Considerations of UK Construction Remobilisation, Part 2

Last week we discussed, in light of the encouragement from Robert Jenrick MP (Secretary of State for Housing, Communities and Local Government) for the construction industry to remobilise, the government’s apparent reluctance to provide confidence and clarity for the construction industry in respect of the safe operation of sites.

In the Prime Minister’s address to the nation on 10 May 2020, he re-stated that encouragement for the construction industry, where possible, to return to work.

To read the full text of this post by Duane Morris attorneys Steve Nichol and Matthew Friedlander, please visit the Duane Morris London Blog.

Considerations of UK Construction Remobilisation

The construction industry in the UK has been afforded the freedom to continue work where it is safe to do so since the lockdown was implemented. It is a freedom that the sector has done its best to exploit where it can, with significant works continuing on a variety of essential and less essential projects. A number of leading construction companies and housebuilders have continued or recommenced work where they are able to do so, and a number of high profile projects are apparently progressing well. Build UK has reported that its members, who comprise some of the largest contractors operating in the UK, are now working on 73% of sites (up from 69% last week). However, the issues for the industry facing the prospect of full remobilisation to all sites have not changed.

To read the full text of this post by Steve Nichol and Matthew Friedlander, please visit the Duane Morris London Blog.

Construction Industry at Core of Post-COVID-19 Debates

By Owen Newman and Chris Chasin

Who is in the best position to sustain the loss? And what outcome is in the overall best interests of industry, economy and the public at-large? Governments will grapple with these issues in the context of COVID-19 in the months and years to come. And the construction industry, willing or not, will find itself at the core of these debates as it deals with COVID-19 related cost and schedule impacts caused by work stoppages, disruption of labor resources and productivity, disturbed supply chains and varied safety requirements. Continue reading Construction Industry at Core of Post-COVID-19 Debates

Exit Strategies: Construction & Engineering UK

By Vijay Bange and Tanya Chadha

It was announced on Sunday 5 April that Keir Starmer was selected as leader of the Labour Party. Whilst the current Covid-19 outbreak has no basis for political jostling, he raised a very important question, namely, what is the government’s “Exit Strategy” to eventually get us back to a sense of normality.

The point raised by Keir Starmer is of wider economic relevance. Save for key workers, most other business sector activities have come to a halt. This is largely (but not exclusively) the case for construction and engineering projects. Continue reading Exit Strategies: Construction & Engineering UK

Challenging Times: Construction and Engineering in the UK

By Vijay Bange and Tanya Chadha

The COVID -19 pandemic has already had a massive effect on global economies. Its impact has been unprecedented and there is a degree of uncertainty on almost every facet of daily life.

This article seeks to touch upon issues that may affect those in the UK construction industry specifically, but certain elements will no doubt equally apply across other sectors. Continue reading Challenging Times: Construction and Engineering in the UK

Coronavirus and Construction in the UK: The Time to Talk Is Now

In an industry of seemingly ever-tighter margins across the board, it is perhaps unsurprising that the construction industry has fought to continue through the current coronavirus crisis as much as it has.  However, many in the industry have stopped work and shut down sites and, despite the current and perhaps somewhat over-optimistic view from the government that work can continue whilst still complying with social distancing rules, it seems inevitable that all non-essential work will stop very soon. Continue reading Coronavirus and Construction in the UK: The Time to Talk Is Now

New York City’s Sustainable Roof Laws Likely to Increase Construction Costs

As of November 15, 2019, building owners in New York City are required to install “sustainable roofing zones” on all newly constructed buildings, expansions of existing roofs and roof replacements. The new laws were passed by the New York City Council on April 18, 2019, and became law on May 20, 2019. These new ordinances, known as Local Laws 92 and 94 of 2019, passed as part of a broad package of laws known as the New York City Climate Mobilization Act, whose goal is reduction of building carbon emissions. Because the sustainable roof requirements are effective now, plans submitted to the Department of Buildings for approval must include plans for sustainable roofs.

View the full Alert on the Duane Morris LLP website.

NY Governor Vetoes Bill To Allow Delay Damages On Public Contracts

New York Governor Andrew Cuomo ended 2018 by vetoing New York Senate Bill 6686 to amend the state finance law by adding a new section 138-b to allow contractors working on public construction projects seek delay damages against government agencies. The vetoed bill would have required all public contracts to contain a clause allowing a contractor, subcontractor or supplier to make a claim for costs due to excusable delays resulting from actions or omissions by a public owner or any of its representatives. The bipartisan bill sponsored by Senators Michael Ranzenhofer (Republican) and Luis Sepulveda (Democrat) passed the Assembly by a vote of 103 to 40 and the Senate 59 to 0. The text of the bill can be seen here.

