This Is Guernsey

By Natalie Harrison

THE States is owed £400,000 by Miller & Baird, the company which built St Sampson’s Marina, said Public Services minister Bill Bell.

The company had been claiming more than the original contract price. In a letter sent to States members updating them on the financial status of three outstanding capital project contracts, Deputy Bell gave the unexpected news.

‘With the final certificate now issued, I can confirm that we are in the unusual position where the contractor actually owes the States monies,’ he said.
‘Taking into account various issues such as prepayments made in the early stages of the contract, penalty payments for late completion, legal costs and the money due in respect of the contractor’s occupancy of the St Andrew’s reservoir industrial site, the States is owed in the region of £400,000.

‘Steps are now being taken to seek recovery of these monies.’

The marina had a contract value of £3,416,381. The total certified by the engineer was £4,090,656.

Miller & Baird’s claim, which was disputed by the States, was for £7,114,330.

It is expected to comment today.

Deputy Bell added that the marina was proving to be both popular and good value for money.

‘Income from the moorings in St Sampson’s has risen from £15,000 in 2004, the last year prior to the marina being completed, to £294,000 in 2007.’

Further berths were being created which would produce additional income.

But disputes over the two other projects remain unresolved.

Deputy Bell said that the original contract price for work on the New Jetty, approved by the States in November 2001, was £2,554,973, a figure subsequently revised upwards without setting a fixed price.

The then Advisory and Finance Committee was given authority to agree revised figures.

To date, contractor Balvac has been paid £4,256,963. In April 2007 it had lodged a claim for £27.3m.

‘The States’ legal and consultants fees to date amount to £3,679,036,’ said Deputy Bell.

‘A large part of this has been spent in defending the claim of the contractor, preparation for the States counterclaim in respect of remedial works and preparing for remediation and arbitration.’

Mediation is scheduled for the second week of July, with an arbitration hearing expected to start in January should mediation prove unsuccessful.

The States filed its defence and counterclaim to Balvac’s claim on 31 March.

‘In the meantime both parties, being acutely aware that as each month passes the significant legal costs of preparing for arbitration continue to mount, are using every effort to explore whether there is any cheaper resolution of the matter,’ said Deputy Bell.

He said that discussions were continuing which had allowed both sides to understand the other’s case more clearly and as a minimum ought to enable some issues to be resolved prior to arbitration.

No payments had been made since June 2005.

A spokeswoman for Balfour Beatty, Balvac’s parent company, said that as discussions were ongoing it was inappropriate to comment.

He could not say much about the dispute over the cost of the airport terminal because of the possibility of legal action by the States.

But his department had taken advice from the Law Officers and independent specialists and had written to the consulting engineers who were responsible for the mechanical and electrical design seeking compensation for losses arising from the delays the project suffered.