AWPR

Economy secretary assures parliament over jobs and future of AWPR

Keith Brown on a visit to the AWPR site last year

Cabinet secretary for the economy, jobs and fair work, Keith Brown, has moved to reassure MSPs that disruption and job losses caused by Carillion’s collapse would be minimised in Scotland, though the minister stopped short of giving an opening date for the Aberdeen Western Peripheral Route (AWPR).

The UK’s second-biggest builder entered liquidation on Monday after racking up debt and pensions burdens of around £1.5 billion.

The firm formed one-third of the Aberdeen Roads Ltd (ARL) consortium leading the £745 million AWPR work alongside Balfour Beatty and Galliford Try.

In a topical question at Holyrood, Aberdeenshire East MSP Gillian Martin raised concern for jobs dependent upon the project and also the knock-on effect on smaller companies in the supply chain in the North East and throughout Scotland.

In response, Mr Brown said that support is available to any workers who may be concerned for their jobs, with help and advice to be made available to subcontractors through a designated Scottish Enterprise helpline.

Furthermore, the cabinet secretary assured parliament over the contract to deliver the AWPR scheme with the other firms involved in the consortium making clear that they will fulfil their contract obligations and had “very quickly” notified the London Stock Exchange of their intention. Mr Brown confirmed that Transport Scotland will support and work with them throughout this process.

The economy secretary said he was unable to give a “cast-iron guarantee” that jobs would not be lost as a result of the liquidation of the company, but said there was a “good chance” employees would continue to work on existing projects.

When asked about the future of Carillion employees working on the bypass, Mr Brown said: “I think it is likely that the two remaining contractors will require work to be done that was previously done by the employees of Carillion.

“I don’t want to be too definitive, but there’s around 70-plus employees, direct employees of Carillion, employed on that contract plus 190 employed on other terms, including some agency staff.

“We can’t give a cast iron guarantee on the workers but I think there is a good chance that many of those will be reemployed and for those that are not we have offered the assistance I have previously mentioned.”

On the day of Carillion’s collapse, the joint venture firms indicated that the announcement leaves a financial hole of £40-80m in the AWPR project.

Galliford Try said: “The terms of the contract are such that the remaining joint venture members, Balfour Beatty and Galliford Try, are obliged to complete the contract.  Our current estimate of the additional cash contribution outstanding from Carillion to complete the project is £60-80m, of which any shortfall will be funded equally between the joint venture members. The companies will discuss the position urgently with the official receiver of Carillion and Transport Scotland, to minimise any impact on the project.”

Mr Brown had said the Scottish Government’s Partnership Action for Continuing Employment (PACE), which helps people facing redundancy, would be available for those under threat.

He said PACE would also be available if anyone should lose defence jobs.

Gillian Martin MSP said: “Our first thoughts when businesses face such serious difficulties should always be for those who may be facing uncertainty over their jobs and their future, and it was encouraging to see parliament united in support of them today.

“I am grateful to the cabinet secretary for the support being made available both to Carillion employees and to subcontractors who may have concerns at this time.

“Early confirmation from the other partners in the Aberdeen Roads consortium that they intend to press ahead and deliver the AWPR contract will be hugely reassuring for my constituents. I know people and businesses across the North East are looking forward to the opening of the much-needed £750 million new route this year, and I will be engaging with the Scottish Government and Transport Scotland going forward to ensure that remains on schedule.”

Meanwhile, the Scottish  Government has set up helplines for anyone who may be affected by the failure of the construction firm.

Scottish companies affected by the Carillion insolvency can call Scottish Enterprise on 0300 013 3385 or register their details here.

The redundancy helpline operated by Skills Development Scotland is 0800 917 8000, with help also available here.

It was also announced today that banks and government were working together to mitigate the effects of Carillion’s collapse on businesses within the supply chain.

Contingency plans take hold in wake of Carillion collapse

Carillion is part of a coalition delivering the Aberdeen Western Peripheral Route (AWPR)

Clients and joint ventures partners of collapsed contractor Carillion have taken steps to begin contingency plans after the firm entered compulsory liquidation today.

An application was made to the High Court for a compulsory liquidation of the UK’s second largest construction company before opening of business this morning after talks with the UK government to save the company were unsuccessful.

