黑洞社区

The chief executive of Balfour Beatty has said his firm is chasing the client on the Aberdeen road scheme in Scotland for 鈥渉undreds of millions鈥� of pounds in compensation after revealing the job cost more than 拢1bn to build.

The eye-watering amount comes after the 58km long bypass was finally fully opened in February 鈥� more than a year late.

It was mired in a series of problems caused by issues such as bad weather and the cost of carrying out utility diversions.

Balfour Beatty signed the deal in December 2014 鈥� just a few weeks before then new chief executive Leo Quinn arrived at the business 鈥� along with joint venture partners Carillion and Galliford Try.

Quinn (pictured) said the firm had until the end of the year to come to a negotiated agreement with Transport Scotland 鈥� or formally begin legal action.

He said the joint venture was due 鈥渉undreds of millions鈥� and added: 鈥淭he job was sold for 拢530m but has cost over 拢1bn to deliver.鈥� He said the joint venture had been forced to shoulder around 拢500m in extra costs.

In its interim results yesterday, Balfour Beatty said the 鈥渇inal financial out-turn of this contract remains dependent upon the result of ongoing claims discussions鈥�.

The job has caused huge financial damage to the firms involved with Carillion going bust last year, in part blaming problems on the road for its demise, while the costs of completing it and another problem job, the Queensferry Crossing, saw Galliford Try launch a rights issue last March to raise close to 拢160m.

The firm has since embarked on a cost-cutting drive which saw 350 jobs go earlier this year after disclosing more losses on the Aberdeen and Queensferry jobs.

But commenting on the Galliford Try job cuts, a Scottish government spokesperson told 黑洞社区 in May: 鈥淲e are not prepared for the public purse to pick up cost overruns incurred by contractors.鈥�

Quinn said the Aberdeen job was just one of a handful of problem schemes left after inheriting close to 90 when he took over at the beginning of 2015. 鈥淚 can now count the number on the fingers of one hand,鈥� he added.

Yesterday, Balfour Beatty moved further away from the problems Quinn faced four years ago when it posted an improved set of interim results.

But the firm voiced concerns over the future of HS2, where it is in line for 拢1.7bn worth of work, and Quinn admitted: 鈥淚 do have some doubts [it will go ahead but] on balance, yes it will. The unfortunate thing is I think it will be delayed further. It would be a real disappointment if they cancelled it.鈥�

He said a no-deal Brexit would mean the government would need to accelerate shovel-ready schemes such as HS2 but warned against the UK leaving the EU without a deal at the end of October.

鈥淚n an ideal world, we would have a consensual divorce. We need certainty by the end of the year.鈥�

Balfour Beatty鈥檚 group revenue in the half year to June was flat at 拢3.8bn but pre-tax profit was up 28% to 拢63m.

The client Balfour Beatty and Galliford Try say owes them 鈥渉undreds of millions鈥� of pounds for work on a problem road job in Aberdeen has said the pair have done nothing to prove it owes the two that sort of figure.

The scheme, known as the Aberdeen Western Peripheral Route, was finally fully opened in February 鈥� over a year late.

Last week Balfour Beatty chief executive Leo Quinn said the joint venture, known as Aberdeen Roads Limited, was owed 鈥渉undreds of millions鈥� and added: 鈥淭he job was sold for 拢530m but has cost over 拢1bn to deliver.鈥� He said the joint venture had been forced to shoulder around 拢500m in extra costs.

Quinn said the firm had until the end of the year to come to a negotiated agreement with Transport Scotland 鈥� or formally begin legal action.

But a spokesperson for Transport Scotland, the Scottish government鈥檚 transport agency, said: 鈥淲hile it is not appropriate to comment in detail on the contractor鈥檚 claim due to the commercially confidential nature of the discussions regarding it, we can confirm that, to date, Aberdeen Roads Limited has yet to provide sufficient evidence to substantiate its claim.鈥�

He also disputed Quinn鈥檚 claim the scheme had cost more than 拢1bn to build, adding the cost 鈥渞emains at 拢745m鈥�.

The was mired in a series of problems caused by issues such as bad weather and the cost of carrying out utility diversions.

The 58 km-long job has caused huge financial damage to the firms involved with Carillion going bust last year, in part blaming problems on the road for its demise, while the costs of completing it and another problem job, the Queensferry Crossing, saw Galliford Try launch a rights issue last March to raise close to 拢160m.

The firm has since embarked on a cost-cutting drive which saw 350 jobs go earlier this year after disclosing more losses on the Aberdeen and Queensferry jobs.