Murphy loses legal battle over delayed Beckton power plant

Aaron Morby 6 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

Pagabo names £1.6bn civils framework winners

Forty eight firms secure spots on new civils and infrastructure framework
2 days ago

£1.25bn Stonehenge tunnel job winner revealed

Spanish, Italian, and Austrian JV scoops A303 Amesbury to Berwick Down scheme
2 days ago

Altrad swoops for Doosan Babcock

Over 4,000 staff will transfer to the fast-expanding industrial services group
1 day ago

Suspended jail sentences after fatal roof fall

Court sentences two men after hearing of safety failures on over-cladding job
2 days ago

McAleer & Rushe on track for record £425m revenue

Revenue and profit return to pre-pandemic level as focus grows on high-rise flats
2 days ago

Domis on the hunt for subcontractors and suppliers across Cornwall

Contractor hosting meet the buyer event to set-up local supply chain for string of major projects
2 days ago

Lendlease £140m hospital claim to hit High Court

Cramlington hospital trust claims for new temporary building while remediation works carried out
2 days ago

Balfour bags £50m Piccadilly Line upgrade

First award under latest London Underground High Voltage Power framework
2 days ago

Cash runs out on HS2 old Curzon Street station refurb

Laing O'Rourke/Murphy JV halts work on historic station renovation
3 days ago

MPs call for cut in building demolitions to save carbon

Watchdog MPs set out urgent plan to prioritise retrofit and reuse of buildings over new build
2 days ago

Structure Tone stems losses as order book grows

Fit out specialist racks-up £4m loss but is confident of turnaround this year after restructuring
3 days ago

Construction leaders launch inflation busting taskforce

All sides of industry urged to work together rather than row over price hikes
3 days ago

HG Construction names next chief executive

Adam Quinn, son of one of the MBO founders, to take the reins in July
3 days ago

Lendlease Stratford IQL blue towers approved

35- and 14-storey hexagonal blocks will provide 350 flats
3 days ago

Track worker killed by train was controller of site safety

Distracted rail worker "lost awareness of his position relative to the line the train approached on"
3 days ago

MechFS went down owing £9.5m to supply chain

Subcontractors left holding millions in worthless invoices
4 days ago

HG Construction profit jumps 50% to £25m

Multi-storey homes and student accommodation jobs drive sales to record £243m
4 days ago

Go-ahead for Newcastle’s largest build to rent project

Work to start on 14-storey flats complex in the autumn
4 days ago

Contractors wanted for £288m Northumbrian Water frameworks

Ten lots up for grabs under latest major civils deal
4 days ago

Plans in for 142-room Exeter net zero hotel

RED Construction to build first of hotel developer's planned chain of net zero hotels
3 days ago

Rail workers vote to strike over maintenance job cuts fears

Network could grind to a halt next month
4 days ago

Race for £100m Immingham ferry terminal job

AB Ports aims to start work in mid 2023
4 days ago

Sisk wins Stockport £60m Weir Mill restoration

Work to start next month on 250 flats scheme
5 days ago

Developer swoops for 1,000-flats landmark Leeds site

Revised plans to be submitted by the end of the year for start soon after
5 days ago

Dominvs seals £173m funding for 713-bed student job

HG Construction to start major Hammersmith student complex in November
5 days ago

Briefings start for £1bn Midland Mainline Electrification plan

Market engagement starts for next seven sections covering 139km route to Sheffield
5 days ago

Forterra pushes back £27m factory refurb plan

Supply chain shortages hit project as brick prices rose another 12% last month
5 days ago

Speedy Hire results slowed down by KPMG

Hire giant left "frustrated and disappointed" by delay request from auditor
5 days ago

London office starts set to surge over next 6 months

Deloitte Crane Survey predicts jump in starts in Capital despite high building costs
6 days ago

Fit-out firm BW Workplace slips into the red

£5.2m backdated R&D tax credit deal lifts after tax performance
6 days ago

Contractor services