Lancsville failure delays £42m job by 18 months

The financial demise of Lancsville Construction has left its biggest project one-and-a-half years late and more than 16% over budget.

Pioneer Point, a residential scheme in Ilford, Essex, is now expected to cost more than £49m to finish and is scheduled for completion in November 2011, owing to a slowdown in work in the months leading to the £131m-turnover contractor’s collapse in December. Its original budget was £42m.

In addition to costing developer Empire Property Group an extra £7m in construction costs, the delay has lost it £25m in pre-sales.

Part of the additional building cost has also been blamed on a number of defects, including sagging floors owing to the faulty erection of temporary propping.

Tom O’Donnell, managing director at Empire, said: “The defects have been overcome now, but it was unquestionably the perilous financial situation at Lancsville that caused the slowdown in work. Luckily we had anticipated the administration and decided that we wouldn’t stop our site operations.”

To ensure work at the site continued, O’Donnell set up a new contractor, London & Regent International, to take on the design-and-build contract.

The firm is headed by ex-production director at developer Oracle, Ben Kellythorn, who has kept on key subcontractors including Yuanda for the cladding and Designer Group for the M&E package.

Lancsville administrator Vantis is still establishing the value of assets left by the contractor and said a report would be available to the firm’s 1,000 creditors within 60 days of a 17 June deadline. Administrator Nick O’Reilly repeated warnings that money was unlikely to be forthcoming because of the £8.5m owed to secured creditor Agilo.

Work on other Lancsville sites has also been taken on by rival contracts. Ardmore is finishing the £12m Larnaca Works project for Union Developments in Bermondsey, south London, while Sheldon Construction has taken on a £11m residential development in Hackney, north-east London.