Mace to build Shard for fixed price

Mace is set to be appointed to build the Shard for a fixed price, the first big deal of its type in the company’s history.

It is understood that Mace is in exclusive talks with developer Sellar Properties over a deal worth more than £350m after Laing O’Rourke walked away from the project.

Mace was originally expected to build the Shard under a construction management deal, but concerns over funding led Sellar to approach Laing O’Rourke to ask about a fixed-price contract.

A source close to the talks said: “It’s all change. The direction is now to negotiate with Mace to arrive at a fixed-price deal. Sellar has been in numerous meetings with them.”

The source said that a fixed price for the deal had not yet been agreed, but that figures being discussed were “£350m and upwards”.

Although Mace has previously worked on small fixed-price deals, it has never carried out a major project under the procurement route.

Laing O’Rourke is believed to have got cold feet after realising that Mace was keen to compete for a fixed-price deal.

Meanwhile, sources on the project said that although demolition work was proceeding, it was doing so “very slowly”.

It emerged earlier this month that the demolition programme had already fallen six weeks behind schedule as the developers sought to finalise funding for the scheme, with developer Sellar Property Group struggling to convince its new Kuwaiti backers that the cost of the building will not spiral out of control.