Wales' 1999 Rugby World Cup may be held in France, withÉ - Laing failing to convert

It should have been the crowning glory of Welsh Rugby, and a feather in the cap of its constructor, John Laing. Instead, the £121 million Millennium Stadium in Cardiff is proving a garish advertisement for the shortcomings of both parties.

Inadequate decision making, poor planning and naivety on both sides has left the project running £20 million over budget. Even worse for rugby lovers, the project may not be completed in time for the Rugby World Cup in June 1999.

It has now emerged that Welsh fans may have to trek all the way to France, in what would be the final ignominy for their national game.

A spokesman for Le Stade confirmed to CJ that the Welsh Rugby Football Union has made contingency reservations for next June as doubts grow over just how much of the stadium Laing will have completed by then.

The extent of the project's disarray was revealed last week, when Laing was forced to make a stock market announcement disclosing contracting losses of £26 million. The worst offender was Laing's civils division, which has notched up losses of £23 million - £20 million of which are attributed to the Millennium Stadium.

Laing's woes at Cardiff are sounding an ominous note for lump sum contracting within the group. The loss-making design and construct job has proved the final straw for the Laing board, which has been growing increasingly disenchanted with the high-risk and low-return of mainstream contracting. The grand failure of Cardiff has now crystallised thinking in the boardroom and led Sir Martin and his men to sound a strategic retreat toward the relative safety of management contracting, partnering and forms of fee-earning construction.

A £7 million reorganisation is under way that is expected to cost many employees their jobs, not least the managing director of civil engineering, Tony Evans, who is tipped to depart next month.

The reorganisation will see the unlikely bedfellows of building, civil engineering and management contracting divisions combined into one neatly packaged unit. Together with clearing away any outstanding contractual liabilities, this can only reinforce speculation that Laing is preparing to sell its construction arm, possibly leading to an orderly break-up of the family construction group.

From all of this it is apparent that the Millennium Stadium project is going to have unusually widespread ramifications. But what has caused it to go so disastrously wrong? Industry sources cite "a catalogue of cock-ups" for which both client and contractor bear some of the blame.

The story begins with a spat between the Welsh Rugby Football Union and the Cardiff Rugby Football Club. The two organisations have neighbouring grounds - so close, in fact, that they share a party wall in one of their stands.

That this wall would be demolished was a given in the design proposals drawn up by WS Atkins, and which were later novated to Laing under the design and construct contract.

In the event, the Welsh RFU failed to win agreement to demolish its neighbour's south stand.

Gareth Davis, chief executive of Cardiff RFC says: "We have an integral stand between the two clubs, and the Welsh RFU told us they wanted to knock our stand down. This is by far the largest part of our ground, so we asked them what the other options were but they had none."

At Cardiff's recent AGM it emerged that negotiations had been underway for two-and-a-half years to solve the problems of the development. It is clear that the club feels the Welsh RFU has been high handed and intransigent, and is now paying the cost: "Eighteen months ago we were told we were not needed and they went away and decided to build around us, but they now have problems," reflects Davis.

The Welsh RFU's decision to 'go it alone' meant Laing cranes could not oversail the Cardiff site. It also meant plans for the new stand had to be redrawn, calling for substantial additional steelwork and concrete to support the retractable roof.

non-performance

But Laing's construction plans - and lump sum price - were contingent on demolition going ahead. It argues that this, and other late design changes, amount to non-performance by the client, and possibly WS Atkins and American architect Lobb.

The case is yet to be proven. Ultimately it may be an arbitrator who apportions blame - and some form of legal action is pencilled in for next year. But whatever the outcome, it is possible to wonder why Laing did not spot such a glaring risk to its construction strategy. Instead, through a combination of naivety, good intentions and eagerness to win a prestige job - it appears Laing simply rushed in to the project without looking hard enough.

A spokesman admits: "Fundamentally we had a design which was not much more than a conceptual scheme against which we made a judgement - and which demonstrated that we made that judgement far too early in the design process."

That is not to say the contractor has no case for additional payment. Laing is adamant it will recoup at least some of its £20 million costs.

Part of its argument will be that the client made other, as yet unspecified, design changes at a late stage.

Meanwhile, industry sources allege that part of the cost overrun is due to Laing's choice of Italian firm Cimolai as steel contractor.

It is a relative newcomer to the UK, with only three major jobs under its belt, and therefore not the most obvious choice for a difficult contract.

Indeed, Cimolai made a less than auspicious start in the UK with the late-running Gade Valley Viaduct, in the final section of the M25. Delays in the completion of the steel bridge in turn delayed the opening of the entire M25. The entire project team was criticised by the National Audit Office.

Cimolai then went on to work with Laing, for the first time, on the second Severn crossing.

It is said that disputes ensued, and it is claimed that as means of settlement Laing agreed to use Cimolai on the Millennium Stadium project.

Both Laing and Cimolai refused to confirm or deny the suggestion. But Laing did state that Cimolai has ISO 9002 quality assurance certification that is recognised by British certification bodies.

This cuts no ice with the UK steelworks fabrication industry, which claims Cimolai does not understand UK construction or standards. A large number of firms within the industry spoke to Laing before it awarded the contract and forewarned that problems would arise."

Such comments may be no more than a predictable attempt at protectionism by UK steel companies. Nevertheless, the Italian steel fabricator is running seven weeks late. However, it is holding Laing to blame and has issued a claim against the contractor for insufficient and delayed design information. Corado Ceresatto, project manager for Cimolai, says in explanation: "It is a very difficult and technical job." However, he refused to comment further.

Last week Laing Construction chairman, David Blair said this claim had now been settled and added that he was hopeful of claiming much of the money back - implying the fault did not ultimately reside with Laing.

Laing's main objective now is to finish the job on time, and so extricate itself without further embarrassment.

The last thing it wants is to be remembered as the bodging builder responsible for sending lucrative World Cup fixtures to France.

A spokesman says: "It will not be entirely complete by June 1999, but that is not the current intention. The intention is that by June 1999 it will be sufficiently complete to allow a match to be played between Wales and South Africa. It will then be progressively completed so that it will be ready for the Rugby World Cup. We are working towards a date in August 1999."

Last week Laing appealed to Cardiff County Council to lift noise restrictions and allow it to work 24-hours-a-day, seven-days-a-week, claiming that the stadium would otherwise be impossible to complete on time.

Meantime, it is trying to minimise the effects on neighbours. A Laing spokesman says: "We have invested in new monitoring equipment, which will reduce noise levels. "The council have also taken up our offer of providing secondary glazing for all neighboring residents," but he refused to put a figure on the cost of glazing.

limitations

The use of extended shift working brings up the issue of compliance with the Working Time Regulations, which has imposed new limitations on working hours. So far there has been no hint of a repeat of the Jubilee Line, where electricians are accused of 'blackmailing' employers on the late-running project.

There is one further thorn in Laing's side, however. The company is also in dispute with the Welsh Office about the £3 million necessary for a river walk which is essential if the stadium is to receive a safety certificate for its 72,500 capacity. The Welsh Office has yet to pay the money because it wants to be represented on the board of the Millennium Stadium PLC.

The Laing spokesman says: "Obviously we can't be happy that we have a project which is going to cause substantial losses. And therefore if we could turn back the clock we would very much like to, but we can't.

"We are looking at the extent to which other people ought to be contributing towards mitigating those losses, and at present we are committed to completing the project."

In the meantime the rugby world watches and waits.