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Kier faces legal fight over concrete cracking

NEWS - Subcontractor maintains it has limited exposure on Bournemouth job because the issue is design

KIER and its concrete subcontractor CV Buchan are locked in a legal row over the financial fallout of the failed car park at the Castlepoint shopping centre in Bournemouth.

Spalling and cracking in precast concrete elements led to the closure of the 3,000-space car park last Christmas for emergency propping work, causing chaos for retailers and shoppers.

Kier has now admitted that the car park will have to be completely rebuilt.

But it emerged this week that Kier could end up bearing most of the repair costs under its design and build contract with client Castlepoint Partnership.

Amec subsidiary CV Buchan told Construction News the firm is only liable for 10 per cent of costs caused by design problems over its £6.1 million subcontract with Kier ? just £610,000.

A CV Buchan spokesman said: 'Liability under Buchan's £6.1 million design and build subcontract is clear: it is limited to 10 per cent of the contract sum for the design, which makes up the vast major ity of this issue.

'We are confident this is a strong contractual position. Kier is the main contractor and the issue is in their hands to resolve.' A Kier spokesman said: 'We have a different view from Buchan, but it is not our policy to comment.'

Sources close to the project said CV Buchan has already spent between £2 million and £3 million on repairs to the car park since it was completed at the end of 2003.

One insider said: 'The cost of totally rebuilding the car park could easily top £10 million. The original £6.1 million was at 2002 prices, so inflation alone will take that to nearly £7 million.

'When you factor in demolition costs for the existing building as well you will get a much larger figure. The car park is the size of two or three football pitches ? there will be enormous complexities around demolition and reconstruction.' Kier is planning to begin work on the reconstruction of the shopping centre in phases next year to minimise disruption to trading.

It said: 'Kier are confident they will be protected from any material financial consequences resulting from these issues by the insurance arrangements which are in place.' The project source said: 'There is a risk that Kier will be hurt by this even with insurance in place, because they will still have to pay the excess.' Panic selling by Kier investors as a result of the Castlepoint problems saw the company's share price fall from a near record high of £17.50 last week to £15.60 on Tuesday.