Problem jobs hit Hochtief with £3m loss

Civil engineering contractor Hochtief, which is building the Broughton Bypass near Preston and a new lifting bridge over the Manchester Ship Canal, has blamed “a small minority of projects” for a £3m pre-tax loss in its full-year results.

The contractor posted a pre-tax loss of £3.2m for the year to 31 December 2016, compared with a pre-tax profit of £918,000 a year earlier. Turnover at the company rose to £155m, up from £133m in its previous results.

Two of the contractor’s projects in the North West have been beset with delays in the last 18 months.

Hochtief is currently completing final works to the delayed £32m Broughton Bypass in Preston, which was opened earlier this month after a series of delays and cost overruns.

Construction work began on the scheme in January 2016. The project’s original completion date was spring 2017, but this was pushed back to August 2017. This date was then delayed again to spring 2018 in July this year. Owing to good weather, Hochtief was able to bring forward the revised opening date to October this year.

The project had also reported a hike in cost with its initial value of £24m rising to £32m due to “unforeseen costs increases and payments”, with reasons for the cost increase including the redesign of drainage, challenging ground conditions, and the collapse of an embankment.

The contractor is also on site at the £30m Western Gateway Infrastructure Scheme for Peel, which includes a mile-long dual carriageway link to Trafford Way and a bridge over the Manchester Ship Canal.

A 100-tonne section of the project’s lifting bridge next to the Barton Bridge collapsed in May last year during a weight test after cables supporting the structure snapped. The bridge is designed to be lifted by the cables to allow ships to pass beneath. Nobody was injured during the incident.

The Western Gateway, which is being delivered in a joint venture with Buckingham Group, will now be delivered around a year late.

It was originally due to complete by December 2016, but according to Peel, it will now complete “by the end of 2017”.

The contractor appointed Lawrence Jackson as its managing director in August this year. Previous MD Sally Cox stepped down the same month after two years in the role.

Hochtief has been contacted for comment.