Cost of £154m Olympic stadium conversion job could rise by as much as £50m due to the complexity of installing the new stadium roof

Olympic Stadium

The cost of Balfour Beatty’s £154m Olympic stadium conversion job is set to soar by as much as £50m due to the complexity of installing the new stadium roof.

Balfour Beatty won the £154m contract to carry out the conversion of the London Olympic Stadium into a home for West Ham football club in January.

The contract also included the £41m job to transform the stadium roof - won by the firm last year - which when completed will be the largest cantilevered roof in the world, covering every stadium seat.

But now it has emerged that due to the complexities of installing the new roof, Balfour Beatty is seeking as much as £50m on top of its £154m contract from the London Legacy Development Corporation (LLDC), which is responsible for the development of the Olympic Park

According to a source close to the situation, there is a variable element in Balfour Beatty’s contract that relates to the strengthening works that needed to be undertaken on the existing structure in order to accommodate the new roof.

“The cost of that came in slightly higher than originally envisaged and now the parties are in negotiations over a settlement for that additional cost,” the source said.

The source said Balfour Beatty was seeking as much as £50m but the settlement was expected to be “well below” this figure.

It is understood that a settlement is expected “soon” and the issue has not impacted on the work timetable, with the job expected to be completed in summer 2016, after a pause for next year’s Rugby World Cup.

“All sides want to get it agreed and move on and finish the work,” the source said.

A spokesperson for E20 Stadium LLP, the partnership that is managing the stadium, said: “The project still has close to two years to run and we are in no doubt Balfour Beatty can deliver the programme as planned.

“This is a complex project and there are always ongoing discussions about specific elements within it.”

Balfour Beatty declined to comment on the issues with the Olympic stadium.

It is not clear if the Olympic stadium job is one of scores of problem jobs that led to Balfour Beatty issuing a £75m profit warning last month, its fifth profit warning in less than two year.

Balfour Beatty has refused to say exactly how many problem projects have contributed to its profit shortfalls, but it has said there are 25 problem projects in its M&E business alone and a “handful” in its major infrastructure business, with six problem jobs in its major building projects business.

But as Building revealed earlier this month, one the problem projects that has contributed to Balfour’s profit shortfalls include Balfour’s flagship hotel for Citizen M in central London.

Mace is project and programme manager on the stadium transformation project while Buro Happold is structural engineer and the architect is Populous.

The Olympic Stadium will host five matches during the Rugby World Cup 2015 and will be the permanent home of West Ham from 2016.

The venue will also become the new national competition stadium for athletics in the UK as well as hosting elite international athletics events and other sporting, cultural and community events.

A new community athletics track will also be provided next to the main stadium.

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