Beset by nightmarish construction difficulties, the transformation of Bankside power station to the new Tate gallery looks set to be completed on budget – and may even meet its 18 June deadline.
Posters for exhibitions of modern art are not what you expect to find on the walls of a site office. But then, Tate Bankside, where these posters adorn construction manager Schal's reception, is no ordinary site. Originally designed by Sir Giles Gilbert Scott – the man behind the classic red phone box – Bankside Power Station on London's South Bank is being converted to the world's largest modern art museum.

From the Thames, nothing much looks to have changed in the 20 months since construction began, even though a lightweight, two-storey glass box has been added to the roof. Inside, however, the building is buzzing (although the vast scale of the place is such that it looks deserted). More than 500 workers are locked in a seemingly impossible race against time. Practical completion is just over 70 working days away and the inner walls of the turbine hall, which forms the southern half of the building and will become the gallery's six-storey entrance hall, are still covered with scaffolding. Meanwhile, miles of cable trays and ductwork are being installed in what is effectively a new, seven-storey structure being created inside the old boiler house that forms the northern half. The boiler house has been gutted and five storeys of structural steel constructed. The five floors and two glass penthouse floors will form the exhibition space.

The scale of the works is amazing. "It's more like a production line than a building site," says project manager Stanhope's Andy Butler, who is running the scheme. When the 35 000 m2 of drywalling was installed, huge runs of plasterboard and studwork were laid out along the floor and the 120 drywalling contractors whizzed up and down on 40 "flying carpets" to reach the 30 m high roof of the turbine hall.

Although it looks far from finished and he still has £20m of the £70m total construction budget to get through, Butler is confident that the 11 000 m² gallery will finish on time. Given the project's track record to date, this might seem surprising.

The Tate Gallery of Modern Art at Bankside has had no fewer than three false starts. The original start date of June 1997 had to be put back eight weeks when the demolition contractor discovered asbestos – even though the building had been sold with a certificate saying it was asbestos-free. "We had to put the brakes on Birse, which was about to start building the concrete entrance ramp," says Butler.

Despite its widely publicised conversion to non-confrontational contracting, Birse managed to argue an extra £200 000 out of the construction budget because it was delayed getting on site. "The original contract was for £1.8m, but eventually we settled at £2m when Birse overran by two months because of the delay." The second false start was when the roof of the 152 m long, 24 m wide turbine hall was condemned. The original plan had been to replace the existing rooflights and heavy-metal framing with a lightweight bespoke rooflight system, to bring more natural light into the hall. But, when contractors got up on the roof, they found extensive carbonation of the concrete. All of it had to be removed.

A new plan was hatched to keep the £750 000 turbine roof package within budget, says Butler. Stanhope and Schal, together with architects Herzog de Meuron and Sheppard Robson, redesigned the roof and settled on an off-the-shelf rooflight system combined with a Trocal single-ply flat roof.

Because the roof work was more substantial than originally planned, work below had to be rescheduled. Fortunately, only one contractor – Birse – was on site at this early stage. It was able to work on the substructure at one end of the building while roofing work was carried out at the other.

The third false start involved the £5m steelwork package. Trade contractor Rowen won the competitive tender to install the 5000 tonnes of structural steelwork that creates the seven-storey "building within a building". But, after four weeks, Rowen realised it had drastically misjudged the complexity of the contract.

The problem was how to manoeuvre girders from the delivery point in the turbine hall in the south side of the building, through the existing steelwork, to the northern half. Rowen's original plan involved using two mobile cranes to lift girders from the hall and swing them into position, but the cranes' telescopic arms restricted movement, and progress was slow.

"All credit to Rowen – it held its hand up and said there was a problem," says Butler. "So, we sat down and worked out a solution." To assist progress, two luffing cranes were installed at the boundary of the turbine hall and the old boiler house. This meant that steel could be moved in from the river side of the building. But, even with the added cranes, Rowen finished the 15-week contract 12 weeks late.

The slow progress on the steelwork programme caused a major headache for Stanhope and Schal. The project needed major rescheduling and each trade contractor had to be consulted to make sure it could still find the necessary capacity to come on site later or condense its programme. "It took us about a month to reprogramme," says Butler. Rowen footed the bill for its overrun, and reprogramming costs came from the project's £7m contingency fund. "Thanks to goodwill and common sense, reprogramming only cost £200 000," says Butler.

Despite the complex internal structure of the power station, Stanhope did not foresee the steelwork problem. Rowen bid on standard commercial rates, as did other bidders such as William Hare, says Butler. If one bid had been substantially larger, the alarm would have been raised.

Schal managing director Malcolm Bairstow says refurbishment projects are always full of surprises. "You never know what's going to leap out and bite you," he says. "It's a testament to the quality of the team that we're still on budget and in programme." Although Butler and Bairstow have come through the problems smiling, Harry Gugger, project partner with architect Herzog de Meuron, is less happy. "I don't enjoy the site," he says bluntly.

His biggest beef is with the quality of work on site. "Things are carelessly put together and there are problems with how the site looks. Switzerland is paradise in comparison – the quality of craftsmanship is far better. In Britain, I meet workers who were employed yesterday and will be gone tomorrow. How do the contractors know how good they are? In Switzerland, workers go through an apprenticeship and work for companies continuously." Gugger has also had problems with the way the site is managed. "I am used to talking directly to trade contractors," he says. "Here, you have to go through the construction manager. Some of my instructions have been compromised." But he does understand that talking directly to contractors can have legal complications.

Working with Schal has been another problem area for Gugger. Schal has used three different project managers in the 20 months the project has been on site. "Each time you lose key staff, you lose knowledge from the project," says Gugger.

Schal rejects Gugger's criticisms. Bairstow says: "It's unusual to keep one manager on such a long project for its duration." As for the criticism that Schal did not want the architect to talk to trade contractors, he says: "It's no problem having the architect talk directly to the trade contractor, as long as we co-ordinate it." The Swiss architect does not share Butler's confidence that the project will come in on time. "There's no way they can make the date," he says. "It will run past the deadline by a few weeks." Fortunately, the man who will manage the gallery when it opens in May 2000, Lars Nittve, is not losing sleep over the prospect of a delay. A long period has been left for the building's internal environment to settle and for retail and restaurant areas to be fitted out. It will never be as hairy as Gehry's Guggenheim in Bilbao, he says. "That was still a building site two weeks before it opened to the public."

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