Jose A. Aquino (@JoseAquinoEsq on Twitter) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group and of the Duane Morris Cuba Business Group. Mr. Aquino focuses his practice on commercial litigation with a concentration in construction law, mechanics’ lien law and government procurement law. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author’s law firm or its individual attorneys.

Major Milestone Reached in Phase II of New York City’s Second Avenue Subway Project

The Metropolitan Transit Authority (MTA) announced that the Federal Transit Administration issued a “Finding of No Significant Impact” (FONSI) for Phase II of New York City’s Second Avenue Subway Project. The FONSI was issued after an extensive update of the original Environmental Impact Statement that was prepared in 2004. The new findings mean changes to the design of the project since 2004 were found to have no additional adverse impact on the environment in the construction area.

Congresswoman Carolyn B. Maloney said: “This finding is a major step forward toward making Phase 2 of the Second Avenue Subway a reality,” “Phase 2 will make it much easier to commute to and from East Harlem, and to access Metro North and the LaGuardia bus at 125th Street. We have already seen the extraordinary success of Phase 1, and the MTA must move forward as quickly as possible to build the full-length Second Avenue Subway up to 125th Street and then down to lower Manhattan.”

Phase I of the Second Avenue Subway opened for service January 1, 2017. Phase II is now underway with engineering and environmental reviews. Phase II will extend the subway line to 125th Street with stops at 106th, 116th, and 125th. When completed, the Second Avenue Subway Line will extend 8.5 miles from 125th Street in Harlem to Hanover Square in Lower Manhattan, including 16 new ADA-accessible subway stations.

Jose A. Aquino (@JoseAquinoEsq on Twitter) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group and of the Duane Morris Cuba Business Group. Mr. Aquino focuses his practice on commercial litigation with a concentration in construction law, mechanics’ lien law and government procurement law. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author’s law firm or its individual attorneys.

P3 Is Riding the Wave in the Aloha State — Hawaii is Calling

P3 Options for Honolulu Rail Transit Project/HRTP

By: Doreen M. Zankowski, Esq.

The Aloha state will soon be calling for qualified P3 firms.  The $8.26 billion Honolulu Rapid Transit Project (HRTP) is moving again — no pun intended!   The HRTP, when finished, will be an automated, 20-mile elevated transit line, capable of moving 100,000 daily riders between Kapolei on the western side of O’ahu via the Honolulu International Airport and Pearl Harbor.  It will continue through downtown Honolulu and Ala Moana to Waikiki Beach and the University of Hawaii at Manoa.

On behalf of Honolulu Rail Transit, JLL conducted an assessment of potential alternative finance and delivery structures for the remaining elements of the HRTPJLL’s study concludes that public funding is necessary to bridge the $2 billion capital funding gap.  After analyzing many delivery options, including design-build-finance (DBF), design-build-finance-maintain (DBFM), design-bid-build, and design-build-finance-operate-maintain (DBFOM), and a P3 approach, the conclusion is that a design-build-finance-P3 is the way to go.  JLL has cautioned the public authority that the P3 approach will not, however, result in any project development investment, but it will cover the gap portion.  The private partner will provide gap financing during construction, and will be paid back after the rail system is operating and generating revenue.  The gap financing will give Honolulu Rail Transit greater cost and schedule certainty. Once the system is generating revenue, the private partner can be paid back with the appropriate interest costs.

The HRTP has been underway for some time — construction began in 2012.  The study by JLL was to identify the most efficient way to complete the project.  Namely, the $132 billion Section 4 “City Center Guideway and Stations” (4.2 miles across 8 stations from Kalihi to Ala Moana Center Station), the $315 million Pearl Highlands Transit Center, as well as fund and maintain a system-wide O&M program.

To date, construction of stations were bid by sections (there are 4 sections), using design-bid-build and design-build contracts.  The guideways were bid out by section using design-build contracts.  To date, sections 1-3 are under contract.   And, Ansaldo holds a 5-year Core Systems O&M contract.

According to JLL, capital costs currently are estimated at $8.2 billion — which includes a 65% increase since 2012.  The full rail line is scheduled to be opened in late 2025 — a greater than 7 year delay).

The Ohana (family) in the Aloha state recognize the limited P3 experience in the state, so putting together the best team is key.  Hats off to a great start with team members JLL, EY and HDR.