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Contractor claims work on Aberdeen south harbour expansion was ‘completely finished’

Work continues on the Aberdeen South Harbour
Work continues on the Aberdeen South Harbour

The lead contractor that pulled out of the £350million Aberdeen harbour expansion project last summer has made the bizarre claim that the work was “completely finished” when it left, in recent documents filed at Companies House.

Concerns over the completion of the project were raised in June last year when Aberdeen Harbour Board (AHB) confirmed Spanish-owned Dragados UK would no longer be involved, despite work not being finished having been hit by delays due to weather and the impact of Covid-19.

AHB then launched a procurement process to complete the final 30% of the development.

Work left to do so far costs over £60m

Since Dragados’ surprise departure from the project, AHB has announced a number of contracts worth over £60m, including the installation of a breakwater and a “wave wall”.

Work continuing at the Aberdeen Harbour expansion this month.Wullie Marr / DCT Media

Accounts for Dragados UK, which is owned by Spanish infrastructure giant Actividades de Construcción y Servicios (ACS Group), said that its “key objective was the completion of the AHEP (Aberdeen Harbour Extension Project) on the 8th of June”. It said that the project was 72% complete by the end of December 2020 and simply added that: “The project is completely finished.”

Lower profits for Dragados

The strategic report, which was signed by Dragados UK boss Javier Teulon Ramirez, also suggested that the completion was agreed on a lower price. It said: “The expected gross margin of the project was reduced after the agreement with the client the 8th of June 2020.” This date was also when a settlement agreement between Dragados and the AHB was reached, the accounts said.

The company’s annual report and financial statements to the year ended 31 December 2019 do not include details of the final finances of the project, although it offers some information following the year end including to the abrupt end of the contract.

Dragados UK did not appear to have another job to go to

In his statement, Mr Ramirez suggested the company was not overburdened with jobs elsewhere in the UK as a reason for ending the contract in June. He said the company expected its “level of activity to decrease” following the “completion” of the harbour extension work. He added that the company would “continue to bid for the design and execution of large infrastructure construction projects as they are put to tender”.

The accounts show that revenue from contracts, the largest of which was the harbour expansion, was £73.9million in 2019. The accounts were dated 21 May, 2021.

Harbour’s plea to fund green infrastracture

Further questions over the completion of the harbour expansion came just last week, when the AHB issued a plea for funding in order to ensure they could afford to include planned green infrastructure, such as clean fuels and electrified quays.

In a letter to stakeholders, including senior city councillors, the board’s chairman Alistair Mackenzie revealed the coronavirus outbreak had “eroded funds” set aside for the expansion and without external funding it will “no longer be possible” for the development to include green infrastructure.

AHB has committed to a vague “phased opening” of the South Harbour development, with full completion now not expected until 2022.

Bob Sanguinetti, the current chief executive of the UK Chamber of Shipping, will take over from AHB’s chief executive Michelle Handforth in September. She is taking on a new job as managing director of Network Rail’s Wales and western England region.

Aberdeen Harbour Board declined to comment. Dragados UK, which is based in London, did not respond to calls while ACS Group did not respond to queries.