Why these bollards led to a bill of almost £50 million
Birmingham City Council has fined a highways firm nearly £50 million after it failed to replace two damaged sets of roadside bollards for a almost a year.
The penalties were imposed on Amey after the contractor failed to replace each of the two sets of bollards within an hour – triggering an initial £250 penalty clause.
The council claimed each incident should have been treated as an ‘emergency’ that required a category 1 response.
Months later the work was eventually completed but by then each penalty fee, which had been doubling hourly, meant the fine reached totals of £31 million for one set of bollards and £17.5 million for the other.
Amey highlighted the dispute over the bollards on Westwood Road, Witton, as an example of the “total breakdown” in relations between the company and the council.
It argued the loss of the bollards did not cause an urgent hazard, so should have been classed as a non-urgent ‘Category 2’ repair, to be completed within 28 days.
In that case they delays would still have led to a £2,500 penalty fine.
Claims of ‘unfairness’
The company claim this isn’t the only time the council have acted unfairly in dealing with them.
When workers left cable ties around three lampposts after carrying out repairs, the council triggered another penalty clause for adding unnecessary ‘cosmetics’.
Amey took a long time to remove the cable ties and then ended up with a final notice for £14 million.
It claims both sides want the deal to end but said all approaches to the council to reach a resolution have been rejected.
Amey’s most recent offer was for £175 million cash, plus a write-off of fees totalling around £70 million but they didn’t get a response.
A spokesman for Amey said: “We are at a critical point. The contract has not worked for either party.
“Amey’s value has been written down – it is obviously in the council’s best interests to get another company in.”
The company claims that it is only in Birmingham that such poor relations exist; it is working harmoniously with other councils.
The Amey spokesman continued: “It is the people of Birmingham who could lose out if this is not sorted.”
Road upgrades on hold
Plans to upgrade roads and pavements across the city have been put on hold while the dispute goes on.
Amey says its spring programme of works have still not been signed off so will not commence.
A Birmingham City Council spokesman said: “We take our responsibilities to manage our contractors seriously and where a contractor is found to be underperforming then we will not hesitate to take appropriate action in order to protect the public purse.
“The contract was established to make sure that our highway network is kept safe and is maintained.
“Dangerous issues that are not dealt with by Amey will therefore attract financial adjustments; the longer they are left and the more dangerous they are, the more those adjustments increase.
“We have managed Amey’s performance in line with the contract, although the statements we have seen regarding these adjustments wildly exaggerate the amounts we have applied.
“In such circumstances the council cannot approve these programmes. This has now been the case for over a year and it is disappointing that Amey does not recognise the damage it is doing by allowing the city’s roads to deteriorate.”