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Wed November 14 2018

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Aberdeen bypass contractors confirm summer completion

22 May Trading updates from the two contractors left standing on the Aberdeen Western Peripheral Route indicate that the project remains on course for completion this summer.

Transport Scotland, the client, is taking no chances, however. It says the road will open in autumn 2018.

Aberdeen Roads Limited, a joint venture of Balfour Beatty Investments Ltd, Carillion Private Finance (Transport) Ltd and Galliford Try Investments Ltd was awarded a £745m contract in December 2014 to build and operate the Aberdeen Western Peripheral Route /Balmedie to Tipperty (AWPR/B-T). The 58 km road is one of the largest infrastructure projects in Scotland.

Aberdeen Roads appointed AWPR Construction Joint Venture – Balfour Beatty, Morrison Construction (a Galliford Try subsidiary) and Carillion Construction – to build the road for a fixed price of £550m, with completion by spring 2018. The contractors were initially working to a spring 2017 target completion date but weather conditions hampered progress.

Under the terms of the contract, Aberdeen Roads receives no payment for the work until a section of road is open to traffic. Parts of the route have now opened but delays and cost overruns contributed to the collapse of Carillion in January 2018. Balfour Beatty and Galliford Try have been financially strong enough to withstand the hit, however, and both companies issued trading updates to shareholders today.

Balfour Beatty said: “Completion of the Aberdeen Western Peripheral Road project is still expected this summer and there is no change to the £105-£120 million Balfour Beatty cash outflow guidance for 2018 provided at the full year 2017 results.”

Galliford Try, however, is making further provisions for losses on the job. It said: “On the Aberdeen Western Peripheral Route we are making good progress on site, with progressive handover of sections of road under way.  We have experienced some further cost pressure, principally from weather delays, which are likely to increase the exceptional charge in the current year.  The amount will depend upon progress recovered through the summer, and is expected to be lower than the charge (£25m) taken in the first half.  We are continuing to discuss several significant claims.  Practical completion of the project is anticipated this summer.”

MPU

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