Aberdeen City Council has spent more than £230,000 on consultants to defend compensation claims from contractors working on the new incinerator in East Tullos.
The £150 million Ness Energy from Waste plant was fired up for the first time in February and is due to be fully operational later this year – delayed from the initial August 2022 completion date.
Positive Covid tests among the workforce of main contractor Acciona and its subcontractors have been blamed as one of the reasons for the delay.
Now it has emerged Aberdeen City Council hired “dispute experts” GPW UK on a one-year contract totalling £234,000 to defend compensation claims from the firms to keep the matter from progressing further.
Once fully operational, the incinerator will generate power from heat and electricity from about 150,000 tonnes of rubbish collected in Aberdeen, Aberdeenshire and Moray every year.
What were incinerator contractors wanting compensation for?
Reports to Aberdeen City Council have outlined the contractors want compensation for extra costs and delays that arose during the Covid pandemic.
These include the effect of restrictions on staff movements and working arrangement, impacts on the supply chain with delays to the delivery of materials to the site and issues with the recruitment of suitably-trained staff.
Delays and extra costs to construction projects during the Covid pandemic were common across the industry due to site shutdowns, reduced workforces and supply problems.
In early 2021, Moray Council warned it was facing a “substantial” compensation claim due to delays building the new Lossiemouth High School.
Consultants called with ‘extreme urgency’
Notices published by Aberdeen City Council say GPW UK was hired without a prior call for competition due to the “extreme urgency” of the situation.
The local authority warned the consultants were needed to prevent to dispute going to adjudication.
A spokeswoman added: “These contracts were awarded directly using the procedure for award of a contract without prior publication of a call for competition, which is used when unexpected issues arise that need immediate supplier support.”
A report for the council’s finance and resources committee in February said the claims brought so far have been “successfully defended”.
Meanwhile, further talks have been opened in the meantime to resolve the matter without further the need for further arbitration.
In the meantime, some incinerator compensation claims are continuing to be met by Aberdeen City Council but officers say these ones can be accommodated within the existing project budget.
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