The firm had been involved in the £745 million Aberdeen Western Peripheral Route (AWPR) and had contracts with Registers of Scotland, the Scottish Children’s Reporter Administration, West of Scotland Housing Association and NHS Greater Glasgow and Clyde among many others.

Network Rail awarded Carillion a contract last year to deliver platform extension works and the firm is also responsible for two facilities management contracts worth £158m with the Ministry of Defence (MoD) which cover 83 military sites in Scotland.

Contingency plans have now been put into effect with the hope to minimise disruption to the projects.

Galliford Try is in joint venture with Carillion and Balfour Beatty on the construction of the £550m section of the AWPR between Balmedie and Tipperty for Transport Scotland.

“The Scottish Government are in discussions with the liquidators and the UK government to support Carillion employees and secure the completion of contracts.”

Economy secretary Keith Brown

Galliford Try said: “The terms of the contract are such that the remaining joint venture members, Balfour Beatty and Galliford Try, are obliged to complete the contract.  Our current estimate of the additional cash contribution outstanding from Carillion to complete the project is £60-80m, of which any shortfall will be funded equally between the joint venture members. The companies will discuss the position urgently with the official receiver of Carillion and Transport Scotland, to minimise any impact on the project.”

A Transport Scotland spokesman reiterated the bypass project will be completed by the spring.

He said: “We expect that any impact on the AWPR will be mitigated by the fact that Carillion’s construction partners are joint and severally liable and as such, the other two construction partners remain fully responsible for the completion of the works.

“Aberdeen Roads Limited, the construction joint venture for the project, confirmed recently that they remain committed to the delivery of this project.”

Amey has incorporated joint ventures with Carillion to deliver the regional prime and national housing contracts for the MoD, through the Defence Infrastructure Organisation (DIO). These contracts maintain the MOD estate in the UK.

It said: “The terms of the joint ventures’ arrangements mean that Amey will continue the services now that Carillion has announced it is entering into immediate compulsory liquidation. Amey is committed to doing this and ensuring continuity of service to the DIO and MOD and the service men and women in the UK.

“For the past few weeks, Amey has been working on detailed contingency plans with the DIO and the Cabinet Office to ensure it can effectively continue to manage the contracts and these are being implemented today.

“Amey confirms it is fully prepared to continue the service obligation of the contracts without adverse effect on the employees of the joint ventures or the supply chain.”

Network Rail commissioned Carillion for both the Waverley platforms extension project and the electrification of the railway line through Shotts.

In addition, the firm was also contracted for platform works at Broughty Ferry and Aberdeen railway stations.

Carillion Powerlines secured an £11.6m contract to carry out electrification work on the Shotts line in December

A Network Rail spokesman said: “We are activating our contingency plans as a result of this unfortunate news.

“We will be working closely with the administrators and Carillion’s management team to ensure projects that they are working on continue and that the supply chain is maintained for this important work.

“Our aim is to ensure that this news has as little impact as possible on our projects to grow and expand the railway network.”

Kier Group, which currently operates joint ventures involving Carillion on HS2 and the Highways England smart motorways programme, jobs, will now have to take them on alone or seek a new partner.

A Kier spokeswoman said: “We have put in place contingency plans for each of these projects and are working closely with clients so as to achieve continuity of service.

“Following today’s announcement and after a short period of transition for these contracts, we do not expect there to be an adverse financial impact on the group arising from these joint venture contracts.”

The Construction Industry Training Board (CITB) said that it was “taking steps to secure the future of the 1,400 Carillion apprentices” by redeploying them to other firms.

CITB chief executive, Sarah Beale, said: “The news of Carillion entering insolvency is clearly a significant blow to the UK construction sector. While this will present the sector with a number of challenges, CITB’s priority is to do all it can to ensure that Carillion apprentices can continue their training so their skills are not lost.

“We have established a project team to work with the apprentices and will be offering in principle grant and apprenticeship transfer incentives to our employer base in order to retain these learners. We will be working closely with the ESFA, the official receiver and our network of college providers so that every possible support is in place to help these apprentices continue their training. We will be liaising with the official receiver with a view to contacting the apprentices as soon as possible.”

The Scottish Government said it is in talks to support Carillion employees and secure the completion of contracts in Scotland.

