Murphy loses legal battle over delayed Beckton power plant

Aaron Morby 9 years ago
Share

J Murphy & Sons has lost its fight in the High Court to stop the client of its East London power plant project calling an on-demand bond in respect of a claim for liquidated damages of £8.27m.

Client and contractor are at loggerheads about cost overuns
Client and contractor are at loggerheads about cost overuns

The ruling ahead of attempts to settle claims is the latest blow for the contractor on its fat-fired combined heat and power project in Beckton.

The project, which is now in protracted commissioning and testing, is running nearly 15 months late,  with a handover date still to be agreed by Murphy and client Beckton Energy.

Murphy first revealed the cost of problems on the power plant scheme five months ago when it blamed much of an £16m operating loss in 2014 on the extra cost of building the combined heat and power plant.

The contractor said difficulties with design, cost escalation, supply chain and engine related technical breakdowns all had major impacts on the project.

At the time Murphy said it was reviewing its entitlement for recovery of sums, but had stuck to its policy of booking losses as they emerged.

The £70m engineer, procure and construct contract was awarded following a competitive tender three years ago and was due to be handed over in January 2015.

In the High Court, Murphy had asked the judge to rule whether client Beckton Energy could make a demand on the bond in respect of its claim for liquidated damages before the project engineer had made a determination on the amount of LDs due.

During the case its emerged that Murphy disputes Beckton’s entitlement to any liquidated damages, and claims to have suffered significant delays on the project and requested extensions of time, in particular in August 2014, February 2015, September 2015, November 2015 and December 2015.

Beckton Energy claims that extensions were not granted by the engineer because Murphy had not demonstrated that any event or circumstances gave rise to a claim for extension of time or payment.

The judge ruled the details of the main dispute were not pertinent to contract terms at issue and in a set-back for Murphy ruled that Beckton Energy was entitled to call  the on demand bond under the contract.

Latest news

Pension fund charges hit profits at Wates

Bottom line also hit by closing out construction contracts
5 hours ago

Construction worker dies on Essex site

Fatal accident at housing job run by Rose Builders
3 hours ago

Renamed Bovis Construction suffered £16m loss last year

Firm slumped into red before being sold to US group Atlas Holdings
9 hours ago

Plans in for £1bn Liverpool Street Station scheme

21-storey offices above station main concourse to help fund upgrade
10 hours ago

Project director leaves giant McAlpine car battery site

Change in site team at flagship £4bn Agratas factory
10 hours ago

Nexus Infrastructure orders up 11% at half-year

Tamdown housing civils arm orders up despite housing recovery delay
9 hours ago

Five firms win £450m Scottish electricity network upgrade

Major investment by Energy company SSEN Distribution
1 day ago

Private equity firm buys trio of marine construction specialists

Move will create a new national marine infrastructure group
9 hours ago

Firm wanted for £35m Royal Observatory revamp

Upgrade includes new pavilion and energy saving measures
23 hours ago

Wates wins £111m Victoria Tower restoration

Palace of Westminster's tallest tower overhaul will take six years
1 day ago

Cappagh Group founder passes away

Tom Ferncombe founded utility and infrastructure contractor in 1973
1 day ago

Mace tops contracts league with Euston Tower win

Contractor leads monthly work haul for second month running
1 day ago

Police hunt boss on the run after site manslaughter charge

Company director fails to turn up to court to face safety charges after site death
2 days ago

Glasgow civils firm buys building refurb specialist

M Squared buys EBS Construction in move to target £25m sales
1 day ago

Lynch plant hire fined £800,000 over abnormal load

Travelling excavator caught in police clampdown
1 day ago

Buyers flag fears over civil engineering slowdown

All sectors in reverse during "challenging" March
4 days ago

Police recover £100,000 of stolen plant at Harwich port

Polish man arrested on suspicion of handling stolen goods
1 day ago

Winners named for £380m Scottish council housing upkeep deal

PfH Scotland names 38 firms for social housing landlord deal
4 days ago

Torsion and Khalbros to build new Leeds £1bn neighbourhood

Eastgate Quarter site acquired from Hammerson
5 days ago

Kier wins first phase of £700m Warwick Uni campus build

Firm to start work on science and engineering precinct last this year
5 days ago

JCB to double size of US factory in wake of Trump tariffs

$500m Texas factory under construction to expand to 1m sq ft
5 days ago

Green light for £2.4bn Luton Airport expansion

Government go-ahead to transform airport
5 days ago

Mivan looks to boost supply chain network

Subcontractors and suppliers invited to meet the buyer event: Book places now
4 days ago

Diversification pays off for concrete frame specialist Statom

Strong results as £180m turnover firm expands into infrastructure sector
5 days ago

Cardo in talks to buy Breyer roofing arm

More than 100 jobs could be saved at Breyer Roofing
5 days ago

Quartet win £750m Wales & Western railway deal

Network Rail confirms partners for Reactive and Minor Works framework
5 days ago

Plans in for £350m London Bridge life sciences hub

Snowsfields Quarter will consist of three buildings containing labs
5 days ago

Surging labour costs push tender price forecast up

Pick-up in tender prices despite weak growth
5 days ago

Permasteelisa wins cladding deal on Multiplex city tower

Facade specialist wins work on Fenchurch Street ‘hanging gardens’ tower
5 days ago

Wates wins fit-out for Manchester First Street Hub

Smartspace arm secures another Government hub deal
6 days ago

Contractor services