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Mace in unexpected Shard of Glass return

Laing O’Rourke cools on idea of taking over country’s tallest tower

Mace looks set for a dramatic return to the Shard of Glass in London less than a month after it seemed to have lost the contract to Laing O’Rourke.

The news caps weeks of confusion over who will build the country’s tallest tower, which will stand at 310 m high when it is eventually completed.

Mace’s future on the scheme looked to be over when the Teighmore development team ditched the previous construction management route in favour of a fixed-price deal.

The decision was made after banks told Teighmore they wanted more price certainty on the scheme and were unwilling to bankroll it under CM.

Teighmore, which is led by Sellar Property, asked Laing O’Rourke to look at the scheme, which chairman Ray O’Rourke agreed to do under an exclusivity basis.

But Construction News understands that O’Rourke had cold feet, paving the way for a return by Mace.
One insider said: “Laing has a ‘take it or leave it’ view and there’s plenty of work about, so they don’t need this job at all costs. No one is going to put their head on the block unless the price is right.”

Mace privately insisted it would not take Teighmore’s decision lying down and began putting together a package it thought suitable.

Mace’s proposal will see it carry out the £100 million substructure and groundworks package under CM, with the above ground work, which carries a price tag of £250 million, built under a fixed price.
Teighmore is believed to have contacted Sir Robert McAlpine and Skanska after O’Rourke began to waver but was told by the pair that they weren’t interested Đ strengthening Mace’s position.

One insider said: “The whole thing has been an absolute -fiasco from a PR point of view. It looks like Sellar’s come full circle after turning down Mace, getting Laing on board without signing them up and then getting Mace to carry on what they’ve been doing.

“But you can look it like this. Sellar has got a fixed-price contract for the bulk of the work.”

Mace, expected to have a turnover of £500 million this year, traditionally carries out work under CM and some have wondered whether it has the financial clout to carry out a job of this size under fixed-price.

But one expert said: “They’re doing £250 million on fixed-price which is over something like three-and-a-half years. That’s less than £80 million, so Mace will say it’s not that big a risk for it.”

Demolition work, due to be carried out Keltbray, has still not started because of the funding impasse. Construction is due to take 40 months. It is set finish in September 2011.

Pinnacle provides inspiration

Mace has borrowed what it hopes will be the winning solution to its Shard problems from the building’s rival – the Pinnacle.

Everything up to slab level on this job, which carries a £500 million price tag, is being carried out under construction management – by Mace.

Fixed-price will be used when Multiplex begins main construction work early next year.

The Pinnacle is being planned as the tallest building in the country – until the Shard is built.

Unlike the Shard, the Pinnacle, which will be built at Bishopsgate in the City of London, actually resembles a construction site.

It will stand at 288 m high when it is completed in 2010.

It sometimes pays not to throw in the towel

It pays to be pragmatic in construction. Mace has been put through the wringer in recent weeks after it became clear that its future on the Shard was up, when developer Teighmore said it needed to be done under a fixed-price deal.

Laing O’Rourke was the firm being lined up but it then threw a spanner in the works when it said it might not be too interested in the job after all.

Meanwhile, Mace decided to do something about its impending demotion and put forward a proposal that it thought might work.

It would use construction management for the more tricky stuff in the ground, with the logic being that this method offers more transparency than fixed price in an area traditionally fraught with risk. It could also be cheaper, with firms not overloading their price to take account of unforeseen problems.
Above ground it would use fixed-price, so satisfying those anxious bankers.

The whole thing has been clumsily handled by the developer, of course, but in the end it pays the bills.

Related news:

Mace fights back as Shard looks to fixed-price deal

Funding fear ends Mace’s Shard deal