The contractor of the reconstruction of the New Riga Theatre (JRT) – SBSC (“Skonto Būve” and “Skonto Construction”) – has informed the client that since SBSC lacks the staff to increase the pace of work, the object can only be handed over to the user in August 2023, not in March, as previously agreed. In order to increase the pace of construction, SRE is considering the possibility to help SBSC attract subcontractors and guarantee the timely payment of invoices for the works carried out in the project, informs Jeļena Gavrilova, member of the Board of SJSC “State Real Estate” (SRE).
So far SRE has made all reasonable efforts to ensure that the reconstruction works in the JRT building complex are carried out without delay. In particular, there has been regular work with SBSC – the construction company has been warned several times, solutions have been offered, already including a substantial extension of the agreement by the objectively necessary time period – eight months – due to COVID-19 and the consequences of the Russian-led war in Ukraine. SRE has also, with the support of the government, found a solution to cover the cost increase of 2.18 million euros. Advance payments have been increased to ensure that SBSC has the necessary funding to continue its work in a changing market environment, with 1 million euros transferred in July. However, SBSC has not made the promised progress in increasing the pace of construction works – about 100 people are currently working on the site, but almost 300 are needed to complete the works within the deadline. Therefore, SRE is currently approaching subcontractors for possible participation in the project, offering guaranteed payment to ensure the continuity of works.
“Working simultaneously on several large national level projects, we see that this is not a systemic problem. Of the 24 projects under construction, where we are working with 18 builders, one particular builder – SBSC, or more precisely one of the companies forming the general partnership – Skonto būve – is having problems, unable to mobilise staff and clearly struggling with current asset problems. With this builder, SBSC, we as a government contracting authority find ourselves in a situation where we have to attract the labour force, which is the responsibility of the builder. The inability of the company to attract labour force and complete the works within the set deadline was already evident in the reconstruction of the Valmiera Drama Theatre building, where we were forced to terminate the Agreement,” explains Gavrilova.
The member of the Board of SRE emphasises that when the agreement for the reconstruction of the VDT was terminated, the representatives of the general partnership SBSC promised to mobilise their efforts for the works in the New Riga Theatre building complex; unfortunately this has not happened. By October 2022, only about two thirds of the planned works on the JRT building complex had been completed, even though according to the contractual construction schedule, almost the entire scope of works should have been completed. Currently, in the JRT building complex, construction of all building structures is completed, interior works, facade construction works, building of engineering communications systems and freight elevators are taking place. Most of the glazed facade has been completed; however, finishing work of the other facades and the old hall, which should have been completed during the warm season, is delayed.
The intermediate term for the handing over of the construction works to be met by SBSC is December 2022. Then all external structures must be completed. In March 2023, the JRT building complex must be put into service so that the theatre company can start preparing for the next season in time. It should be noted that once the construction works are completed, JRT will install its own equipment, and once the building is operational, the deficiencies will be addressed.
“The JRT ensemble should return to the renovated premises at Lāčplēša iela 25 as soon as possible. We cannot risk the quality of the work and we believe that if we mobilise resources and organise the work well, we can still meet the deadlines,” said Gavrilova, outlining the situation.
An agreement has been signed with the general partnership SBSC for the construction of JRT for 32.3 million euros. Cooperation with the builder – PS “SBSC” – takes place according to the principle “Design and build”, which means comprehensive responsibility of the contractor for the construction works, allowing technical issues arising during the daily construction to be resolved faster.
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