Industry Spotlight

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Construction Disputes

Airport near multimillion-dollar settlement with Phoenix

NewsHerald.com

"...[A]n agreement...would keep the litigation between Phoenix [Construction] and the airport out of a courtroom and put an end to verbal and legal battles that marred the $325 million airport throughout its construction...."

"...Controversies over...environmental fines and the proper building of a key stormwater filtration pond...caused Phoenix owner...to sue...claiming he was owed millions of dollars."

"Attorneys...followed with a countersuit after...paying for extra work officials said was the result of either faulty construction by Phoenix or faulty design by engineering firm PBS&J."

SDL seeking return on a portion of cost overruns

Lancasteronline.com

"School District of Lancaster has reached a tentative agreement with an architectural firm to recoup a portion of the...cost overruns incurred on four recent construction projects."

"To date, change orders on those four projects have cost the district an additional $3.2 million...nearly twice the $1.66 million included in the budget for overruns."

"So far, the district has paid for all the changes after negotiating the additional costs with contractors. But SDL contends DLR is responsible for some of that expense because it made errors or omissions on construction specifications."

Old Dunes financial dispute takes new twist with RICO allegations

The Sun News

"A long-running financial dispute between Baiden & Associates, Inc...and Dunes Village Properties LLC...took a new turn last week when the oceanfront condominium developer filed a federal lawsuit accusing the construction firm's owners of fraud and racketeering."

"...Dunes Village Properties says Frank 'Ebbie' Baiden Jr. and his son...have stolen labor and materials from commercial construction projects...to build their personal residences...."

"The Baidens created false invoices...to cover up the theft, according to the lawsuit...."

Construction Costs

Navy: Carrier cost overruns may hit $1.1 billion

Bloomberg News

"The carrier is being built in Newport News by Huntington Ingalls Industries under a cost-plus, incentive-fee contract in which the Navy pays for most of the overruns...."

"...[T]he Navy's program manager indicated that the 'most likely' overrun had risen to $884.7 million, or about 17 percent over the contract's target price of $5.16 billion...."

"...[T]he Navy...is trying to assure lawmakers and Pentagon officials that costs of major vessel programs are being controlled....The service has already offered to delay by two years the construction of the second Ford-class vessel, the CVN-79 John F. Kennedy."

Tab for I-287 grows again

LoHud.com

"State records show that the cost of the 15-year-old road project went up by an additional $365,955 in the last three weeks of 2011, the latest in a long running pattern of pricey cost overruns and delays."

"The new increases nudged the total price tag for the lingering road project to $621.5 million, more than $78 million and about 14.5 percent over budget."

"The new 'change orders'...included both reductions and increases in cost on the two final stages of the work. The bottom-line result...is a six-figure increase in the cost to taxpayers."

Construction Delays

Opening date for 9/11 Museum unrealistic, says Mayor and Daniels

Downtown Express

"...[N]ext Sept. 11 is no longer a plausible deadline for the museum's opening, since disagreements surrounding the project's financing have caused construction delays...."

"Specifically, the Port Authority of New York and New Jersey is demanding $156 million from the 9/11 Memorial for overruns in museum-related construction costs...."

"...The 9/11 Memorial Foundation, in turn, claims it is not liable for the extra costs and is demanding approximately $140 million from the Port Authority for expenses caused by delays in construction...."

Rotana sees building glitches delay launch of Oman hotel

ArabianBusiness.com

"The 5-star hotel, which will offer 400 luxury rooms and suites upon completion, was slated to open in the fourth quarter of this year, but will now delay its debut to 2013...."

"The hotel operator said Wednesday it would open seven hotels this year rather than the eight initially planned, representing an investment of $750 [million]...."

"The revised construction schedules were the result of building delays and not difficulties in securing project finance...."

Construction Defects

Larimer County to receive $14.8 million settlement for defective fairgrounds buildings

The Coloradoan

"Larimer County officials have settled a lawsuit over design and construction problems with metal buildings at the county's fairgrounds complex, The Ranch, for $14.8 million."

"The settlement includes the Neenan Co., which was the general contractor for The Ranch project, as well as...the manufacturer and designer of the defective buildings...."

"The suit stemmed from the collapse of a portion of the roof at the First National Bank Exhibition Hall following a pair of blizzards in late 2006. An investigation revealed defects in the design of the building."

Keystone inspector alleges shoddy work on original pipeline

The Globe and Mail

"...Mr. Klink says he raised a series of concerns about alleged substandard materials and poor craftsmanship along the Keystone pipeline."

"The Indiana man says he was fired...as a result....Mr. Klink says the company began treating him as a 'problem inspector' culminating in one supervisor angrily ordering him to quit before he got fired."

"'Cheap foreign steel that cracked when workers tried to weld it,...fudged safety tests,...and siting of facilities on completely inappropriate spots like wetlands,' he wrote."

