Skanska has pulled out of the phase 2 development of Battersea Power Station with Mace set to replace the firm.
The construction company said that following the initial phase, “an alternative construction management procurement route would better suit the next and continuing phase of the works” and was ending the contract.
It has been reported that costs have been escalating on the job, which Skanska has been working on since 2015.
The decision to pull out of the contract with Battersea Power Station Development Company (BPSDC) was said to be “mutual”.
Works will now end in the autumn, when there will be a transition period where Skanska said it would work with BPSDC and the supply chain to make sure project progress was not affected.
Mace will now replace Skanska as construction manager.
The BPSDC said: “Mace already has detailed knowledge of the project following their initial appointment on the Power Station in 2013 to complete the early preparatory works; they will now focus on Stage 2 of the construction works, being the completion of this iconic Grade 2 listed landmark building, returning it proudly to the London skyline.”
Skanska said it had managed the “extensive” first stage of works, including site preparation, enabling works, aspects of the chimney deconstruction and reconstruction, piling, substructure works and retaining structures, together with other critical infrastructure and enabling works to the main boiler house and the associated ground works for the main energy centre.
Skanska UK president and chief executive Gregor Craig said: “Skanska UK and BPSDC have jointly agreed to part ways at this stage in the Power Station works and our efforts are now focused on enabling BPS to complete the transition as effectively as possible.
“I would like to thank the BPSDC shareholders for their support during the last two-and-a-half years.”
BPSDC chief operating officer Simon Jenner said: “This contract, combined with the recently awarded construction management contract for phase 3 of the scheme, will deliver one of Europe’s largest urban regeneration schemes in recent history and is itself the largest single private building contract awarded in the UK.
“On behalf of the Battersea team, I would like to thank Skanska UK for their involvement to date.”
Mace chief operating officer for construction Gareth Lewis said: “After working closely with the Battersea Power Station team during 2013 and 2014 on the engineering and the reconstruction of the Power Station’s distinctive chimneys, we are delighted to be awarded such a landmark project.”