a strategic review of UK operations after performance stabilises
5 days ago

Site boss fined for locking out safety inspectors

Police called to enter site before fire fighters rescue workers stranded on roof
5 days ago

Rebid starts for £200m M5 junction job

Cost inflation forces retender for £200m junction 10 rebuild near Cheltenham
5 days ago

New Downing Construction boss named

Andy Thomas takes top job as Ian Orton steps back after 24 years
5 days ago

Plans in for 600 homes at London Aylesbury estate

Notting Hill Genesis aims to start work next year on phase 2 of Southwark estate rebuild
5 days ago

Tide gets green light for UK’s tallest modular tower

Volumetric specialist to build 48-storey student skyscraper at Canary Wharf
1 week ago

TopHat cuts losses and aims for profit in three years

Modular specialist investing for future as latest results show £19.4m loss
6 days ago

Story Contracting names next chief executive

Andy Joy to be promoted to CEO as Jason Butterwork becomes vice chairman
6 days ago

Stalled £100m North London build-to-rent tower to start

Essential Living commits to start Swiss Cottage scheme six years after planning OK'd
7 days ago

Contractor services