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  • Writer's pictureSafer Highways

Balfour sells off stake in problematic Aberdeen bypass

Balfour Beatty has sold off its stake in the problem-hit Aberdeen Western Peripheral Route.

Balfour Beatty announced that it had sold its stake in the Aberdeen bypass to a subsidiary of BBGI Global Infrastructure S.A along with its interests in Woodland View Hospital and North West Fire & Rescue.

A company spokesperson said that the sales are in line with Balfour Beatty’s “strategy of optimising value through the disposal of operational assets, whilst continuing to invest in new equity opportunities”.

As part of a JV, Balfour Beatty’s role on the Aberdeen Western Peripheral Route encompassed the design, construction, financing, operations and maintenance of 12km of the existing and upgraded roadway as well as 47km of new dual carriageway including two significant river crossings.

The scheme was built by Aberdeen Roads Limited (ARL), originally a JV between Balfour Beatty, Carillion and Galliford Try in a design, build, finance and operate deal. The clients were Transport Scotland, Aberdeen City Council and Aberdeenshire Council.

The project had to overcome numerous obstacles. Opponents went all the way to the Supreme Court to get it scrapped. Construction finally started in 2015, six years after being formally approved in 2009. Problems also included delays caused by bad weather from the Beast of the East last year which slowed construction. There were also technical issues with the River Don Crossing which delayed the opening by around 13 months.

The JV also encountered difficulties with services diversions involving more than 300 water pipes, electricity cables and overhead lines and gas pipes.

The worst flooding in the region since records began also hampered work.

But the most significant impact on the project was the collapse of Carillion at the beginning of 2018. After this, Galliford Try and Balfour Beatty were obliged to complete the rest of the contract funding shortfalls resulting from Carillion’s liquidation shared equally.

Ultimately the cost of the project come in at more than £1bn, having originally been costed at £745M.

After lengthy and tense negotiations with Transport Scotland both Balfour Beatty and Galliford Try agreed to respective £32M cash settlements to cover some of their losses on the job.

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