Construction Management

Federal oversight is spotty on $40 billion in highway spending

The News-Messenger.com

"The federal government spends about $40 billion a year on highway construction, yet...it does not track how many [projects] are over budget...."

"The result is a patchwork of planning lapses and design errors that consume limited dollars, a Gannett investigation shows."

"An analysis this year...found slightly more than half of state contracts ran over budget and 45 percent finished late. The study looked at contracts from 2001 to 2010 in 39 states...."

Construction Economics

Plenty To Worry About In Construction

Forbes

"The beleaguered construction sector got some positive news...when the Commerce Department reported that November construction spending totaled $807 million, the highest level since June 2010. But plenty of uncertainty remains for the industry."

"...The biggest monthly increases came in private single-family and multi-family housing categories, and in public office, health care and power construction projects."

"But private construction spending on commercial projects fell for the fourth month in a row, and spending on manufacturing construction declined for a third month...."

Industry Spotlight

Major Pipeline Construction Moves Energy through Eastern Hemisphere

The Eastern Hemisphere continues to be a hotbed for construction as multiple countries aim to expand trade and economic routes with major pipelines in the works. Countries such as Russia and Turkey are vying for energy independence, against the rival Nabucco pipeline, as they rush to build both the South Stream and Anatolia pipelines. Meanwhile, Middle Eastern countries have over $1 billion invested in the new Gulf terminal and a multi-billion-dollar export pipeline in Abu Dhabi nearing completion. Read on to learn about these and other pipeline plans coming to fruition.

Putin brings forward building of South Stream pipeline

Agence France-Presse

"Prime Minister Vladimir Putin...brought forward to 2012 the date for starting construction of the South Stream pipeline that aims to deliver Russian gas to Western Europe while avoiding Ukraine."

"Putin's announcement marks an acceleration...for building the hugely ambitious pipeline and comes after Moscow won agreement...to lay the pipeline under Turkish waters."

"...[T]he total cost of the pipeline was estimated at 16.5 billion euros...-- 10 billion euros for...the pipeline across the Black Sea and 6.5 billion for its construction on land."

Anatolia gas pipeline races towards reality

Asia Times

"Competition in the Southern Gas Corridor from the Caspian Sea basin to Europe continues to heat up, with more details about the Trans-Anatolian gas pipeline emerging...."

"The Trans-Anatolian pipeline (TAGP),...will run from Turkey's eastern to its western border....Azerbaijan's energy minister...signed the Memorandum of Understanding (MoU) for TAGP construction, fixing its 'initial' volume at 16 billion cubic meters per year...."

"While the TAGP has symbolically been started already, real construction is scheduled to begin in 2012 and finish by 2017, when the gas from the offshore...deposit is...available for shipment...."

Iraq to export oil from new Gulf terminal in February

Reuters

"Iraq plans to start shipping crude from the first of its three new offshore export terminals in the Gulf at the start of February, a move that will boost its export capacity by 900,000 barrels per day...."

"Iraqi officials had expected to open the tap at the first of three new single-point moorings (SPMs) on Jan. 1 but testing of new export pipelines has not been completed."

"Iraq's $1.3 billion export expansion project in the Gulf includes the construction of two undersea pipelines and one onshore pipeline, as well as four single-point moorings...."

Habshan-Fujairah oil pipeline 'will be ready within six months'

Gulf News

"An oil export pipeline from Habshan in Abu Dhabi to Fujairah that will bypass the strategic Strait of Hormuz will be ready by the middle of 2012...."

"The commissioning of the $3.3 billion (Dh12.11 billion), 370 kilometre Habshan-Fujairah pipeline will take place within a month...."

"The commissioning of the 1.5 million-barrel-per day pipeline was scheduled to take place late last year. However, delays in material deliveries and construction-related issues pushed the deadline back...."

S.Africa's Transnet launches $2.9 bln fuel pipeline

Reuters

"South African logistics group Transnet started operating a new multi-product fuel pipeline...although it will take until 2013 to reach intended capacity."

"The entire project includes the pipeline, a network of smaller inland pipelines, pump stations and associated terminals at a total cost of around 23.4 billion rand ($2.9 billion), more than double an initial forecast of 11.1 billion rand."

"Once all facilities are ready in 2013, the new line will carry petrol, diesel and jet fuel at a capacity of a million litres per hour, which can be tripled to meet rising demand...."

Shell plans oil pipeline construction from South Sudan to Ethiopia

NewsDire

"The Royal Dutch Shell is planning to construct an oil pipeline line all the way from South Sudan to Ethiopia....[A] business delegation from Shell visited South Sudan in November...."

"...The delegation that met senior South Sudan government officials expressed Shell's interest in acquiring an oil exploration area in south Sudan and construct[ing] an oil pipeline that can haul crude oil from South Sudan oilfields to Ethiopia's Gambella region."

"Sources said Shell's plan is to acquire an oilfield...adding that Chinese firms could be involved in the project...."

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