Contractors’ financial crisis halts Keynsham town centre project

erh logoWork has been halted on highway works in Keynsham town centre because the company carrying out the £540,000 project has been hit by financial problems and the administrators have been called in, it has emerged.

Since July, the building and construction arm of the Yate-based ERH Group has been carrying out works directly next to the new town hall development for B&NES Council.

Other projects including the Newbridge Park & Ride extension in Bath, the Widcombe Parade diversion and improvements on the London Road in the city have also been affected by the company’s closure.

In a statement this week the ERH Group said: “The directors of ERH (Holdings) Ltd and its subsidiary ERH Communications Ltd have this week assured customers, suppliers and employees that it is business as usual and these companies are unaffected by last week’s events affecting two other subsidiaries – ER Hemmings (Building) Limited and ERH Construction Limited.

“Following a recent senior level and board restructuring which has seen five directors leaving the Group, the remaining board is confident Communications and Holdings is now on a sound footing to trade successfully going forward and seeks continued support from customers, suppliers and employees.

“Unfortunately, the financial restructuring has resulted in the closure of Building and Construction, causing the unfortunate loss of a small number of jobs. However, where opportunities allow, the company is looking to secure employment within the unaffected companies.

“The Group has traded successfully for over 40 years and had deservedly acquired a reputation for producing premium quality construction projects. This quality has been underlined by the various awards garnered by a number of those projects over the years.

“In the very difficult trading conditions of the past few years, Building and Construction has incurred significant trading losses. The directors have filed notice of intentions to appoint administrators for Building and Construction by 31st October 2014. Once appointed, they will formally communicate with all affected parties.

“The directors are currently being supported by the advisory division of Grant Thornton UK LLP.”

A B&NES Council spokesperson said: “The council is continuing to liaise with ERH Group to establish the situation. At Widcombe Parade, it has secured the agreement of sub-contractors to continue works while discussions with ERH Group are ongoing. The council will provide an update should there be any significant changes to the project programme.”

Cllr Anthony Clarke, the Conservative shadow transport spokesman on the council, said: “There are clearly still questions needing to be answered about why the council has put so many eggs into one basket by handing over so many major projects to a single contractor.

“We therefore hope that the council monitors the work very closely to ensure over-spends are avoided and any further delays prevented.”