Kajima leaves Accordia PFI housing project after first phase.

Troubles mounted for contractor Kajima this week as it emerged that it had left a PFI housing project in Cambridge after the completion of the first phase.
Kajima is no longer working on the Accordia PFI project, after reaching an agreement with developer Countryside Properties before Christmas.

It is understood that after Kajima failed to complete the first phase of the 380-unit scheme on time, and that Countryside decided to proceed with an alternative contractor, yet to be decided.

The initial plan was that Kajima would build the rest of the scheme, which is due to be completed next year.

One senior industry source said that Accordia was “eating money” for Kajima because of the delays. The source added that Kajima had found the project “challenging”.

He said: “Kajima does not have much experience of building homes in the UK and it is a more challenging task than building an office block.”

Kajima joined forces with Countryside on the scheme because it had already built government offices for the East of England on the site.

The news emerged as industry sources speculated this week that Kajima’s UK business was facing big losses for the financial year to 31 March 2006, on top of the £80m that it lost in the previous financial year, mostly on PFI projects.

It is also understood that Kajima has taken a significant hit on the Health and Safety Executive headquarters in Bootle, Merseyside.

It had yet another setback in October when Arup told residents at the Joseph Rowntree Foundation’s Caspar housing block, built by Kajima in Leeds, that their homes could collapse in severe weather.

Building revealed last April that Kajima had made an £80m loss on UK PFI school projects, which the company confirmed when it announced its results for the year to 31 March last May.

And in November, Building revealed that Kajima’s UK managing director, former Jarvis man David Evans, was planning to wind down the company’s construction work in the UK and concentrate on PFI investments.

It is understood that Kajima is part of a consortium bidding for the Building Schools for the Future project in Lewisham, south-east London, but as an equity investor rather than a contractor.

Kajima UK has a turnover of about £100m though its Japanese parent has sales in excess of £5.8bn.

Kajima declined to comment.