Land Engineering Ltd – the subcontractor responsible for current Leith Walk Phase 4 improvements between Pilrig Street and McDonald Road – has been put into administration.
In a statement issued to stakeholders this evening, Turner & Townsend Infrastructure said:
Having carried out a comprehensive assessment of the company’s financial stability prior to signing the contract, which did not highlight any concerns, this is unexpected and particularly disappointing.
As part of any assessment the Council seeks a third party credit agency opinion of the risk of business failure, and in relation to Land Engineering the third party opinion did not raise any issues.
We appreciate how frustrating this will be for businesses and residents.
'Frustrating' doesn't come close to expressing how many locals will feel after 10 years of disruption and delay.
Turner & Townsend is now in touch with the administrator to try and make sure the (so far comparatively smooth-running) works on this section of the Walk are completed promptly.
The closure of Brunswick Street scheduled for 5 June will not now go ahead.
Spurtle awaits responses from relevant parties and will report back pronto.
UPDATE (9.45am, 2.6.17)
A City of Edinburgh Council spokesperson told us this morning: ‘Land Engineering, the contractor responsible for carrying out work currently underway on Leith Walk, has been put into administration.
‘This is extremely frustrating for the Council, as this project has been progressing on schedule and on budget, and we fully appreciate how disappointing this will be for businesses and residents too.
‘We are now doing everything in our power to ensure works are finished as close to the July completion date as possible, delivering a better streetscape, improvements for cyclists and pedestrians and essential work to pavements.’
The same spokesperson told us that CEC expects to have a new contractor in place pretty soon, but did not specify a timetable for this process.
UPDATE (1.40pm, 2.6.17)
Insider.co.uk reports that Land Engineering Ltd was bought by a French landscaping firm, idverde, within hours of it being put into administration on 30 May. 'The sale will see 249 staff move to idverde, who have bought the services, responsive and winter divisions, and the firm’s interest in contracts at Grangemouth, Craighouse and Quartermile.
'But 135 have been made redundant with immediate effect, while 10 have been retained to assist the administrators with their duties.'
Follow this link for a list of idverde's landscape services.
UPDATE (5.30pm, 2.6.17)
Leith Central Community Council has posted an adapted communication from Turner & Townsend which it received earlier this afternoon.
We refer to our communication yesterday regarding the Leith Programme contractor being put into administration.
We have now completed an options appraisal and identified an interim way forward that will ensure work re-commences on Monday 5th June. The works will be carried out by a Council framework contractor, Crummock (Scotland) Limited, and will concentrate, in the first instance, in the work sites that are currently partially complete.
As you will appreciate, we are dealing with a complex situation but feel we have reacted as quickly as possible to maintain momentum on the project. We will of course keep you updated as more detailed plans emerge.
Thank you for patience in this matter.
Senior Project Manager, Infrastructure, Turner & Townsend
LCCC is seeking confirmation on two issues: first, that Crummock will save time by continuing to use the Iona Street compound (and the stock inside); second, that the current subcontractor handling traffic signage/fencing/barriers will be able to address problems without delay.
Separately, a City of Edinburgh Council spokesperson tells us the appointment, '… will ensure minimum disruption to the project, and we are confident the remaining work will be carried out as near to the scheduled completion date [July 2017] as possible'.
The new contractor has been secured through CEC's procurement framework so will be subject to necessary financial checks.
Martin Veart (Lib-Dem candidate for Edinburgh North & Leith at Westminster): Wow.
This is a disaster for work currently being undertaken in Edinburgh. What has to be the main focus is the completion of ongoing work while the city seeks suitable partners to take over planned construction. This will not only continue to disrupt travel to the inconvenience of us all, but also continue to affect local businesses. Spare a through too for the workers, and their families, whose jobs are under threat at this time.
Iain McGill (Conservative candidate for Edinburgh North & Leith at Westminster):
Councillor Lewis Ritchie (Leith Walk ward): I am extremely frustrated to learn that Land Engineering has been put into administration, disrupting a programme of investment and improvement to Leith Walk which has up until now been running on time and on budget.
The Council carried out due diligence into the company's finances and found no cause for concern, so this news comes as a shock and a huge disappointment to me personally, and will be a real kick in the teeth to residents and traders who have put up with considerable disruption while these works have been going on.
I will be pressing for a swift resolution to this situation so that disruption can be kept to a minimum and this important and extremely positive £9.1m programme of investment can get back on track as soon as possible
Councillor Susan Rae (Leith Walk ward): I am, like my fellow residents, dismayed by the news that Land Engineer Ltd has gone into administration, leaving Leith Walk in chaos. Once again the people and businesses in our area have been left devastated by yet another contractual failure.
My priority has been, and is, to seek an immediate solution to moving works forward as speedily as possible before investigating the circumstances behind this latest collapse and how the Council can mitigate the damaging effects of these works to our businesses and to the trust of those who live and work Leith Walk.
Harald Tobermann (Vice Chair, Leith Central Community Council): The email announcing that the contractor for the current phase of the Leith Walk repair works (Iona Street to Brunswick Street) has gone into administration came yesterday late afternoon.
There have been indications for a while that work had slowed down, but this latest development has come as a complete shock. We are seeking urgent clarification on how this will impact on the current work sites in various states of completion south of Pilrig Street and the Iona Street compound, and – most importantly – on the overall progress of getting the Leith Walk works completed all the way to Picardy Place roundabout.
We understand that prior to the contract being awarded, comprehensive assessments of the contractor's financial stability were obtained by the Council. This being so, this would be the first time in the 10-year saga of Leith Walk on/off repairs that the Council does not have to shoulder the blame for the delays and costs that no doubt will come in the wake of this latest development.
Whether there will be further reputational damage will depend entirely on how quickly this situation is recovered and the relevant clauses in the contract:
- Is there a sufficiently sized performance bond in place, shielding the project from any financial fallout?
- Is the works documentation up to date to allow work to be picked up smoothly by replacement contractors?
- If the works do not continue in the immediate future with a new contractor and complete before the summer break as planned, will residents and businesses be compensated?
- Will the various work sites be supervised and protected adequately in the meantime?
- Will the snagging of the completed works around Pilrig Street be addressed promptly to restore confidence?
It has been said that one should ‘never let a crisis go to waste’. Is this the wake-up call that was needed to make the reinstatement of one of Edinburgh’s top three streets a top Council priority?
Deidre Brock (SNP candidate for Edinburgh North & Leith at Westminster): People around Leith Walk are pretty fed up with roadworks, so the contractors must resolve this quickly and get the job finished. I've been in touch with the Council and will be keeping an eye on progress here.
Councillor Gordon Munro (Leith ward) and Labour candidate for Edinburgh North & Leith at Westminster: This is extremely frustrating. The work done to date has improved both Constitution Street and Leith Walk. This needs to be resolved quickly for residents and businesses. The contractors, the liquidators and the Council need to work together to ensure continuity and completion of the works. I will ask for this to happen.