ISG pauses work on £300m gigafactory contract

Work being carried out by ISG on a vehicle battery ‘gigafactory’ in the north-east has been paused amid design changes.

ISG was appointed to a £300m construction contract for the Britishvolt factory in Cambois, Northumberland, in December 2020 and began phased construction on the site in September.

The client recently responded to local media reports that construction at the site, which will produce lithium-ion batteries for electric vehicles, had ground to a halt by saying work was continuing.

However, an ISG spokesperson has confirmed to Construction News that the lead contractor has paused work on the project as it waits for designs to be finalised, which it says is part of the “flexible” approach taken by the client.

It follows a report in The Guardian that work on the site has been “severely limited” until February to minimise spending because of a funding gap.

An ISG spokesperson told Construction News: “We continue to collaborate closely with our client to facilitate a dynamic project that enables flexibility to the site’s core design in alignment with evolving advancements in battery technology.

“We are now pausing works on-site while the design is finalised and remain a committed and passionate partner in this transformative scheme for the people of Northumberland.”

The spokesperson said ISG continued to work closely with Britishvolt as it looked to  amend its plans, and that it had completed work “in alignment with the development plan to date”.

The Guardian cited leaked documents to report that the project had been put on “life support” to “minimise cash out”.

The documents were dated two days before the government confirmed on 27 July – along with other investors – that it would provide £100m of funding for the project. They also show there were discussions around “mitigations … to deal with imature [sic] design and design release delays” ahead of an investor contract due next month.

The funding gap impacted the construction supply chain for the factory build, according to the papers. This included the delivery of supplies from structural steel specialist Severfield.

A Britishvolt spokesperson confirmed the delay in procurement from Severfield, but attributed the shake-up in construction to “external factors”, not a funding problem.

“We continue to work with our financing partners and investors on funding scenarios for the build of the shell and core of the gigaplant project, and to develop the associated supplier park,” the spokesperson said.

They added: “We are progressing ahead of schedule in our enabling works at the Britishvolt Gigasite in Cambois, near Blyth, Northumberland. This has allowed us to take the time to focus on design work for the site and to reschedule some strands of construction work, optimising the build process for each of the project’s four phases.

“Flexing the plan in this way enables us to better source materials given current supply constraints due to the global economic situation and to enhance our cost efficiencies.”

Earlier this week, in response to reports about construction having paused on site, Britishvolt and contractor ISG maintained that construction was on schedule. Simultaneously, reviews were being conducted about how construction could be adapted to changing battery technology and climbing construction costs.

The first phase of construction is scheduled to finish in 2023, with the full factory delivered in 2027.

Severfield was approached for comment.

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