Jobs on hold pass £7bn as almost 900 schemes hit
More than £7 billion-worth of construction work has been pulled at the tender stage during the past year, according to new research.
Glenigan’s exclusive job delays survey for Construction News shows that 889 schemes, worth a combined total of £7.1 billion, have been stopped after clients started procurement.
The delays include projects that would have provided tens of thousands of homes. Projects pulled during the tender stage range from a £1 million scheme for 10 houses at Carnforth in Lancashire, where Clement Dickens and VE Pinington had returned bids, to a £30 million mixed development at Baker Street in London, which Bam Construct and Galliford Try had priced.
Cancellations at this stage are a bitter blow for contractors, where staff will have spent time working on bids ranging from filling out a pre-qualification questionnaire to full price quotes that estimators spent many working days putting together.
On many of the projects mothballed during the tender process, contractors are unlikely to receive any form of compensation.
Contractors working in Scotland have suffered the most amount of wasted time, with 114 projects mothballed after procurement started.
In terms of total work pulled during the tender process, the most work lost came in London and the North-west, where clients pulled the plug on work totalling £1.4 billion and £1 billion respectively.
The largest number of projects being chopped during procurement and before a contract award was made is in the private residential sector, where 205 proposals, worth nearly £2.4 billion, have been stopped.
These 205 projects would have provided 15,290 homes. Another 58 social housing projects, valued at £777 million and set to provide 6,673 units, have also been scrubbed from the in-trays of estimators across the industry.
The sector next hardest hit in terms of number of projects is the industrial sector, with 134 projects cancelled or delayed.
With warehouses traditionally costing less than projects in other sectors, the total value of work gone, at £349 million, is relatively low.
The second largest amount of work lost in value terms during the tender stage was in the office and commercial sector, with 124 proposals worth a total of £1.1 billion put on hold or cancelled so far this year.
During the past week, 148 projects with a total value of £978 million were shelved, compared with 114 schemes with a total value of just under £1.1 billion in the preceding week.
By Steve Menary
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