Wates is in line to complete the £200 million east London housing development that has been on hold since Ardmore Construction Group Ltd (ACGL) entered administration in June.
Hackney Council’s cabinet heard that the Surrey-based developer and builder would be appointed through a contractor framework operated by Notting Hill Genesis. Wates would take over the remaining residential works at the Britannia Masterplan.
ACGL was appointed in July 2023 to deliver 51 homes for social rent, 30 shared-ownership homes and 290 homes for sale. The residential income was intended to help fund the first stage of the wider scheme, which included a new leisure centre, school and public realm.
However, ACGL entered administration on 11 June this year, bringing construction to a halt.
Around six months of work remains on the project. A report to Hackney Council’s cabinet warned that it was “now critical to work with a new contractor” to restart construction.
Hackney Council major capital projects delivery lead Justin Feltham and Britannia Phase 2b project director Hayley Craig outlined a series of urgent measures to get work moving again.
“The main risk to cost escalation on the project is the time taken to recommence the works,” they warned. “Contingency planning has thus focused on being in a position to move forward with a replacement contractor as soon as the administration process has allowed.”
As part of its contingency planning, the council contacted 14 contractors to assess their potential response to an insolvency on the project.
The exercise found that contractors were unwilling to compete through a mini-competition because of the complexity and risks involved in taking over an abandoned scheme. However, several were interested in working directly with the council.
The council’s selection criteria included financial strength, experience of similar developments, previous experience rescuing projects following insolvencies, framework availability and a willingness to work collaboratively.
“Following further contingency planning discussion and due diligence, the council decided to progress discussions with Wates Construction with a view to entering a preconstruction services agreement (PCSA) in the near future,” Craig and Feltham said.
“A construction contract will subsequently be recommended to the Cabinet Procurement and Insourcing Committee for approval as soon as possible but no later than the autumn.”
Wates has already taken over management and security of the site.
The council said further work with Wates and the supply chain over the next three months should provide greater clarity on costs, programme timescales and the future sales strategy.
However, the administration of ACGL means the scheme can no longer be delivered within its previously approved £196.9 million capital budget.
“The immediate costs of reclaiming and securing the site, auditing the structural integrity of works completed to date, and mobilising Wates Construction Ltd under a PCSA will inevitably escalate the baseline delivery cost.”
Hackney Council’s cabinet has approved a revised budget for the scheme, although the new figure has not been made public.