An Aberdeen business leader believes the withdrawal of a main contractor from the city’s harbour expansion could open the door for a local firm to finish the job.
The £350 million Nigg Bay development’s principal contractor, Dragados UK, pulled out yesterday after protracted discussions with Aberdeen Harbour Board over the best way forward.
The announcement came just days after a contract for the completion of unfinished works was put out to tender.
A letter from the harbour board’s chief executive Michelle Handforth to stakeholders, seen by the Evening Express, cites “significant challenges” the project is facing as a result of ferry, cruise and oil and gas operators reducing activity because of Covid-19, and the effect of low oil prices.
It also blames delays to the project because of coronavirus, which hindered construction of a number of key components including the South Breakwater during the summer season.
But Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, said the news could present a north-east firm with a chance to step into the breach and complete the job, which is due to finish next year.
He said: “This is one of the key infrastructure investment projects that is going to form part of the next phase of our region’s economy and it is absolutely vital that this is delivered as close to the original timetable as possible.
“Clearly there had been some challenges on the project latterly and what we are hearing about today is probably a fair way of both parties saying that 70% of the work has been completed, that the 30% that is left is very specialist and there are probably other suppliers out there with better skills to take this project over the line.
“It is obviously a tender which is publicly available and a chance for local suppliers perhaps to play a part in finalising this key project for the north-east.”
Despite Mr Borthwick’s optimism, Aberdeen City Council co-leader Douglas Lumsden said the news was “the last thing the city needs”.
Earlier this year, the local authority announced plans to create an energy transition zone around the new harbour.
He said: “This is a huge blow for Aberdeen and for all the people working on the project.
“It is worrying times for the city and we really need support from both the UK and Scottish Governments because the energy industry is taking a big hit at the moment.
“This is inevitably going to mean delays to the project. It will take time to get a new contractor on board and get them bedded in and up to speed.
“When we are looking at things like energy transition, this is the last thing the city needs.
“There needs to be a support package put in place because the energy sector has taken an absolute battering recently.”
Dragados will officially withdraw from the site on Monday (June 15), at which point the harbour board will take full responsibility.
A spokesman for Dragados UK said: “Dragados UK is proud of the progress achieved with this project but the Covid-19 emergency and other factors have meant that our involvement in the project has ended earlier than originally anticipated.
“We wish the project every success as it progresses towards completion.”
Ms Handforth insisted the harbour board is continuing to meet the terms of its funding arrangements.
However, she warned a “prolonged reduction in revenue” such as the Covid-19 shutdown could “erode monies allocated for the project”, and confirmed the organisation is liaising with the Scottish Government.
Ministers have been urged to step in and provide support for the scheme, which is viewed as having national importance.
Labour MSP Lewis Macdonald said: “The expansion of Aberdeen Harbour is a hugely important infrastructure project for the north-east and for Scotland as a whole.
“The current Covid-19 crisis has had an impact both on the main contractor, a global company which is withdrawing from the project on Monday, and on harbour board operations and income from the existing North Harbour.
“I have written to transport and infrastructure secretary Michael Matheson seeking his reassurance that the Scottish Government remain committed to this project, which will provide key infrastructure to the benefit of Scotland as a whole.”
Conservative Liam Kerr added: “The development is an exciting new chapter for Aberdeen and the Scottish Government must realise the importance of the project to the city, ensuring everything is done to support its delivery in finding a new contractor.
“This is a time where we must stand up for Aberdeen during this difficult period and the Scottish Government must sit up and take note of the difficulties the city is facing.
“Not only will this project help accelerate the north-east’s aim of being at the forefront of the world’s energy sector, the development will be huge for the city’s cruise market and tourism sector.”
A spokeswoman for the Scottish Government insisted it would work to ensure the project is completed.
She said: “We will continue to work with regional partners to ensure the projects within the Aberdeen City Region Deal are delivered and bring about the inclusive and sustainable economic benefits intended.”
Aberdeen South MP Stephen Flynn, meanwhile, said he had been encouraged by the harbour board’s commitment to seeing the project through.
He said: “This project is of national importance and it is absolutely vital that it is brought to completion.
“It’s been an open secret that Dragados may not complete the works and having already discussed this matter with the Harbour Board, I was reassured by their commitment to the project.”