Bam’s loss-making Co-op Live job now off the books, firm’s group chief executive confirms

Bam has said its loss-making contract to build the Co-op Live Arena in Manchester is now off its books.

The group’s chief executive Ruud Joosten told Building the firm had completed final contract negotiations with client Oak View Group earlier this month.

“It’s all sorted,” Joosten said. “It’s out of the portfolio. We’re very happy. It’s an excellent building but it’s had some issues.”

The job hit the headlines in spring last year when a series of opening deadlines came and went with gigs by Take That, Keane and comedian Peter Kay having to be pulled before it finally opened in the middle of last May.

Later that month, Tim Leiweke, chief executive of the Oak View Group, the American operator behind the venue who co-own it with City Football Group, which also owns Manchester City, said Bam has “lost a lot of money” on the job,

Earlier this year, Bam said 2024 losses at its construction arm had hit £40m with the bulk of those believed to relate to Co-op Live.

Joosten declined to say how much money the firm had lost on the job but confirmed it was “millions and millions”.

He said the firm had slipped up by agreeing to doing the job as a lump sum deal. “The form of contract which we accepted for a complex arena [was a mistake]. The complexity of [the job] was underestimated. The complexity of the building with the M&E was a big challenge.”

>> See also: ‘A nightclub on a massive scale’: touring Populous’ £365m Co-op Live arena

>> See also: ‘I’m here as a change agent’ – Bam’s construction boss on Co-op Live, doing the right things and… dealing with snakes

Joosten added that other issues which hit the job were subcontractor failures along with the Manchester weather and admitted the firm had signed up for the job “when perhaps we didn’t have work in that part of the country”.

“It’s had an impact,” he said. “It’s reaffirmed our idea of how we should run this business. We’re not involved in that kind of contract [anymore].”

He was speaking as the firm’s construction business returned to the black in the first half of this year with the firm posting an €8m (£7m) profit in the six months to June from a €15m (£13m) loss last time.

Joosten said the firm was still committed to the UK building market, promising to be “selective” in the sort of jobs it bids in the future. These include health and education schemes, frameworks for repeat business and mid-size hospital jobs worth around £100m. “Construction is a very important part of the business [but] we’re not attracted to sexy buildings with a high-risk,” he added.

Meanwhile, the firm’s civils business posted flat profit of €47m (£41m) on turnover up 16% to €919m (£799m) in the first half with Joosten saying the firm was looking at more infrastructure work such as rail and energy jobs.

He added the firm’s Dutch headquarters had been kept up to speed with the UK arm’s decision to stop working with labour supplier Danny Sullivan on jobs “where compliance issues have been identified”.

Joosten said: “We have regular meetings with the UK management. This was discovered and we took action. We’re looking very carefully at compliance and if [it’s not being met] we stop immediately.”

Bam’s group turnover increased 7% to €3.4bn (£3n) in the first half with adjusted earnings up 40% to €176m (£153m).