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Galliford Try: Clients helping us plan for Brexit

Galliford Try has been forced to restart stockpiling materials, and clients are helping it take other mitigating action ahead of the new planned Brexit date, according to construction boss Bill Hocking.

He told Construction News that stockpiling had begun again ahead of the 31 October leaving date but that it is being carried out “with a higher degree of scepticism than last time”.

The company stockpiled materials in the early part of the year, ahead of the original Brexit date of 29 March.

Clients are responding to the situation in different ways, Mr Hocking revealed, but have largely been “pragmatic” about working with the contractor to mitigate any potential adverse effects.

One client has agreed to foot the bill to buy warehouse space so Galliford can bring materials in early and store them.

Another has agreed to fix the current price in euros for a large unitised cladding package that is coming in from the continent, meaning that if the pound goes down the client covers the extra cost, but if it goes up it will be cheaper.

“I thought that was quite a mature attitude,” Mr Hocking said.

On some contracts, clients had agreed to “holidays” on any liquidated damages that could be brought against delays caused by problems getting materials into the UK.

The chief executive of construction and investments at Galliford Try was speaking to CN following the release of the company’s full-year results this morning.

The company revealed the value of its claim against Transport Scotland relating to the Aberdeen Western Peripheral Route was £100m.

Mr Hocking said discussions with the client were at an “advanced” stage and hoped they would conclude in the next couple of months.

“We are preparing for litigation should that fail, but I am hopeful that we will get to a resolution before that time,” he added.

The contractor lost more than £150m building the road with joint venture partners Balfour Beatty and, initially, Carillion.

A separate claim against an infrastructure investment fund worth £54m was already “going down the legal route” and Mr Hocking said he was optimistic that Galliford Try would win the case.

“We’ve already won two adjudications on the principle of the matter, so we think we’ve got a very strong case,” he said.

Yesterday the group announced it had agreed “high-level” terms with Bovis to sell its Linden Homes and partnership & regeneration businesses.

Selling the housing interests now was “pretty good timing” for the construction business, Mr Hocking said, and with legacy projects completed and a restructuring complete it was already in a stronger position.

“If this deal goes through, and of course there’s a long way to go on this, we will end up with a well-capitalised construction company with a good order book, good people and a good client base,” he said.

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