Holdfast Training Services Trial Blog

Prior to Covid-19 hitting the UK, the One Nine Elms (ONE) site in London was operating at 600-650 operatives each day. Running two jump forms, pre-stressed slabs, facade installation, large raft slab pours, demolition, blockwork the site was in full swing.

When Boris announced that we all must stay at home, Multiplex (Principal Contractor) assessed the situation and took the decision to shut the site until such time as mitigation measures had been put in place to make the site as safe as possible. Significant time was spent re-configuring the canteen and welfare areas to allow social distancing rules to be adhered to. When site opened back up on 20 April, it was running at 50-70 operatives for the first week with phased increases in subcontractor numbers on site to safely manage the new measures.

A mere three weeks after returning to site, Multiplex took the decision to cease works, this time due to non-payment by the client – the monthly valuation was priced at just shy of £13m. Thankfully this closure was short lived as the client paid up after only 2 working days lost on site.

Fast forward to now. Last Monday 29 June, notice was issued to all subcontractors and consultants of our intention to suspend works due to non-payment of the client, come Sunday night no payment had been made, resulting in a cessation of works on site at COP Monday 6 July.

Speculation within the project team has been made as to the cause of the non-payments. Some think that this is part of a strategy by the Chinese client (R&F Properties), I think this unlikely as these stoppages are likely to cause delays to the programme and, in the form of loss and expense claims from subcontractors, significant excess costs. The delays to the programme are only exacerbated by subcontractors being unable to mobilise operatives quickly following the recommencement of works. Numerous subcontractors have already warned of delays of up to six weeks before they would be able to achieve full strength on site.

My estimation is that, more worryingly, R&F are facing significant cash flow issues. R&F owns four development schemes in London valued at £4.5bn, of which One Nine Elms is likely to top out at £1bn. With these significant costs and with delayed payments becoming a worrying trend, it will be “interesting” to see how this situation plays out. With the number of projects in the UK and Australia backed by Chinese investors I’m curious if anyone else has faced any issues recently, or if I’m just the lucky one?