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Severfield bolt replacement to cost £6m as teams struggle to agree liability

Severfield has announced that replacing the 3,000 mega-bolts installed on London’s Leadenhall Building, popularly referred to as the Cheesegrater, could cost £6m.

The steel contractor has already carried out £1m worth of ‘precautionary’ remedial work replacing the building’s bolts after three fell from the Cheesegrater over the last eight months.

However, it has said that further work in conjunction with developer British Land, as well as Arup and Laing O’Rourke, could now cost an extra £5m and take until the end of the year to complete.

Severfield chief executive Ian Lawson said discussions between the building’s project teams have so far failed to reach agreement on where the liability for the costs should lie.

Mr Lawson told Construction News: “The importance is about making a solution and getting on with the remedial work required. All parties have got on with that work and we are bearing our costs.

“In terms of where the liabilities lie, those discussions are ongoing”.

Earlier this year, British Land reported that one of the building’s bolts had fallen from the 238 m-high building.

This was the second case of a falling bolt in just six months, after two bolts were reported to have fallen from the building in November last year.

According to laboratory tests, the bolts had fractured “due to a material failure mechanism called hydrogen embrittlement,” which caused a “crack growth mechanism” to develop within the bolts.

Mr Lawson said: “The Leadenhall building is particular and unusual and the bolts used are specific for this building and, unfortunately, they have become susceptible to hydrogen embrittlement.

“Although this was evident in a small number of the bolts, all parties agree that it is sensible to change the bolts, so that is what we are doing.”

It is not the first problem Severfield has encountered over its Cheesegrater contract; in 2013, the steel contractor announced it had lost £10m on the project after a contract overrun.

Despite these issues, Severfield has today revealed a turnaround in its financial fortune, announcing a pre-tax profit of £144,000 for the year ending 31 March 2015.

Last year, the company suffered losses of £2.6m before tax over the same period.

This recovery was helped by new contracts, including Manchester’s Ordsall Chord link bridge and Liverpool FC’s Anfield stadium. Its total order book was valued at £194m.

Mr Lawson said: “We are very pleased with the continued good progress made across the business, both in the UK and India, operationally and financially.

“Margin improvement is being sustained, we have a very solid order book and pipeline and we are particularly pleased that we have recommended the reintroduction of a final dividend.”

He told Construction News that the key to this turnaround had been “discipline in processes, management of risk, empowerment of our people and good honest hard work.”

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