Shelter Hall overruns

In light of the collapse of nationwide contract Carillon, it is prudent to examine how the costs of construction can overrun to the point where they cost more than forecasted.

Why is it that in the construction world, everything seems to cost more and take longer? Building contractors have had years of experience at cost estimation, yet the oft-quoted excuse is the lack of supply or staff, or some other excuse which presumably could not have been anticipated. You would think that with many years of experience in the construction industry, companies could at least factor this costs in foresight so that the cost quoted at the start is accurate over the course of projects.

All this highlights a problem within the construction industry. The quotations offered to councillors who approve such projects are deliberately low to secure approval, yet once approval has been obtained they balloon to their true size, or even an estimate, which cannot be gone back on because the contracts have been signed, or the structure is already have in place. But could you imagine if you ordered spaghetti from a restaurant, that you would have to wait longer for your food, and on top of that the restaurant tells you that the spaghetti is in shortage and therefore you would have to pay more and wait longer for the same bowl? Why do we accept this in construction?

The work to rebuild Shelter Hall in West Street is now forecast to cost twice as much and twice as long. Shouldn’t it be the case that contractors who don’t adhere to their own estimates of time and cost should bear the brunt of the extra cost themselves? The problem is that after subsidies to cover the extra rising costs from the original cost of ten million pounds, there is still a two million pound shortfall to fund the project that must come from the city coffers, or Brighton residents will end up with a half-finished mound of eyesore.

It is almost as if we build projects with the expectation that they will overrun, and we sign them off with blank cheques of money and time. We need a revamp on the construction system; contractors need to provide final cost estimates and timeframes when submitting for tender, and any shortfall should be met by them, as it impacts on the town’s infrastructure. We cannot have projects overrunning, doubling in cost, with the extra monies going to line the pockets of directors. It is a sad unethical abuse of the system.

Amex and its links with Brighton

Amex House, the nine-storey, 300,000 square foot office block, was designed by Gollins Melvin Ward and cost a reported £10 million. It was built over part of Mighell Street, and a number of other streets disappeared under the building, including Boss’s Gardens. The building, nicknamed ‘The Wedding Cake’, was officially opened on September 15 1977 as the European customer service HQ of the American Express Corporation.

The company had previously used sites all over Sussex, but first moved into the Edward St area in 1968, when it moved its Mechanical Accounting centre to the Virgo Walker building.

Amex is now the city’s largest private sector employer, with more than 3,000 staff, and contributes 7% of the city economy, worth about £300 million a year. This explains the jitters that went around the city when, in 2008, it was feared that the company would move elsewhere, as it needed bigger, better premises.

Possible new homes were said to be Crawley, Exeter, Scotland or somewhere in mainland Europe. However, in September 2008, Amex confirmed it would not be moving from Edward St.

Instead, it applied for planning permission to create a new 265,000 sq ft building behind Amex House, which would be demolished by 2016.

The new building will have between five to nine floors, plus two basement floors, new vehicle access off John Street. There will be 106 car parking spaces and 132 cycle parking spaces on the site.

In May 2009, Amex reached an agreement with the council, which agreed to sell the firm the freehold of the land in Eastern Road to carry out the redevelopment of the site. The deal included a clause which requires the company to make a long-term commitment to basing its operations in Brighton.

Amex will build a new office block on its car park site, bordering Carlton Hill. The company owns half of the historic Mighell St farmhouse which needs restoration.

On November 4 2009, Brighton and Hove City Council’s planning committee voted unanimously in favour of the proposals. One of the conditions of the Amex plans is that a £300,000 donation is made to Carlton Hill Primary School, which will have its playground overshadowed by the extension. The money will allow the school to relocate its playground and revamp facilities.

As well as saving the Amex jobs, it was estimated that the £130 million redevelopment would also sustain 75 non-Amex jobs and could create more than 1,000 construction jobs.