Legal wrangle over delays to new school

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A DISPUTE between the consortium who built three new high schools at Duns, Eyemouth and Earlston and Scottish Borders Council has prompted the council to set aside £100,000 for potential legal costs.

Scottish Borders Education Partnership, who built the three schools, are believed to have submitted a compensation claim against the council alleging that a sub-contractor lost money because there was a delay by the council in providing permissions for a power supply to cross land or sub-leases to Scottish Power.

A council spokesman told BBC Scotland last week: “The parties have been exchanging information on the merits of each of their respective cases. If no resolution is found the claim may proceed to arbitration or other dispute resolution procedure as agreed by the parties.

“The council appointed advisors to review and defend the claim.”

This week SBC added: “We anticipate a resolution shortly.” Scottish Borders Education Partnership declined to comment.

At last week’s meeting of SBC’s executive councillors agreed the transfer of money to the legal and democratic services under the budget heading of ‘third party payments’. In a report to councillors by the chief financial officer the reason for the transfer of money was given as: “pressure in legal and domestic services due to legal claim costs to be funded from reserves.”

SBEP was chosen by SBC as its preferred bidder in 2006 to finance, design and build Berwickshire, Earlston and Eyemouth high schools under a £60m Public Private Partnership.

Four partner companies came together to form SBEP - the lead partner is construction group Bilfinger Berger (75% stake holder), the other main partner being John Graham (25% stakeholder), a major construction group with a track record in both school and public sector projects.

When it was announced in 2006 that they had been awarded the contract to build the schools, bid director for SBEP, Bruce Dickinson of Bilfinger Berger, said: “We are now looking forward to continuing this partnership and to turn designs into reality with the new schools opening by August 2008.”

However, it was February 2009 before pupils at Berwickshire High School could move into their new building, and Eyemouth pupils took up residence in their new school a month later. In August that year Eyemouth High School was damaged by heavy rain that leaked into the first floor level of the building and seeped through light fittings.

Bilfinger Berger were also the contractors appointed by Edinburgh City Council to design, construct and build the troubled new tram line in the city. It had an initial budget of £545 million to go from Edinburgh airport to Newhaven. But the cost grew steadily, reaching more than £830m after delays and a dispute between contractors Bilfinger Berger and tram company Tie. The dispute with Bilfinger Berger was said to centre on disagreements over the design of the tram line and paying for delays in moving gas, water, telecoms and electricity services away from the tram route in the city centre.

Last September the council agreed a new deal with Bifinger Berger, and Transport Scotland stepped in to help manage the much-reduced scheme due for completion by summer 2014, at a cost of £776m.