Royal Exchange Theatre “indignant” over contractor’s claim for £2.7m on £900 000 job.
A row has broken out between Birse Construction and its client on the £32m lottery project to refurbish the Royal Exchange Theatre in Manchester.

Birse has lodged a writ at the High Court against client Royal Exchange Theatre, and it is understood that the contractor is claiming £2.7m – three times the contract sum of £900 000.

Birse was contracted by construction manager Mace to carry out building work on the theatre redevelopment, which was completed in 1998. This included structural repairs for damage caused by an IRA bomb in 1996 and refurbishment work.

The project ran £1.3m over budget. Royal Exchange Theatre project manager Michael Williams said the cost overruns were partly down to the tight schedule, which required contractors to work extra hours to an accelerated schedule. He also attributed the extra cost to “certain changes thought necessary to make the building work better – details in the technical areas like cooling and ventilation”. Williams rejected Birse’s claim. He said: “The theatre is absolutely indignant. It believes it has valued all the work fairly and that it will stand up to a study by any other party. It is absolutely determined only to pay a reasonable sum to settle this claim.”

Martin Peat, managing director of Birse’s building division, confirmed that it had issued the writ but was not prepared to comment further.

Birse issued the writ two days before it was due to participate in mediation proceedings instigated by the Royal Exchange Theatre to resolve the issue.

The dispute between the theatre and Birse was not resolved by the mediation. However, the client did reach an amicable arrangement through mediation with the other outstanding claimant on the project, architect Levitt Bernstein.

Williams said all the consultants and contractors always knew the programme would be tight. He said: “Birse’s programme was meant to be six or seven months and they almost doubled it.” He said that some of this could be attributed to changes demanded by the client at the end of the project and delays in supplying information. However, he added: “The majority of the problems were due to changes in their management, their own inability to staff the job and to get subcontractors to work for them.

“One gets all sorts of strange messages from Birse. It is clear they have put in as large a claim as possible to try to get the most back. They have consistently failed to supply information to back up what they are claiming,” he said.

The project was funded by insurance money claimed because of the IRA bomb, and £23m from the Arts Council, plus a top-up grant of £927 000.