Carillion dropped from £15m Welsh office deal

Carillion has been dumped from a £15m office job in Aberystwyth, Wales, despite being lined up to build an identical block next door for the Welsh Assembly.

It was made preferred bidder last October for the administrative block, but has been thrown off by client Ceredigion County Council following a row over rising costs.

Carillion National Building is due to be confirmed within days to build a £20m office next door to house Welsh Assembly officials.

The same contractor was appointed in an effort to save taxpayers' cash by allowing the two sites to pool design ideas and resources.

Carillion was dumped from the Ceredigion scheme after cost estimates jumped from £15m to nearly £20m.

A Carillion source said the increase was due to rescoping. "Our original price was based on 2006 figures, but the job's scope has increased since then and it won't be completed until 2009 so we had to factor in a significant increase in costs."

It is understood that Carillion tried to save the Ceredigion scheme by re-engineering parts of the building in a bid to get the costs down.

One source said the final price was "nearer £15m than £20m", but the council refused to go above its original budget.

A Carillion spokeswoman added: "There was an increase in scope required by Ceredigion County Council over that laid out in their invitation-to-tender document. A great deal of value engineering was undertaken to achieve the most economic solution. We are therefore disappointed not to be proceeding to the construction phase having spent the past 10 months developing a design solution in collaboration with the council."

The council will now re-open the tender race to the unsuccessful bidders who made the original shortlist, including Pochin and E Turner.

One local contractor said: "We've heard that it's going to be retendered using Carillion's original designs, which should be interesting."

A Carillion source said: "It looks like we will get a confirmation very soon that we have won the adjacent Welsh Assembly job.

"The decision has been made and we are just waiting for one of the officials to come back from holiday to sign it."

(Contract Journal, 8 August 2007, p 4)

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