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- January 2012
- In This Issue:
- Industry Spotlight
- Construction Disputes
- Construction Costs
- Construction Delays
- Construction Defects
- Construction Management
- Construction Economics
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Corporate Headquarters
One Riverway, Suite 2350
Houston, Texas 77056
713.626.2525
713.626.2555 (fax)
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Construction Disputes
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Airport near multimillion-dollar settlement with Phoenix
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NewsHerald.com
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"...[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."
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SDL seeking return on a portion of cost overruns
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Lancasteronline.com
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"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."
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Old Dunes financial dispute takes new twist with RICO allegations
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The Sun News
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"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...."
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Construction Costs
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Navy: Carrier cost overruns may hit $1.1 billion
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Bloomberg News
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"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."
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Tab for I-287 grows again
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LoHud.com
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"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."
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Construction Delays
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Opening date for 9/11 Museum unrealistic, says Mayor and Daniels
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Downtown Express
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"...[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...."
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Rotana sees building glitches delay launch of Oman hotel
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ArabianBusiness.com
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"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...."
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Construction Defects
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Larimer County to receive $14.8 million settlement for defective fairgrounds buildings
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The Coloradoan
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"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."
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Keystone inspector alleges shoddy work on original pipeline
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The Globe and Mail
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"...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."
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Construction Management
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Federal oversight is spotty on $40 billion in highway spending
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The News-Messenger.com
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"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...."
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Construction Economics
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Plenty To Worry About In Construction
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Forbes
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"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...."
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Industry Spotlight
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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.
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Putin brings forward building of South Stream pipeline
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Agence France-Presse
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"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."
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Anatolia gas pipeline races towards reality
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Asia Times
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"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...."
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Iraq to export oil from new Gulf terminal in February
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Reuters
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"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...."
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Habshan-Fujairah oil pipeline 'will be ready within six months'
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Gulf News
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"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...."
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S.Africa's Transnet launches $2.9 bln fuel pipeline
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Reuters
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"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...."
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Shell plans oil pipeline construction from South Sudan to Ethiopia
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NewsDire
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"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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