Jan 20, 2021

Lesico says preconditions met for £75.5m Ghana project

Dominic Ellis
2 min
Scope of work includes the construction and renovation of a water pump facility in the Volta river, as well as renovating water treatment facilities
Scope of work includes the construction and renovation of a water pump facility in the Volta river, as well as renovating water treatment facilities...

Lesico reports all preconditions for the execution of the construction and upgrade of a £75.5 million water supply facility in Ghana have been met, with the Israeli company receiving a down payment of around £11.5 million.

The work includes the construction and renovation of a water pump facility in the Volta river, as well as the construction and renovation of water treatment facilities with a capacity of approximately 40,000 cubic metres per day, and the laying of approximately 60kms of water transmission and distribution lines.

The contract will also cover the construction and renovation of water towers, booster stations, and ground reservoirs.

In a statement, Lesico states that the project will be executed by a subsidiary that is 100 percent formed in Italy.

"We are proud to be partners of this strategic agreement with Ghana government and we consider this a major milestone for Lesico, as a leading player in the water and environment design build domain. In this project – with the help of BlueBird, the project finance company that specialises in funding of international projects – we have built the funding and insurance package for Ghana,” said Eyal Leshamn, Lesico CEO. 

The statement adds that the project funding will be provided by Deutche Bank and will be insured by the Italian Export Credit Agency (SACE) along with a sub insurance of the Israeli insurer ASRA. The subsidiary is expected to receive ongoing payments under the terms of the agreement with the Ghana government, from the funding party, depending on the progression of the project. The funding agreement is between Ghana government and the funding party.

"This project will allow us to open a new market, in which we will be able to use all of our capabilities and proficiencies of our different lines of activity. It also merges with the Group’s vision and strategy regarding business expansion in Africa," added Leshamn.

The objective of the Keta Water Supply and Expansion Project in the Volta region is to supply potable water to more than 400,000 people living in three districts – Keta Municipality, Anloga District, and South Tongu District. Other beneficiary communities include: Agordome, Sogakope, Keta, Anloga and surrounding areas. 

Others include Kpodze, Kpotame, Vume, Tefle, Sokpoe, Dabala Junction, Tregui, Badadzi, Havedzi, Adzeto, Tegbi, Hovi-Aferdome, Kedzi and Nukpesekope.

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Jun 20, 2021

Contractor issues head disputes list in 2020: Arcadis report

Dominic Ellis
2 min
The average value of disputes globally rose to $54.26 million in 2020 - but the numbers were much the same as 2019, according to an Arcadis report

The average value of disputes globally rose from $30.7 million in 2019 to $54.26 million in 2020, while the length of disputes fell from 15 months in 2019 to 13.4 months, according to an Arcadis report.

The data, featured in Arcadis' 11th annual report, illustrates industry-wide ripple effects of the COVID-19 pandemic although interestingly the overall volume of disputes stayed relatively the same in 2020 as in 2019.

While trends in the value and length of disputes varied from region to region, all regions surveyed saw an increase in "mega disputes" related to bigger capital programs and private projects. Notably, more than 60% of survey respondents encountered project impacts due to COVID-19.

Owners, contractors, or subcontractors failing to understand and/or comply with their contractual obligations became the leading cause of construction disputes in 2020 (jumping from 3rd place in 2019), followed by owner-directed changes and third-party or force-majeure changes as the second and third-leading causes, respectively.

Highlights from the report include:

  • Proper contract administration was a theme across the globe for the successful and early resolution of disputes
  • Most disputes were settled through party-to-party negotiation, and a willingness to compromise played a key role in early resolution
  • Among regions surveyed, the buildings (education, healthcare, retail/commercial, government) sector saw the most disputes
  • In North America, construction dispute value rose from $18.8 million in 2019 to $37.9 million in 2020, while the length of disputes shortened from 17.6 to 14.2 months.

While cost and length have changed since 2019, risk management was still seen as the most effective claims avoidance tactic, while owner/contractor willingness to compromise was once again the top-ranked factor for the mitigation/early resolution of disputes.

"COVID-19 irrevocably changed every industry," said Roy Cooper, head of contract solutions for Arcadis North America. "Construction disputes experts will have to continue to adapt, even post-pandemic, as workforce expectations, climate events and government infrastructure funding change how projects are designed and contracted in the future."

The research presented in the report was compiled by Arcadis based on survey responses, global construction disputes the team handled in 2020 and contributions from industry experts.

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