Colchester council removes Banner Holdings from £26m project, but faces law suit for contract breach

Contractor Banner Holdings has been thrown off a Colchester visual arts centre by client Colchester council and is considering legal action for breach of contract.

The development is the latest episode in a saga of problems at the Rafael Viñoly-designed scheme, on which costs have risen from £16.5m to £25.5m.

At the end of 2007, work ground to a halt after specialist Richardson Roofing and glazing contractor Eiffel left owing to technical and funding problems. Banner resumed work last October under an agreement with the council to complete the building exterior for a fixed price of £14.2m by May 2009.

However, the council terminated the contract last week, saying the work was more than 10 weeks behind schedule and some elements were not up to the required standard. The council said there were 10 major problems including the roof, the cladding and guttering.

A key part of the dispute centres on who is responsible for £150,000 of damage caused by gutters that overflowed while the building was empty last year. A clause in the contract made the council liable for any damage while it was left empty.

Peter Elston, managing director of Banner Holdings, said the gutter design was defective and the council should bear the cost.

He said: “The diameter of the outlets is not big enough to take the water off the building.”

If Elston had talked to us about these issues I would have been delighted

Adrian Pritchard, client

Elston added that the council was slow to sign off work. This, combined with the dispute over the guttering, caused the delays and added £250,000 to the cost.

The council said an independent roofing expert had concluded that the gutter design was satisfactory.

Banner, which said the council had refused mediation, is in talks with lawyers about claiming for breach of contract and £600,000 of work (see box, above).

Adrian Pritchard, the chief executive of the council, said Elston had been invited to several meetings but had not turned up.

He said: “If he’d talked to us about these issues I’d have been delighted.”

The council is considering retendering the job as a construction management contract using the same specialists. It does not expect completion until summer 2010.