The week in construction – Week 2 2017

Contracting

Hull-based Hall Construction set for administration

Hull-based contractor Hall Construction Group has filed a notice of intention to appoint an administrator.

More than 100 staff and workers have been warned that they face losing their jobs as the £30m turnover firm teeters on the brink.

The regional contractor traces its history back almost 130 years and built a long track record of completing difficult and complex schemes in both the public and private sector up to a value of £12m.

The group operates a construction and specialist renewables business. It embarked on a major expansion drive in 2013 with a new expanded management team, which raised workload but at lower margins.

Management of the increased volume of contracts put a strain on the system and two out-of-town contracts lost significant amounts of money.

The extent of the problems began to emerge last year when Hall posted a £2.2m loss for 2015.

Chairman Martin Hall injected much of his own cash into the business as part of a £1.9m refinancing deal to overcome cash flow problems from loss-making contracts.

Hall also returned to the managing director role as part of a management shake-up to streamline the business and get it back on track. By September last year he was predicting that the business would break even in 2016.

But the construction arm has been hit by further problem contracts leading to another cash crisis.

Green light for new £500m Chelsea stadium

Planners at Hammersmith & Fulham council have given Chelsea the go-ahead to build a new 60,000-seater stadium at Stamford Bridge.

Plans for the new £500m ground will see the current stadium demolished.

A club statement said: “We are grateful that planning permission was granted for the redevelopment of our historic home.
“The committee decision does not mean that work can begin on site.

“This is just the latest step, although a significant one, that we have to take before we can commence work, including obtaining various other permissions.”

The new stadium has been designed by architects Herzog and de Meuron and construction work is expected to last three years.

Multiplex scoops landmark £1bn Nine Elms scheme

Chinese developer Dalian Wanda Group has selected Multiplex to build its £1bn Nine Elms development near Vauxhall in London.

Multiplex is the third contractor to take on the project after two previous preferred bidders failed to agree a final price.

Interserve was originally selected to deliver the mixed-use project comprising two towers reaching 42 and 58 storeys. But the firm and its joint venture partner China State Construction Engineering Corporation abandoned the project in April.

Balfour Beatty then beat Multiplex on the project rebid, but also stepped away two months ago after failing to agree the contract price.

The 1.14m sq. ft One Nine Elms development brings to market 437 homes, as well as the first Wanda Vista Hotel to open outside of China.

The scheme also includes a business centre, fitness suite and children’s play area. The landmark project will also provide a further 3,584 sq ft of high-quality retail space and landscaped parkland for the local community to enjoy.

Bouygues walks away from £90m Bristol Arena job

Bouygues has decided to abandon its £90m Bristol Arena project after months of talks with Bristol City Council ended in deadlock over the final build price.

Bristol City Council said it would now start the search for a new contractor to deliver the flagship project.

Bristol Mayor Marvin Rees said work is now expected to start on site by spring 2018 with the new Temple Meads arena building opening in 2020.

Bouygues UK has been working as a consultant on the project in its capacity as preferred tenderer in a two stage tender process.

This was to agree the final package of works and a target cost, ensuring all issues were understood and agreed before moving ahead with the physical building work.

However the council confirmed today that two sides have been unable to agree on price and will not be progressing to full contract.

The council said it was now actively exploring other options to construct the arena as quickly as possible.

The resulting venue will form part of an expanding Temple Quarter Enterprise Zone which was recently boosted with news that Bristol University plans to build a new campus in the area.

The council’s original procurement exercise allows the council to approach another contractor. The council can also re-tender if required with the benefit of experience and the work already done.

BAM Construction, Buckingham Group, Laing O’Rourke and Sir Robert McAlpine originally also showed an interest in the Arena project.

House Building

Crest Nicholson appoints group finance director

Crest Nicholson has hired Robert Allen, a former Financial Controller at British American Tobacco, as its new group finance director.

Allen takes over from Patrick Bergin, whose appointment as Chief Operating Officer was announced in November 2016.

Allen, who takes up the post on February had several roles at British American Tobacco, most recently regional finance controller for the European, Africa and Middle East regions.

Chris Tinker, a member of the group’s executive management team, also joins the board, becoming chairman of major projects and strategic partnerships.

Kempton Park to become Redrow housing estate

Kempton Park racecourse could be closed and turned into a housing estate.

Course owner the Jockey Club is considering plans with Redrow for 3,000 homes on the historic track.

Money raised from the sell-off would help fund a £500m investment in horse racing by the Jockey Club.

Re-investment plans include a new floodlit all-weather racecourse in Newmarket.

Any sale of Kempton Park would not be until 2021 at the earliest and would be dependent on raising at least £100m.

Plans have been submitted by the Jockey Club to Spelthorne Borough Council to redevelop Kempton Park.

A planning application for the all-weather track at Newmarket is currently being prepared.

Bovis Homes chief quits

Bovis Homes chief executive David Ritchie is stepping down from running the southern house builder with immediate effect.

He will remain with the group until the end of February to assist with the process of transition as Earl Sibley, the group’s finance director, takes over as interim chief executive.

Bovis Homes said it would now start its search for a permanent successor which is expected to take several months.

His decision comes weeks after the house builder announced a profit warning because it failed to complete the number of homes it expected at the end of 2016.

Annual pre-tax profits are expected to range between £160m and £170m, below previous City forecasts of £183m. The company turned in a pre-tax profit of £160m in 2015.

London Mayor calls in first housing schemes

His intervention on the applications – one in Haringey and the other in Harrow – will allow City Hall experts to help create more suitable proposals and secure hundreds of genuinely affordable homes.

Haringey Council had rejected an application for up to 505 homes, including a 21-storey tower at Hale Wharf in Tottenham, over concerns that it would be too tall and would adversely impact Green Belt land.

An application for 186 homes in Palmerston Road in Wealdstone was also rejected by Harrow Council, as the 17-storey development was deemed too high.

Both sites sit within designated Opportunity Areas and Housing Zones – areas of land that are considered appropriate for development.

City Hall planners will now work with the respective developers to protect the Green Belt from development at Hale Wharf and look to secure as much affordable housing as possible at both sites.

The Mayor will consider both schemes at representation hearings that will be held later in the year.

(All news stories are credited to Construction Enquirer).

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