Exclusive: Galliford Try faces legal action from Olympic subbies

Galliford Try is facing legal action from subcontractors looking to claim more than £11m as a result of problems on the final phase of the £700m London 2012 athletes’ village project.

Building understands three subcontractors - concrete specialist Reddington and envelope contractors Prater and MPG - have begun legal action in relation to issues arising from delays on the final two plots of the village, N13 and N26. Building understands claims could amount to more than £11m.

A fourth subcontractor, scaffolder Benchmark, is understood to be in negotiations with Galliford Try over a further sum, believed to be about £2.5m.

The two plots - together worth £80m and representing 14 blocks and 423 units according to construction data company Barbour ABI - hit delays from the outset of the project.

Last year Building revealed the overall athletes’ village construction manager Lend Lease missed the original handover date of 31 October for the plots to the Olympic Delivery Authority (ODA).

The plots were finally handed over to the ODA on 12 December, although sources close to the project said work to overcome snags and defects was ongoing.

The ODA said work on the plots was “temporarily stopped” shortly after construction began in summer 2010 to investigate an accident on the site, but added that nobody was injured.

It is understood one of the subcontractors is already involved in adjudication with Galliford Try, while the other two have brought in lawyers to work on claims.
Galliford Try’s construction business turned over £499.9m in its first half results to 31 December and made a profit of £10.9m over the period.

The firm, which is listed on the London Stock Exchange, declined to comment on whether the disputes would have an impact on forecasts for its performance.

In a letter Galliford Try sent to one of its subcontractors in December, seen by Building, the contractor stated its intention to “recover and deduct” monies from  the subcontractor arising from its alleged failure to complete subcontract works and other alleged “snags and defects”.

A Galliford Try spokesperson said: “Galliford Try is currently involved in discussions with several subcontractors on the athletes’ village project.

“We are unable to comment further until these differences of opinion are resolved.”

Prater said it was “looking to negotiate” a solution with Galliford Try. A Benchmark director said the firm was “making every effort to resolve our differences”. A spokesperson for Reddington said “we never discuss commercial issues”. MPG declined to comment.