Cabinet secretary for the economy, Keith Brown, said: “Our first thoughts are with those Carillion employees who will be concerned for their jobs today and we are in discussions with the liquidators and the UK government regarding the measures they intend to put in place regarding private sector, Network Rail and UK govternment-backed contracts in Scotland to support Carillion employees and to secure the completion of these contracts.

“The Scottish Government has been working to manage or eliminate risks associated with Carillion’s difficulties since July last year and we have contingency plans in place for affected contracts, including the AWPR where the contract contains a mechanism for the remaining two joint venture partners to deliver the project and we expect that work to continue.

“I have spoken to the Secretary of State for Scotland this morning and my officials have also spoken with PwC to establish the situation and should it be necessary we stand ready to support for any affected employees through our Partnership Action for Continuing Employment (PACE) initiative which aims to minimise the time individuals affected by redundancy are out of work.”

Blog: AWPR – New Year message from Keith Brown

Keith Brown on a visit to the new River Don Crossing construction site

Cabinet secretary for economy, jobs and fair work, Keith Brown, says the £745 million Aberdeen Western Peripheral Route (AWPR) is due to be completed by the spring and is already delivering benefits to local communities.

Less than a decade ago, no-one in the north-east could envisage the Aberdeen bypass ever being built.

One of the most ambitious road infrastructure projects in Scotland, indeed the UK, was stopped at a red light – held up in court while other major projects in Scotland were pressing ahead.

Fast forward to early 2015 – the legal battle had been fought and won, and Scotland’s First Minister Nicola Sturgeon turned the first turf to kick start a three quarters of a billion pounds major road infrastructure scheme.

Not only has the new road delivered thousands of jobs during its construction – it will support 14,000 more for the north-east over the next 30 years – it will also provide £6 billion to the local economy over the same period.

The project will see 30km of access roads, 40km of side roads, 58km of new dual carriageway, nearly 1,200 bridge beams supporting 75 new bridges, 70 new culverts, two major river crossings, two wildlife crossings, and a railway bridge being built. The feat of engineering to deliver this mammoth scheme is truly staggering and everyone who is playing their part can already take immense pride in being involved.

Of course, the new bypass is already delivering benefits – we pledged from the outset to open sections of the scheme as they became available and bring early benefits to local communities, and we’ve done just that. The new merge onto the A90 at Stonehaven, for instance, has significantly reduced traffic flow through the town, reducing congestion . We’ve recently seen the link road open at Foveran, Contlaw Road bridge become operational and numerous side roads opened, with more sections due to open in the weeks ahead.

Naturally, the work has impacted on traffic in some areas, particularly as we move through to the final stages, where we will connect up the new infrastructure to the existing road network.  I would like to thank road users for being patient whilst we deliver this massive investment.

Aerial view of Craibstone junction nearing completion

The bypass will see journey times slashed – we can estimate a typical trip from Stonehaven in the south to Aberdeen Airport during peak times to be cut in half to around 28 minutes. Congestion in and around the city will be significantly eased with the effective removal of long haul traffic currently using Anderson Drive. Roads will also be safer because the volume of traffic will lessen in the Aberdeen City Council area, air pollution in the city will also be reduced and public transport can be improved.

Following the opening of the bypass, we can look forward to Haudagain roundabout, Aberdeen’s most notorious bottleneck, finally being consigned to history. Preparation work on this project has been progressing well and construction work is expected to start on completion of the new bypass.

It’s been some time coming, and I know it has caused unavoidable disruption, but I’m proud to have seen the bypass evolve from the drawing board to full construction. I’d like to wish everyone a very Happy New Year – local communities should ready themselves as the complexion of the region is about to change for the better, with 2018 set to be a defining year for transport in the north east.

Aberdeen bypass contractor fined over river pollution

SEPA chief executive Terry A’Hearn

The consortium building the new Aberdeen bypass has been issued with a £280,000 penalty for a series of silt pollution incidents on the rivers Don and Dee.

Aberdeen Roads Limited, a joint venture including Balfour BeattyMorrison Construction and Carillion, was deemed responsible for the incidents on the important salmon rivers along with some tributaries.

The case if the first major enforcement of new powers by the Scottish Environment Protection Agency (SEPA) and will see over £280,000 committed to community projects and environmental improvements across Aberdeenshire.

