Amey prepares settlement after £32m legal claim over Sheffield roads scheme delays

The contractor running controversial highways work in Sheffield is preparing a settlement after a £32m legal claim was made over project delays by a road resurfacing firm.

The Amey highways contract in Sheffield is due to run until 2037.
The Amey highways contract in Sheffield is due to run until 2037.

Amey has been involved in the £2bn Streets Ahead project to improve and upgrade Sheffield’s roads, pavements and street lights since 2012, but the 25-year PFI contract with Sheffield City Council that is part-funded by the Government has become associated with protests surrounding the policy of felling thousands of street trees and replacing them with saplings as part of the work.

It has now emerged that Amey is involved in litigation with construction firm Aggregate Industries, which initially made legal claims amounting to £32m but is now recalculating the amounts involved ahead of a potential settlement.

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Details of the dispute have been revealed in the annual report of Amey’s parent company, Spanish infrastructure giant Ferrovial.

Amey would not comment on whether the delays were related to tree-felling issues but last year it was revealed Sheffield Council had paid Amey £700,000 in compensation for work delays caused by its decision to set up an independent panel in November 2015 to advise on its controversial tree-felling strategy.

The “knock-on” effect of waiting for the panel’s advice had contributed to delaying highways work that needed to be completed on more than 300 streets - despite the panel’s recommendations to save trees being rejected by the council in 75 per cent of cases and felling going ahead against their advice.

Amey had used Aggregate for road resurfacing work but replaced them with Tarmac Ltd in summer 2017.

In a section about ongoing lawsuits, the Ferrovial report states: “The services business in the UK received notification of claims by Aggregate Industries, the subcontractor in the Sheffield contract, amounting to £32 million.

“Of this amount, £21 million relate mainly to claims for delays and additional costs due to the sequence in which the works were executed, and £11 million relate to the new estimates of the work performed.

“The group considers that a significant portion of the claim made by the subcontractor, particularly in relation to the first items, has not been proven by Aggregate Industries, which has suspended the claim because it is recalculating the amounts, and it may reactivate it in the coming months.

“Aggregate Industries has acknowledged that a final settlement proposal is to be prepared. The group considers that this contingency has been correctly provided for at year-end.”

When The Yorkshire Post asked Amey what contingency money has been set aside for the dispute and if the delays had been related to tree-felling issues, a spokesman said: “As a large organisation, we have many suppliers and are proud to have a good relationship with our supply chain.

“Occasionally, there are commercial disputes which arise at the end of a suppliers’ contract term. As the resolution of this matter is ongoing, we cannot provide a comment on this issue however a dispute with a historic supplier does not affect the delivery of Amey services.”

Amey is facing separate litigation from Birmingham City Council over its highways work in that city and is currently negotiating a settlement in that case.

Aggregate Industries did not wish to comment.