Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


ANNEX A

Letter by PACE to the DETR

INFORMATION ON ELAND AND ASHDOWN HOUSES FOR THE ENVIRONMENT SUB-COMMITTEE OF THE ENVIRONMENT, TRANSPORT AND REGIONAL AFFAIRS SELECT COMMITTEE

  John Locke has asked me to respond to your request for additional information to transmit to the Environment Sub-committee of the Environment Transport and Regional Affairs Select Committee regarding costs of DETR Relocation. The information below addresses both the additional works borne by the Department and possible lines of financial redress. The figures exclude any costs of change to DETR's IT systems, as these fall outside PACE's remit of construction works project sponsor.
Additional Works Costs

£000£000

Eland House
Flooding and Water Damage Issues 787
Comprising:
Remedial work to building fabric and M&E installations 402
Preventative works385
Non-Flood Issues57
Comprising
Unsatisfactory Operation of the CHP Installation 50
Defective Atrium Extract Fan5
BMS Offsite monitoring2
Contractors Prolongation and Disruption Claim (in dispute)
Ashdown House
Contractors Prolongation and Disruption Claim (in dispute)

Total excluding Contractual Claim844


LIABILITY FOR ADDITIONAL COST

  With regard to Eland House, the liability for the damages is currently being pursued by our legal advisors. Due to the fact that the project comprised a Base Build phase and a Fit Out phase, and that there are in existence collateral warranties for base build workmanship and design, the matter is complex. It has been established that possible lines of action exist against the Landlord (Land Securities), the Base-Build contractor (John Mowlem), the Base-Build designer (EPR), the fit-out contractor (John Mowlem) and possibly members of the fit-out project management and design team. Of these the most promising line, according to current legal opinion to pursue the base build contractor under his collateral warranty. However, we are at the moment only in the preliminary stages of building our legal case and consequently views as to who we proceed against and the expected quantum of their liability have yet to be finalised.

  With regard to Ashdown house, the situation regarding liability is more straight forward. The contractor has currently been awarded an extension of time of 24 weeks, likely to be increased to 27.5 weeks. The amount of expense due to the contractor is very much in dispute, with the likelihood of the dispute ending in Arbitration. Once this has been resolved and the quantum of the Authority's liability established, a view will be taken on any consequential liability of the project management and design team.

  Due to the sensitivity surrounding the dispute resolution process, it is not possible to be explicit regarding the quantification of the future claim settlement.


 
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Prepared 17 August 1998