Court rules against Glendoe client13 January 2017
Great Britain – A court has issued its ruling on the Glendoe collapse, finding in favour of contractor Hochtief at the expense of client Scottish & Southern Energy (SSE). The decision was given on 21 December and denied SSE a GBP 130M (USD 160M in Jan 2017) damages claim against Hochtief. The contractor will however have to pay low availability damages of GBP 1M (USD 1.24M in Jan 2017) for not completing the remedial work.
Of particular interest from the court’s conclusions is the placement of all risk on the client, despite the project being design and construct.
The ruling relates to the August 2009 collapse of a tunnel on the Glendoe hydropower scheme near Fort Augustus in Scotland. Eight months after take over by the client rock fell from the crown blocking the 5m-diameter tunnel. Operations did not resume until nearly three years later after completion of a 200m-long drill and blast bypass tunnel was completed by Bam Nuttall.
Jacobs was the client’s engineering geology consultant, Donaldson Associates provided technical assistance on the recovery project and Pöyry was Hochtief’s subcontractor for the design of civil works. Andritz was Hochtief’s M&E subcontractor.
Initially client and contractor got together to discuss remedial works, however liability was a point of argument with neither party accepting responsibility for the rock fall. SSE was desperate to get operations running again as it was losing GBP 50,000 per day, hence the decision for a bypass.
The contractor contended four points: that it had completed the works in accordance with the contract, that the owner assumed the risk of collapse at takeover, that the scope and cost of the recovery project was unreasonable and that it was entitled to carry out remedial works.
The judge identified that the core of the matter was a simple issue: “Did the contractor misclassify the rock and in consequence fail to install the correct support? The owner submits that the answer is ‘yes’. The contractor takes the opposite position.”
Jacobs expected 97.5% of rock to be ‘good’ but warned that information was scarce. One fault zone, the ‘Conagleann Fault Zone’ would have required the UK’s largest drilling rig to bore, and there was no access road or helicopter that could get it into position, so it was left uninvestigated, despite a Hochtief request to the contrary. Eventually SSE awarded a contract to Hochtief, which went with a TBM observational approach with four support classes (Class I being minimal support). It stated that it expected 60 per cent of the tunnel to be unlined.
During tunnelling, rock conditions were judged to be very dry and good, with very few weak sections and requiring no forward probing. Both SSE and Hochtief had geologists working to continuously agree rock classification.
Even when passing through the fault zone, where special care was taken including removing the probe drill to improve rock bolting efficiency, no particular challenge was encountered. Crews reported barely noticing the fault.
Prior to ‘watering up’ the tunnel, the parties conducted a walk through to carry out metre-by-metre inspections of the tunnel to detect any problems and decide if additional support was needed anywhere. Some areas were upgraded from Class I to Class II and Pöyry recommended the application of shotcrete strips and mesh to certain areas of erodible rock.
Professor Broch inspected the HRT and reported: “My general impression was that the rock mass conditions in the tunnel are very good. It is one of the driest tunnels that I have ever inspected ... No major weakness zones were observed ... The weakness zones described in the Pöyry report are all small, and as far as I could observe, none of these may cause serious collapses. I thus regard the support measures recommended in the report as being more than good enough for a tunnel that is basically designed and built as unlined.”
Aside from a few minor comments, the tunnel was accepted and takeover certificate issued in December 2008. Hochtief was paid GBP 2M (USD 2.47M in Jan 2017) for early completion and an additional GBP 5M (USD 6.2M in Jan 2017) for variables. There was due to be a final inspection two years later.
In early summer 2009 oddly low water and power readings were detected, but operators assumed calibration problems at first due to the newness of the site. With hindsight this was seen as a mistake. By late 2009 sediment plumes were observed being pumped into Loch Ness. In August 2009 the plant could not even reach 100MW and senior SSE personnel were “shell-shocked”.
A subsequent dewatering and walk through found the rockfall in the headrace. It was then decided to construct the bypass.
It was judged that the reason for the collapse was that there was not enough support; poor rock conditions coincided with insufficient shotcrete and rockbolts. There is a paucity of detail here according to the judge as no full investigation took place, one being redundant following the decision to construct a bypass.
The blocked zone is 71m long and the collapse developed progressively from at least 12 April 2009. It is not know what length of crown collapsed or the dimensions of the void.
The judge concluded:
“a) The contract imposed a duty on Hochtief to exercise reasonable skill and care in the construction of the scheme.
b) Hochtief discharged that duty.
c) The ground conditions were worse than it observed, however, and the support proved insufficient to prevent the collapse.
d) Class IV support was required to prevent the collapse.
e) The collapse was not due to a defect that existed at take over. Accordingly, it was an employer's risk event.
f) There was no contributory negligence. SSE was not at fault in respect of the odd readings and output swings from April to August 2009.
g) Hochtief did breach its obligations by not returning to repair the tunnel.
h) In consequence SSE was entitled to instruct BAM to carry out the recovery project, and (ii) Hochtief is not entitled to recover any sums in terms of the counterclaim.
i) If I had been awarding damages to SSE on its principal grounds of action, I would have held that the costs of the recovery project are reasonable, subject to deletion of the claims in respect of the ‘secondary tunnel defects’ and the dam bottom culvert. I would have also considered deducting a sum to reflect low productivity in the early months of the project.
j) I am minded to award low availability damages to SSE.”
In response to the ruling by the Court of Session an SSE spokeswoman said: “SSE is disappointed with the ruling by the Court of Session on the compensation claim relating to repair work at our Glendoe Hydro Scheme near Fort Augustus in the Highlands. We will review the decision in more detail and assess our options.”
The full judgement can be read here: http://www.scotcourts.gov.uk/search-judgments/judgment?id=805126a7-8980-69d2-b500-ff0000d74aa7