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Fri September 18 2020

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Contractors agree €600m settlement over fatal building collapse

30 Jun A joint venture of three major contractors has agreed to pay €600m (£550m) to settle claims centred on the fatal collapse in 2009 of Cologne’s archives building.

The City of Cologne and Cologne Public Transport (KVB) have reached the agreement with the joint venture that was constructing a section of the North/South metro when the building collapsed in 2009. The one-third partners in the Arge joint venture are Bilfinger, BAM operating company Wayss & Freytag Ingenieurbau and Strabag subsidiary Ed Züblin.

The out-of-court settlement covers all outstanding claims with regard to the project, including damages caused by the collapse of the archives building on 3rd March 2009.

Under the agreement, each joint venture partner will pay the City of Cologne and KVB €200m, after which the parties will dismiss further claims against each other.

BAM said that a substantial part of Wayss & Freytag Ingenieurbau’s share is covered by insurance payments. For the remaining part, Royal BAM Group will take an exceptional charge in its 2020 accounts for an amount of approximately €40m.

Bilfinger said that its €200m share will be fully covered by the company’s insurers.  Strabag said that the portion attributable to it will largely be covered by insurance and risk provisions, with no impact on its earnings estimate for 2020.

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Under the settlement agreement, the consortium has also agreed to carry out, at its own expense, the refurbishment and extended completion of the structural shell of the track switching facility as well as the integration of a space for a future memorial.

Bilfinger said that it welcomes the successful conclusion of the settlement, which will avoid a years-long legal dispute and a prolonged standstill of the important local infrastructure project to construct a north-south subway line in Cologne. It said that following the collapse of the Cologne Municipal Archives in 2009, a number of independent civil-law proceedings for the taking of evidence were unable to determine conclusively either the cause of the collapse or the extent of the losses incurred.

Strabag said that the agreement helps to avoid another long legal dispute about the cause and amount of damage, which would tie up material and human resources. “Despite the fact that the cause of the damage has not been conclusively clarified, the consortium has agreed to discontinue the reconnaissance inspections at the accident site,” it said. “This clears the way for the refurbishment and completion of the track switching facility and the conclusion of the underground line.”

“In view of the extremely complex issue regarding the cause of the damage, which has kept all involved parties occupied for more than 11 years and would probably have kept them occupied for another 10 to 15 years, and after intensive consideration of all options, we consider the agreement reached to be reasonable – not only for all project participants but also for our shareholders,” said Thomas Birtel, CEO of Strabag SE and chairman of the supervisory board of Ed Züblin. “The time has come to draw a line under the past and to focus on the challenges facing us in these difficult times. Still, the third of March 2009 will remain a deeply tragic day that we will never forget.”

BAM said that it has repeatedly expressed its sincere regrets that two people lost their lives as a result of the accident. “The Executive Board considers the current agreement to resolve this long-standing and highly complex issue in the interest of all stakeholders, including BAM’s shareholders,” it said.

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