Following extensive investigations and enforcement action by SEPA between 2015 and 2017, the Construction Joint Venture (CJV) building the multi-million pound Aberdeen Western Peripheral Route (AWPR) have offered the funding in an Offer of Enforcement Undertaking, after causing a series of silt pollution incidents which affected the Aberdeenshire rivers.

The Enforcement Undertaking admits full liability by the AWPR B-T Construction Joint Venture (CJV) for the pollution and will result in the funding being divided between eight community initiatives as a penalty for the disruption and environmental impact.

The offer, which required the Construction Joint Venture to engage with local stakeholders, has been formally accepted by SEPA, thus securing one of the biggest financial outcomes for an environmental offence in Scotland.  It is only the fourth of its kind to be accepted by SEPA.

Granted as a new enforcement power in June 2016, an Enforcement Undertaking represents a formal offer by an organisation or individual to make amends for an offence by improving the environment or communities affected, using their own resources.

The new enforcement power can be used to bring about effective and immediate solutions to environmental offences and requires the offender to work with SEPA to ensure ongoing compliance in future, as well as making appropriate restitution.

SEPA chief executive, Terry A’Hearn, said: “Every day SEPA works to protect and enhance Scotland’s environment and we will respond robustly to organisations who fail to comply with environmental controls. Every operator must comply.

“It’s right that the Construction Joint Venture should offer this significant enforcement undertaking in recognition of the environmental impact of their actions, which resulted in a series of silt pollution incidents impacting numerous tributaries to Aberdeenshire rivers, the Dee and the Don.

“We are delighted that CJV has become one of the first operators to use the new enforcement undertaking.  The CJV has stepped forward, accepted responsibility and set out to put things right.

“An enforcement undertaking not only compels those who breach the law to make amends, it instils a more positive working relationship based on understanding the duty we all share in safeguarding our natural environment.”

 

Aberdeen Roads Limited is constructing the new 36-mile road which will provide a fast link between towns between the North, South and West of Aberdeen.

The project is being delivered by Transport Scotland on behalf of the Scottish Government and in partnership with Aberdeen City Council and Aberdeenshire Council.

The silt pollution was caused by heavy rainfall which led to muddy water running off the construction site into waterways.

An enforcement notice was issued to contractors last year after concerns were raised at the time about the impact it could have on salmon and freshwater pearl mussels.

Transport Scotland said: “We take our environmental responsibilities very seriously and have been working closely with SEPA and the contractor, Aberdeen Roads Ltd (ARL), to ensure the watercourses on site are protected from construction activities.

“We welcome any measures that have been agreed between SEPA and ARL where they result in a positive impact on the environment.”

The biggest beneficiary of the undertaking is the Dee District Salmon Fishery Board, which will receive £112,500 for improvement projects relating to diffuse pollution, and £37,500 to fund an agricultural officer for two years to assist farm owners in reducing diffuse pollution in the River Don.

Richard Gledson, chairman, Dee District Salmon Fisheries Board, added: “Silt pollution from the construction of the Aberdeen Western Peripheral Route gave us great cause for concern, particularly as the River Dee is designated as a special habitat for both salmonid fish and fresh water pearl mussels, which rely on a delicate eco-system to feed and spawn.

“We welcome both the immediate response by SEPA, including the temporary restriction of construction activity, their investigation, and today’s enforcement undertaking. This will provide for environmental improvements that will go some way to offsetting the impact on local communities and the environment.”

In addition to the funding for community and environmental benefits, SEPA will also recover £47,958 as part of the offer. This lump sum will be made by the CJV as a contribution towards the time spent investigating the various pollution incidents which resulted from their construction works.

Mabey helps deliver Aberdeen bypass

Photo - Aberdeen bypass 1The UK Hire business of bridge and engineering services specialist Mabey has highlighted its role in delivering the Aberdeen Western Peripheral Route/Balmedie-Tipperty (AWPR/B-T), cutting journey times and reducing pollution in the UK’s third most congested city.

The 58km bypass project is being delivered by Transport Scotland in partnership with Aberdeen City Council and Aberdeenshire Council. Aberdeen Roads Limited was awarded the contract to build the AWPR/B-T in December 2014 and has appointed AWPR Construction Joint Venture, comprising Balfour Beatty, Carillion and Galliford Try, to build the road.

