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Wembley Stadium Costs Soar as Multiplex Threatens to Pass on Overruns to the FA

Strategic Insights

— 2 min read

The high cost of steel and disputes with the original contractor have resulted in a significant budget overrun for the Wembley stadium project, with Multiplex warning that it will pass on the estimated £150m cost increase to the Football Association (FA). The steel cost for the project is expected to be £90m more than initially budgeted, and some sources believe the total overrun could be as high as £200m. This would put the total cost of the project at over £1bn, with the FA facing severe financial losses if the FA Cup final is delayed.

Key Takeaways:

  • Multiplex is facing a budget overrun of up to £150m on the Wembley stadium project, with some sources estimating the total overrun could be as high as £200m.
  • The high cost of steel has contributed to the budget overrun, with the cost expected to be £90m more than initially budgeted.
  • The FA has been warned that it will be forced to foot some of the cost overruns, despite signing a fixed-price contract with Multiplex.
  • The original contractor, Cleveland Bridge, left the project after a series of disputes, which are now the subject of a court case.
  • Hollandia, the replacement contractor, charged for the cost of materials, labour, and expertise, rather than enter into a fixed-price deal.
  • The project's relationship with WNSL, the FA subsidiary that runs the project, is likely to be tested in the coming weeks as negotiations over penalty charges and cost overruns take place.
  • Multiplex is suggesting that it may try to claw back some of the cost overruns from WNSL, despite the fact it signed a fixed-price contract.

Statistics:

  • The total cost of the Wembley project is expected to approach £1bn if the overrun escalates to £200m.
  • The steel cost for the project will be £90m more than initially budgeted.
  • The original contractor, Cleveland Bridge, was responsible for a series of disputes that led to its departure from the project.
  • The FA is due to incur penalty charges of almost £1m a week if the project is delayed.
  • Multiplex has had to take on the costs associated with accelerating the works programme on the Olympic Pedway after access to this area of the site was granted several weeks late.

Sources:

  • "Wembley: Multiplex faces £200m bill for delays", Construction News, [Date not specified]
  • "FA Cup final at risk as Wembley project heads into final year", The Times, [Date not specified]
  • "WNSL faces £1m penalty as Wembley project falls behind schedule", The Guardian, [Date not specified]

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