Hospital builders disagree with contract termination

The builder of the new Stradiņš Hospital building complex LLC "Velve" considers the hospital's decision to unilaterally terminate the contract to be illegal and continues work, the company said in a statement on February 8.

“Velve” expects the involvement of responsible public officials in solving the problem, because it believes that the hospital's “ill-considered actions result in significant harm to the public interest, which will be paid for by the entire Latvian society”.

According to the building company, it is not bound by the hospital's notice of termination of a unilateral contract.

The company recalls that the contract was concluded before the war started by Russia in Ukraine and the consequences of the war had a significant impact on the performance of the contract, which led to changes in both the time and costs of execution of the works.

“Therefore, to accuse Velve of not being able to comply with the deadlines in exceptional circumstances, which nobody, not only in Latvia, but also in Europe and the world as a whole, could predict, is uncalled for and unfounded,” the builders said in a statement to the media.

“Velve” also criticizes the hospital for taking a long decision on amendments to the contract, which created a further chain reaction, because many other Latvian entrepreneurs and suppliers participated in the execution of construction works without “Velve”, all of whom had to align and reschedule their activities.

In addition, the builder says in a statement that more than 400 problems have been recorded at the site as of 2021, more than 50 letters have been sent where the builder pointed to the project's shortcomings and asked for quality solutions to be provided as soon as possible. More than 500 changes have been made to the building design and more than 200 drawings of changes have been issued covering all relevant sections of the building design.

“Velve” expressed its willingness to undertake to correct the deficiencies, if the commissioning party grants such authorization, and offers to construct the object within 17 months from the time of extension of the term (15 months for construction work and two more for the transfer of the object to the commissioning party) without requiring additional finances.

As stated by the Stradiņš Hospital, LLC “Velve” is unable to fulfil the obligations laid down in the contract – the time periods for construction are not observed, significant defects have been detected in the construction object which are not rectified, employment of non-harmonized subcontractors has taken place, as well as other violations have been recorded.

The construction contract, signed in August 2020, shall be terminated on Tuesday, February 13, according to the hospital's council. The hospital is due to take over the building site on February 20.

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