Using experience from last year’s Mersey Gateway project, Mabey was brought on to the project to provide temporary support structures for the pre-cast concrete beams for a number of the 75 structures to be built across the project. These beams form the bridge decks as they are craned into position and while the permanent concrete cross head beams are constructed.

Photo - Aberdeen bypass 2.pngThe scheme combines a number of Mabey’s industry-leading propping and jacking systems to provide a turnkey, cost-effective engineering solution. As a result, the company’s dedicated fabrication unit has produced around 200 tonnes of equipment specifically for this project.

Gordon MacDonald, CEO, Mabey Hire, said: “Aberdeen’s peak time traffic is so huge it eclipses that of London. To reduce this large-scale congestion and help limit pollution costs, our experienced delivery team has been working with Aberdeen Roads Limited to make sure this project is managed as quickly, safely and efficiently as possible. Since our involvement, we’ve completed seven structures, with one more in the pipeline.”

And finally… Walk on the wild side

AWPR-B-T Design Guide V6Special wildlife bridges, the first of their kind on a Scottish trunk road, are being constructed by Aberdeen Roads Limited on the Aberdeen Western Peripheral Route/Balmedie-Tipperty (AWPR/B-T) project to ensure animals can safely access areas on either side of the road once it opens to traffic.

Two dedicated wildlife bridges are being constructed over the new road at Kingcausie and Kirkhill, where there are large surrounding areas of woodland habitat. Mammal-proof fencing will guide animals towards the bridges providing them with safe crossing points which will join up habitats and connect colonies. Small trees and shrubs will also be planted on and around the bridges to provide cover for wildlife.

The decking areas of these two bridges will be covered with topsoil in varying depths, with planting to replicate the natural habitats of deer, badgers and red squirrels and encourage wildlife to use the routes.

In addition, a further bridge across the AWPR at Kirkhill, which will be used by vehicles to access local forests and remote properties, will have one half of its carriageway landscaped for wildlife and equestrian use.

Wildlife bridgeA Transport Scotland spokesperson said: “This is a good example of the AWPR/B-T contractor implementing just some of the measures which are outlined in the Environmental Statement of 2007, which will help to maintain biodiversity in the north east following construction.

“These wildlife bridges, along with 17 mammal underpasses, have specially designed planting and strategic seeding to encourage biodiversity. These are just some of the measures that are considered necessary to ensure wildlife continues to thrive in the area once the road has been built.

“These ‘green’ bridges were successfully pioneered in the Netherlands in 1988, where they are known as ecoducts.  There are also now a small number of these structures on some major routes in England.”

Galliford Try to quit large infrastructure as profits hit by Queensferry Crossing and AWPR

Queensferry Crossing 2017Galliford Try has revealed that it will no longer bid for major infrastructure projects after its construction division suffered an £89 million loss due to problems on delivering the Queensferry Crossing and the Aberdeen Western Peripheral Route (AWPR).

Pre-tax profits for the year to 30 June 2017 fell nearly 60% from £135m to £59m, on revenue up 6% to £2,820m (2016: £2,670m).

Profit was hit by one-off charges of £98.3m, which includes £87.9m in respect of the two infrastructure joint ventures in Scotland: the £790m Queensferry Crossing and the Balmedie-Tipperty section on the £550m AWPR.

Both projects were contracted on fixed-price terms – Queensferry Crossing in 2011 and AWPR in 2014.

Galliford Try’s construction division made an operating loss of £88.8m for the year on revenue of £1,526.9m. Even excluding the one-off costs associated with writing off major contract losses, the division still failed to break even, making a pre-exceptional operating loss of £900,000.

On a positive note, Galliford Try’s house-building division Linden Homes made an operating profit of £170.3m (2016: £147.2m) on revenue up 11% to £937.4m (2016: £840.8m).

Chief executive Peter Truscott the firm will now focus on lower risk public, utility and two-stage tender work.

He said: “We have put into place rigorous processes to ensure a more disciplined approach towards project selection. Today, we are focusing on lower-risk public and regulated sectors and two-stage negotiated work, rather than large infrastructure projects on fixed-price, all-risk contracts which these legacy projects were.”

