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Shepherd quits Berners Hotel project

Shepherd Construction has abandoned the refurbishment of the prestigious Berners Hotel after claiming it was struggling to obtain regular payments for its work.

The York-based contractor this week told Construction News it was withdrawing from the central London job following weeks of unsuccessful resolution discussions.

The £31 million project had already stalled last summer in a row over payment.

Shepherd walked off of the site “for a short period” in June after Berners missed two interim payments worth a total of almost £2m.

Although that matter was resolved, Berners - owned by international hotel group JJW Hotels and Resorts - has failed to meet subsequent agreed payment dates, Shepherd claims.

A spokeswoman said: “Due to difficulties obtaining consistent payments from our client we have unfortunately determined the contract and will be ceasing our construction activities at Berners Hotel with immediate effect.”

She said Shepherd’s subcontractors, including large M&E firm NG Bailey, would likewise be leaving the project but would be paid for their work to date. NG Bailey refused to comment on the troubled scheme.

Other subcontractors on the site, located just off Oxford Street in London’s West End, include Essex-based brick and block contractor Regency Brickwork, and Hillingdon carpenters JA Scott.

Shepherd took Berners to the High Court last June, claiming two interim payments were left unpaid for more than 24 days after their due date.

This was despite clauses in the contract stating Berners would have to inform the contractor five days before the deadline if it was to withhold any or all of the money.

The dispute was settled out of court, but Shepherd turned to the courts again in December following further payment problems.

Just before Christmas it won a default judgement worth more than £1.5m.

Shepherd said it could not confirm whether it had yet received payment following the judgement, nor could it comment on whether there were any further legal claims pending against Berners.

The firm was appointed in May 2007 to lead an upgrade of the hotel, including demolition works, structural alterations, extensions and the fitout.

The JJW website describes the work being undertaken at the Grade II listed Berners as an “ambitious… and extensive refurbishment programme”.

The upgrade includes alterations to centralised mechanical and electrical services, with restoration of elevations, partial infilling of three lightwells and the provision of new guest rooms on the seventh floor.

Following delays caused by the payment issues, it is unclear how much work is left to complete on the scheme.

Business intelligence unit Glenigan reported that Galliford Try, Kier, ISG and Renew Holdings subsidiary Walter
Lilly all bid for the job when it originally went out to tender.

JJW did not return calls requesting comment.