BGN Entrepreneur

Construction companies face losing £3.5 billion of business due to cuts to the school-building programm and have called on ministers to clarify urgently where the axe will fall.
The Government has announced that it will review all contracts signed after January 1 on the Building Schools for the Future program, leaving companies like Balfour Beatty, Galliford Try as well as Kier facing the loss of contracts worth hundreds of millions of pounds each.
According to the Construction Products Association, about £2.2 billion of contracts were finalised in the first five months of the year to build 118 new schools with a further £1.3 billion of deals, or 58 schools, reaching “selected bidder” stage.
Council have already begun to cancle negotiations with construction companies on a further 179 schools, for projects that are still in the pipeline. Besides, more advanced projects at high risk of cancellation are a £600 million scheme to build 6 schools in Somerset, recently won by the British subsidiary of the Dutch company Royal BAM–BAM Construct.
There are fears that the Government could renege on contracts that have been formally signed off, despite having to pay penalties to do so, because the cost of penalty would be less than the cost of going ahead with the work.

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