Cost of fixed-price project has gone up from £365m to £450m, Oak View Group boss admits

The boss of the Co-op Live has said main contractor Bam has “lost a lot of money” on the Manchester job, which finally staged its debut show last night.

Tim Leiweke, chief executive of the Oak View Group (OVG), the American operator behind the venue who co-own it with City Football Group, which also owns Manchester City, told the Manchester Evening News: “Are we spending more than anyone anticipated originally? Yes, but it will be worth it. The original cost was £365m and it’s now over £400m.


Source: Shutterstock

Bam built the arena, pictured last summer, under a fixed-price deal

“OVG and City Football Group, including our contractor and what they’ve had to put in in losses, we will spend close to £450m privately. The contractor [Bam] lost a lot of money on this job. This job cost them more than anyone ever expected.”

Bam signed up for a fixed-price deal when it won the job three years ago but Leiweke declined to comment on the amount in financial penalties the firm might be on the hook for.

“That’s between us and Bam,” he told the MEN. “Bam has been honourable, they’re finishing the project, they didn’t try to duck out here, they’ve taken it on the chin, their stock got hit, it’s a public company, I have great admiration for Bam and the job they’ve done here.

“Bam got hit hard, they’ve lost a lot of money on this job, I feel bad for them, they’re doing the best they can. Some things we could have expected, some things were unexpected.”

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In a separate interview, Leiweke told the FT that OVG was “not litigious” and added it would “sit down and settle up” with Bam “when the time comes”.

Building revealed two weeks ago the job was running 24 hour shift patterns and had 800 people working on it to get it ready for last night after missing a series of openings. The entire scheme is not due to be fully complete until later this year with areas such as hard landscaping outside the venue still to finish.

Leiweke said claims the venue knew it would be late back in February were wrong. “That’s not true,” he told the MEN. “The fact is, two weeks ago we were ready and then the air filter happened.”

Part of an air conditioning unit fell off during a sound check ahead of the planned opening gig on 1 May by US rapper A Boogie Wit Da Hoodie, causing a series of shows, including those by Keane and Take That, to be cancelled.

Leiweke told the FT that the job also had trouble finding enough workers to complete it towards the end, adding: “We were paying people two and three times and we couldn’t find people to work, it was crazy.”

Bam declined to comment.