The MSPs voted by 12 votes to continue with the Enric Miralles-designed project on Wednesday evening. The decision to continue has averted the threat of legal action by the project team for loss of earnings. It was feared that, if the scheme was cancelled, their compensation costs could have run as high as £80m.
A spokesman for Bovis Lend Lease, construction manager on the scheme, said: “This is good news. We are confident that we can meet the project’s December 2002 deadline.”
MSPs had been warned before the vote that the bill for abandoning their £230m new building in Edinburgh could easily overtake the original £50m estimate for building it.
Alan Mack, Bovis Lend Lease project director, said in a statement before the vote: “If the MSPs do vote to abandon it, we would certainly take whatever action was required to recover the moneys owing to us.”
A Bovis Lend Lease insider said that it would have lodged a claim against the client for the full amount it would have earned if the project had gone ahead.
This may have led to similar claims from architects Enric Miralles and RMJM Scotland, quantity surveyor Davis Langdon & Everest, and engineers Ove Arup & Partners and Buro Happold.
The compensation bill would have been in addition to the minimum £25m cost of walking away from the site, which was identified in last week’s official report by architect John Spencely. This was based on expenditure of £30m so far, minus the £2-6m raised by selling the site.
Sir David Steel, who commissioned last week’s report from Spencely on behalf of the Scottish parliament’s five-strong corporate body, the building’s client, acknowledged the risk of legal claims in his response to the report.
After quoting the £25m minimum cancellation costs, the corporate body’s chairman Sir David said: “There is in our view a significant likelihood that this could be higher, taking into account, in particular, the risk of legal action to settle claims.”
Prior to the vote, a spokesperson for the Scottish parliament confirmed that the cost of compensating the project team for any cancellation could have been as much as the cost of building it.
He said: “If the vote goes against the project continuing, the project team would have to take legal proceedings because we would have broken our contract with them. We may agree to settle with them but we would have to face the financial consequences.”
The Spencely report blamed a lack of communication between the corporate body and the project team for the cost of the overrun. It urged that there be an end to changes to the project brief. It also stated that abandoning the project would waste more time and money.
The building is already taking shape on site. Some 12 000 m3 of concrete has been poured to form the car park, and the steel frame is partially in place after being fabricated off-site.
The cost of the building is being scrutinised by a parliamentary audit committee.
