Shepherd counts cost of construction exit six years on
The family-owned Shepherd Group is still counting the cost of legacy construction arm activities six years after selling the construction business to Wates.
According to latest accounts for the Shepherd Group, which now primarily covers the activities of the Portakabin business, obligations on previously completed projects by Shepherd Construction are still costing the group dearly.
This rump of the group recorded a £31m loss last year relating to the completion of a retail and residential complex in Colindale, North London and significant additional provisions in relation to claims on completed contracts where there remains uncertainty about the outcome.
The firm said it had been notified of some latent defect claims, including significant claims relating to items arising on historic building design issues, particularly in relation to cladding design and other fore safety issues.
Shepherd Construction pre-tax losses202020192018201720162015*-£31.3m-£21.4m-£13.8m-£31.7m-£9.7m-£60.6m*Shepherd Construction sold on 30 September 2015 to Wates. Liabilities retained by group
The company no longer trades construction contracts and the accounts were not prepared on an ongoing concern basis.
Overall the group recorded a £49m profit, up from £45m on revenue slightly ahead at £348m.
During the year the modular and portable building arm increased profit by 27% to £81m.
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Record infrastructure spend to support 425,000 jobs a year
A record £650bn of public and private investment will be pumped into infrastructure over the next decade, according to the updated Infrastructure Pipeline launched today.
This pipeline includes for the first time the forecasted future workforce demand based on planned investment on projects and programmes.
In the more immediate four-year period up to 2024/25, the Infrastructure and Projects Authority estimates over 425,000 individuals will be needed on an average annual basis to deliver planned investment of £200bn as part of the Government’s Build Back Better extra spending pledges.
Funding mix of planned pipeline from 2021/22 to 2024/25 by sector (£’m)
To help suppliers make business-critical decisions as the country emerges from the coronavirus crisis, the Government is also setting out details of £30bn of planned procurements over the next 12 months in social and economic infrastructure.
This will create new opportunities for thousands of apprentices, technicians, graduates and skilled workers.
Today’s new Transforming Infrastructure Performance: Roadmap to 2030 also sets out a vision to put digital technology and innovation at the heart of our approach to infrastructure investment and delivery.
This pipeline outlines the extent to which new work will incorporate delivery through Modern Methods of Construction.
Some 170 of the contracts in procurements, worth between £15.4bn and £22.4bn, are planned to include elements delivered by making best use of MMC.
National Infrastructure and Construction Pipeline spreadsheet
Click here for link Infrastructure Pipeline webpage.
Construction bosses call on Boris to deliver HS2 Eastern Leg
A raft of construction bosses are among 63 industry leaders who have signed an open letter calling on the Prime Minister to commit to the completion of HS2’s Eastern Leg in full.
Leading rail, construction and engineering firms from the High Speed Rail Group (HSRG) and Railway Industry Association (RIA) have written to Boris Johnston as speculation mounts on the future of the route that will run from the West Midlands through to Leeds.
The letter states that “businesses have invested millions in people, in skills, in technology and in hardware to deliver HS2.
“To date, 16,000 people have been employed on the project, including over 500 apprentices. We had expected this to grow to 34,000 at peak construction, including 2,000 apprentices, over the coming years.”
It adds: “The question is often asked why infrastructure projects in the UK seem to cost more than elsewhere. And a big part of the answer lies in our propensity in the UK to review and re-open questions which had already been settled.
“We are indulging in a debate on HS2 scope and design (again) well after construction has commenced. It was understandable that upon taking office in 2019 you reviewed HS2. But having taken the decision to deliver it in full, changing that now would have a devastating impact on confidence in the sector and drive higher costs as other elements would have to be redesigned.”
Tom Wadsworth, Director at the High Speed Rail Group, said: “Last year the Prime Minister promised that HS2 would go ahead in full, including from the West Midlands to Leeds, and his own MPs have asked what he is going to do to level up if he doesn’t build the Eastern leg.
“Failing to deliver HS2 in full would undermine the Prime Minister’s commitment to levelling up and to net zero. So we are calling on the Prime Minister to reaffirm his promise to deliver HS2 in full, including the eastern leg.”
Among the signatories to the letter are Mace CEO Mark Reynolds, Keltbray CEO Darren James, Barhale Executive Director Andy Flowerday, Van Elle CEO Mark Cutler, VolverWessels CEO Alan Robertson and SSE Contracting Executive Chairman Neil Kirkby.
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HS2 workforce tops 20,000 landmark after one year
HS2 is supporting over 20,000 construction jobs just one year on from the formal start of construction on phase one from London to the West Midlands.
The latest official employment figures reveal how fast the infrastructure project has geared up having continued throughout the covid-19 pandemic.
Contracts have already been awarded to over 2,200 businesses. A further £25bn worth of opportunities are expected to flow out into the wider supply chain over the coming years.
Budget so far
About £11bn (actual prices) has been spent so far, including land and property provisions. Around £12.6bn (2019 prices) has additionally been contracted, with the remaining amount yet to be awarded.
The overall budget for phase one, including Euston, is nearly £44.6bn (2019 prices). This is composed of the target cost of £40.3bn and Government-held £4.3bn contingency. The target cost includes a contingency delegated to HS2 of £5.6bn for managing the risk and uncertainties that are an inherent part of delivering major projects.
HS2 measures to upskill local people who are out of work with the training and accreditation have provide 1,100 formerly unemployed with long-term jobs.
Aerial view of HS2’s Chiltern Tunnel South Portal in Hertfordshire
This number is expected to increase in the months and years ahead as the pace of major construction work increases and HS2’s journey extends north.
Mark Thurston, chief executive of HS2, said: “We’re enormously proud of the progress we’ve made on HS2 since the Prime Minister gave us the go-ahead last year, and despite the challenges of the pandemic.
“We’ve already launched our first two tunnelling machines, with more to launch in the coming months, and construction of our stations and depots are well underway.”
“HS2 is moving forward, creating jobs, enhancing skills, benefiting UK businesses and building a low carbon, high capacity railway that will change the way we travel in Britain.”
Progress at the first of the 10-mile long Chilterns tunnel drives
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