Unemployment Eases
Construction's unemployment rate declined in October to 11.4% from September's 11.9%, as the industry recorded a gain of 17,000 jobs in the month, according to the Bureau of Labor Statistics' latest monthly report. Any impacts on the job market from rebuilding after Superstorm Sandy would not start to be reflected until November's statistics. Stephen Sandherr, Associated General Contractors' CEO, said overall construction employment is not expected to show a major net change because of the hurricane. He said, "Even as some firms pick up work repairing damaged buildings and infrastructure, other firms will suffer as previously planned projects are cancelled or delayed." The BLS October numbers for construction sectors show that specialty trade contractors added 16,800 jobs in the month. Anirban Basu, Associated Builders and Contractors chief economist, says the construction jobs report was "surprisingly good" and called non-residential specialty firms' pickup in jobs "a reversal of fortune."
Legal Disputes Intensify Over Plant Being Built in Georgia
On Nov. 1, Stone & Webster and Westinghouse Electric Co. filed a lawsuit in U.S. District Court in Washington, D.C., seeking more than $900 million from a group of utilities funding construction of the Plant Vogtle nuclear powerplant project near Waynesboro, Ga. According to the Atlanta Journal-Constitution, the lawsuit by Stone & Webster—a division of The Shaw Group—and Westinghouse seeks approximately $674 million as compensation for extra work required by federally mandated design changes. The newspaper reports the contractors are seeking another $244 million for a "delay to the critical path of the project schedule." Earlier this year, the parties had sued each other over the cost of extra excavation work. The defendants in the latest suit include Georgia Power Co., Ogle-thorpe Power Corp., Municipal Electric Authority of Georgia and the City of Dalton, Ga.
Judge Awards HDR Legal Fees in Tampa Bay Water Claims
A federal judge ruled on Nov. 2 that Tampa Bay Water owes HDR Engineering more than $20 million in legal fees resulting from the recent trial over cracks at the utility's reservoir in Lithia, Fla. The regional water utility had sued HDR, the reservoir project's designer of record, alleging the firm's faulty design had caused extensive cracking in the six-year-old reservoir. But after a nearly month-long trial, a federal jury took just five hours to determine HDR was not to blame. The contract between Tampa Bay Water and HDR stipulated that the prevailing party in any related litigation would be entitled to recover all legal fees.
In his order, U.S. District Judge James D. Whittemore justified the "extraordinary" sum by citing testimony from fee experts that Tampa Bay Water v. HDR Engineering was "an unprecedented case" and possibly "the largest engineering professional liability case ever tried [by] a jury." HDR had requested more than $22 million in legal fees. Prior to trial, Tampa Bay Water had rejected a mediator-initiated settlement offer of $30 million. After the verdict this past April, the utility reported its legal fees related to the case totaled approximately $10.6 million. In August, Judge Whittemore denied the utility's motion for a new trial. Tampa Bay Water is continuing with its appeal.
Trade Pact Boosts ExportsTo Panama's Infrastructure Work
A U.S.-Panama trade pact has gone into effect and is expected to boost construction-equipment exports to the Latin American nation, which is busy with infrastructure projects. Under the agreement, which took effect on Oct. 31, tariffs on most U.S. construction-equipment exports to Panama would be eliminated. The tariffs averaged 5% before the pact. Besides the $5-billion expansion of the Panama Canal, a $1.8-billion light-rail line is under way, and the country's government has plans for billions of dollars in other infrastructure work as well. In October 2011, Congress approved and President Obama signed legislation to implement the Panama agreement.
Canadian Government Blocks Purchase of Progress Energy
The Canadian province of British Columbia has been dealt a blow by the federal government in Ottawa's last-minute rejection of a takeover of Canadian gas producer Progress Energy by Malaysia energy giant Petronas. Writing to federal industry minister Christian Paradis, the province's energy minister, Rich Coleman, argued the $5.9-billion purchase "would add significant long-term economic benefits to British Columbia." He then expressed deep disappointment that Paradis had pulled the plug on the deal. "It is too early to determine what impact this may or may not have on our natural-gas sector," wrote Coleman. "We will be interested to hear more about why they came to this decision."
