Work is continuing on th e construct ion of mixed-use Birmingham project The Cube despite the project’s developers entering administration last month.
The Birmingham Development Company (BDC) and its contracting arm BuildAbility were forced into administration after credit negotiations collapsed.
However, administrators PricewaterhouseCoopers (PwC) last week said they wanted to finish
the project to get maximum value from the asset.
A spokeswoman confirmed there was about four months of work left on the scheme, and that the current set of subcontractors would continue to be used and paid to finish the project.
Mechanical and electrical contractor Mitie is one of a group of firms who will continue at the site. A PwC spokeswoman confirmed: “Mitie are signed up to our terms and are working on site.”
However, she refused to reveal the value of the deal struck to complete the work.
In August 2008, Mitie secured the £14.5 million contract to provide M&E services at The Cube for BuildAbility. The 26-month contract covered all services throughout the 23-storey development, including the automated underground car park and the rooftop restaurant.
The Cube is a 23-storey tower comprising 135 apartments, more than 10,000 sq m of offices, retail, a hotel and other leisure facilities.
The directors of BDC said in a statement they were “bitterly disappointed” at not being able to agree a deal with their lender, Lloyds Bank, “particularly when the project is so close to completion”.
They added: “[We] had no alternative other than to request that Lloyds Bank appoint administrators – which has now been done.
“It is a sad day for The Cube, an ambitious project for Birmingham, into which we have put five years of our lives, but like many development projects across the UK, it has succumbed to the pressures of the global economic downturn, which followed the credit crunch.”
Mark Batten, Matthew Hammond and Peter Spratt of PwC were appointed joint administrators.
In December, BuildAbility was forced to pay more than £1.2 million to concrete subcontractor O’Donnell Developments after a lengthy legal row.
Disagreements over valuations,extensions of time, loss and expense led to nine adjudications between the two companies. O’Donnell dragged the dispute into the High Court in November after BuildAbility failed to pay a sum of £1,229,393 that was found to be owed in the pair’s two most recent adjudications. The court ruled in O’Donnell’s favour.