Scheme ended up costing more than double its original 拢533m price tag

Balfour Beatty has said it will pick and choose clients more carefully after losing 拢200m on a scheme to build a bypass around Aberdeen.

The 拢533m job, signed as a fixed-price lump sum deal, ended up costing more than double that when it was finally completed early last year.

Aberdeen

The job was plagued by wet weather

The scheme was hit by a series of problems including issues with utility diversions, flooded sites and the collapse of Carillion 鈥� one of the three joint venture firms that signed the contract with Transport Scotland to build the 55 km-long road.

Last month, Balfour Beatty struck a 拢32m settlement with Transport Scotland over the job which its chief executive Leo Quinn called 鈥渁ppropriate鈥� although he admitted: 鈥淚t was a long way short of our expectations.鈥�

He added: 鈥淵ou can never be pleased with losing 拢200m. We have learnt valuable lessons. We will never sign a contract like this again.鈥�

Asked whether he would work for Transport Scotland again, he said: 鈥淭here is a very large market for infrastructure. We do have the ability to choose the right customers.鈥�

The country鈥檚 biggest contractor said it saw a 52% rise in its year-end net cash position to 拢512m with an average monthly net cash position of 拢325m, up from 拢194m.

鈥淚t鈥檚 a nice position to be in, cash is the number one issue,鈥� Quinn said.

But he said contractors were having to store up rainy day money because margins remained so low.

He added: 鈥淭here is still too much risk being passed down to contractors. Terms and conditions need to be less onerous. If industry could achieve standard margins, which I believe are almost double what they are today, we could invest in skills and capital equipment. The industry standard is 2%-3%. We鈥檙e only talking about [getting up to] 4% or 5%.鈥�

The firm鈥檚 order book increased 13% to 拢14.3bn but Quinn said this would be up a further 40% if it included its upcoming HS2 work.

Quinn said it hadn鈥檛 booked in the work 鈥渂ecause the contracts haven鈥檛 been signed鈥� adding that he hoped work on 拢2.4bn-worth of work it is lined up for with Vinci near Birmingham, called the N1 and N2 tunnels contracts, will be signed by the end of June.

Pre-tax profit at the group last year was up 12% to 拢138m. Turnover was 8% to 拢8.4bn.

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