The Week That Was – 12 April 2024
Welcome to the week that was, a round-up of key events in the construction sector over the last seven days.
The Health and Safety Executive (HSE) issues guidance on the transitional building control regime for higher-risk buildings
The HSE has published two pieces of guidance on the transitional building control regime for higher-risk buildings (HRBs) in England, effective from 6 April 2024, namely:
- Transitional building control approval for new HRBs; and
- Transitional building control approval for work on existing HRBs.
The aim of the guidance is to ensure a smooth transition from the old regime into the new regime. The guidance addresses transitional arrangements that determine which HRBs work can continue under the old rules and which work must transfer to the Building Safety Regulator.
For HRBs work to continue under the old rules, three conditions must be met:
- an initial notice must have been given to a local authority, and not rejected, or full plans must have been deposited with a local authority and not rejected;
- the local authority has been notified that HRBs work is sufficiently progressed by 6 April 2024; and
- the approved inspector which gave the initial notice has become a registered building control approver before 6 April 2024.
The new guidance can be found here.
Adjudicator lacked jurisdiction as matter decided in previous adjudication
In Engenda Group Ltd v Petroineos Manufacturing Scotland Ltd [2024] CSOH 36, Lord Young held that the adjudicator lacked jurisdiction and the adjudicator's decision was reduced.
Engenda contended that the adjudicator was not entitled to find that Petroineos could plead a right to set off a claim for unliquidated damages in a fourth adjudication (to defeat Engenda's claim for payment of its final account) as the adjudicator had decided in a previous adjudication that Petroineos's claim for damages had not been proven.
The court had to determine what the adjudicator actually decided in the third adjudication and whether that was the same or a similar dispute as the one he was being asked to determine in the fourth adjudication.
Lord Young agreed with Engenda and considered that the adjudicator's reasons in the fourth adjudication "did not stand up to scrutiny" and he was "clearly wrong" in his comparison of the issues for decision in the two adjudications. In his judgment, Lord Young analysed the English authorities, including Waksman J's judgment in Lewisham Homes Ltd v Breyer Group plc [2021] EWHC 1290 (TCC) and Stuart-Smith J's judgment in Hitachi Zosen Inova AG v John Sisk & Son Ltd [2019] EWHC 495 (TCC).
The judgment can be found here.
Positive signs for the construction industry in the UK
Construction activity rebounded in March 2024, following six months of decline, reaching 50.2 on the Purchasing Managers' Index (PMI), which indicates expansion and the general health of the industry. The increase, reported by S&P Global, was the most significant since August 2023, and has seen new job creation accelerate and subcontracting rates rise notably. Construction sector administrations also decreased in Q1 2024 when compared to the same period last year. Despite these positive signs, the industry remains cautious that sustained recovery requires fundamental changes which may be yet on the horizon, and which will be a challenge for the next Government. These include a potential reduction in corporation tax and increased political stability, particularly in the real estate sectors, where the UK is having to compete with other countries for investment.
More details on the figures can be found here.
Multiplex emerges as frontrunner in 50 Fenchurch Street project
The scheme to build a new tower at 50 Fenchurch Street in the City of London, designed by Eric Parry Architects, first obtained planning permission more than three years ago and is due to be completed by the first quarter of 2028. Now, it appears that Multiplex has pipped rival Mace to the post in a bid to win the deal to build the tower. Multiplex is also eagerly awaiting the announcements on the £250m deal to revamp the offices at 75 London Wall (currently occupied by Deutsche Bank) and the scheme to develop the former Government building in London Victoria that was home to the Department of Business, Energy and Industrial Strategy. One subcontractor told Building magazine that “It’s 99% certain it’s off to Multiplex". The formal announcement is expected imminently.
More details can be found here.
HS2 sources steel from nine countries in the last year
As the Department for Business and Trade published a breakdown of public steel procurement for 2022/23, it has emerged that contractors working on the High Speed 2 (HS2) project bought steel from nine different nations. Almost £160m worth of steel was purchased by HS2 contractors (representing a third of total Government spend on steel) from France, Germany, Spain, Portugal, Italy, Poland, Belarus and Turkey in addition to some production from the UK. UK Steel estimates that around £15m of the steel procured from abroad could have been produced domestically and hopes that more UK steelmakers can continue to offer more steel to UK Government projects provided that they can demonstrate their capability and capacity to support the green energy transition.
More details on the data can be found here.
First phase of River Tees deep water quay complete
The first phase of a £114m deep water quay has completed the first phase of construction with operations set to commence this summer. The quay is part of the South Bank heavy lift quay at Teesworks, one of the Government's planned special economic zones with relaxed customs and tax rules to encourage investment. This project in particular will serve South Korean firm SeAH Wind’s £450m manufacturing facility, allowing monopiles to be shipped out to North Sea offshore wind farms. The project which was managed by Faithful+Gould and AtkinsRéalis is looking for a potential operator of the quay in time for summer with Teesworks operations director Garry O’Malley stating, "There's a real demand for facilities like this".
More details on the project can be found here.
Authors for this week's edition: Tom Butterfield, Tom Cameron and Georgina Haynes
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