He added: “The construction market remains largely positive, as the UK continues to require substantial investment in its social and economic infrastructure. As a result, the order book in our Construction business remains strong and we have already secured a significant proportion of work for the financial year, and much of the following year 2019. Our focus is on contract quality and risk management, and we will continue to be rigorous in our project selection, with revenue expected to remain broadly stable year-on-year as a result. Our newer work has been operating under these parameters and performance to date has been encouraging and is supportive of our target margins. As our legacy positions close out we expect margins to improve as we work towards our 2021 target of at least 2.0%.”

AWPR worker taken to hospital after being hit by falling timber

Work in progress at the River Dee Crossing

Work in progress at the River Dee Crossing

A worker on the Aberdeen bypass was taken to hospital with head injuries after a falling piece of timber cracked his hard hat apart and knocked him unconscious.

The Press and Journal reports that the accident took place just south of the River Dee crossing yesterday afternoon.

It is understood the man had raised concerns about the “unsteady” nature of the plank immediately before it came crashing down on his head.

Witnesses said the force of the blow smashed apart his protective helmet, leaving him unconscious and with a “deep” laceration.

The man regained consciousness at the scene, but was taken to Aberdeen Royal Infirmary by ambulance to be checked over.

Transport Scotland said contractors were investigating the circumstances and would use the findings to enhance site safety.

A spokeswoman said: “The project contractor, Aberdeen Roads Limited, has confirmed that an incident took place on its site earlier today resulting in one of its operatives being taken to hospital.

“The contractor is now undertaking an investigation in to the cause of the incident and will implement any lessons learned throughout the site.

“Transport Scotland will continue to work with Aberdeen Roads Limited to enhance the health and safety of the local community and the workforce.”

The incident is the latest in a number of accidents on the AWPR project. A worker at the Milltimber stretch of the site was left with cracked ribs, a liver tear and dislocated toes after being crushed by a half-tonne pipe back in March.

Carillion woes ‘won’t risk AWPR’, says Transport Scotland

Milltimber BraeThe completion of work on the £745 million Aberdeen city bypass road is not in any danger despite turmoil at one of the project’s consortium partners, Transport Scotland has insisted.

Last week construction and infrastructure firm Carillion continued a troubled spell after it issued a profit warning with chief executive Richard Howson stepping down with immediate effect.

Shares in Carillion fell over 35% following the announcement as the firm said it would need to bolster its balance sheet and was struggling to stay within borrowing limits.

The company has now drafted in accountancy giant EY to help carry out a review of the business.

The share price showed signs of recovery after a partnership featuring Carillion won two key UK government contracts for the HS2 rail line.

And just today the firm announced it has been awarded two further government contracts worth a combined £158m.

Yesterday, Transport Scotland confirmed the two other firms building the Aberdeen bypass road, Balfour Beatty and Morrison Construction, face taking on the obligations of a third partner if it should, for any reason, pull out of the consortium.

A spokesman said the construction contract at the heart of the £745m route – due to open this winter – would remain intact, no matter what.

He told the Press & Journal: “As is usual in projects of this nature, the contract makes provision for a wide variety of circumstances, including the possibility of withdrawal of one of the partners.

“This ensures the project can be successfully delivered in all circumstances.”

£18m Haudagain roundabout contract up for grabs

Haudagain roundabout useA contract notice has been advertised today calling on interested firms to bid for the A90/A96 Haudagain Improvement Project.

The project involves the construction of approximately 500m of new dual carriageway connecting the A90 North Anderson Drive and the A96 Auchmill Road.

As well as reducing congestion and improving journey time reliability, this project will bring about an improvement in road safety and provide new pedestrian and cycling routes through the local area.

Minister for transport & islands, Humza Yousaf, said: “Today marks a major milestone in delivering relief for drivers and communities across the North-east area.

“Starting procurement on this much needed improvement now, highlights the Scottish Governments commitment to tackling the bottleneck at Hauadagain roundabout and will ensure that we are ready to hit the ground running as soon as the Aberdeen Western Peripheral Route is open to traffic.

“Completion of the AWPR will take traffic away from the streets of Aberdeen and improve air-quality to some 75,000 houses, that coupled with the removal of the bottleneck roundabout at Haudagain, will deliver improved journey times for strategic and local traffic bringing much needed relief to road users and communities in the north-east.”

The construction value of the A90/96 Haudagain Improvements contract is currently estimated at approximately £18 million. An advance site preparation works contract will also be procured in the coming months with works due to commence early in 2018 in advance of the main works.