A number of major construction projects across Wales face an uncertain future after a well-known firm collapsed into administration. Bridgend-based Jehu Group, which operates across south Wales and the south-west of England, announced the news last week and said it was a "truly devastating day" for the company which was founded in 1935.
The family-run-and-owned firm has ceased trading blaming the situation on spiralling construction costs, with inflationary pressures decimating its cash reserves. In a statement, the company's directors, Marc and Simon Jehu, said it had been hindered by fixed-price contracts it had struck before the pandemic with profit margins being wiped out by construction cost inflation spiralling by more than 25%. They added that they had "completely exhausted every possible option" to keep the business going, but "found themselves with no choice but to cease trading".
"We did everything possible to avoid closure," they said. "But we were fighting a battle that simply couldn’t be won due to the successive economic shocks of the past couple of years. Our thoughts are first and foremost with our devoted colleagues who have lost their jobs, many of whom have given more than 25 years of service. We would like to thank the loyal and steadfast clients and supply chain who supported us, often carrying the added burden of those who sought to capitalise on our difficulties. We understand this is a worrying time for our colleagues, supply chain partners, and customers. We are working with [administrators] Begbies Traynor to get the best outcome from an impossibly difficult situation.”
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Before falling into administration Jehu Project Services had 15 live contracts delivering construction and development projects for housing associations and local authorities in Wales and south-west England, with a remaining total value in excess of £100m. Many of the Welsh projects, which have cost millions of pounds, have now been paused with clients faced with a difficult decision as to how best to get the projects over the line.
The affected developments in Wales are as follows:
Cascades Tower, Cardiff
Work began on this development in City Road in Plasnewydd in July with 48 affordable housing units and two commercial units set to be built on the site of a burned-down warehouse. The project is part of a £9m partnership scheme between Jehu and Linc Cymru.
The development consists of two apartment blocks with 48 one-bedroom properties catering for both couples and single people. Each apartment will consist of a bedroom, storage, shower/WC, and a combined kitchen and living space, while three communal roof terraces are also part of the plans. The site was once home to Rileys Snooker Club and later a discount furniture warehouse which was destroyed in a fire in April 2016 and later demolished.
Following the announcement that Jehu Group had entered administration a spokesman for Linc Cymru confirmed that work on the site had stopped with the housing association now "assessing their position." They added: “Linc has had the pleasure of working alongside Jehu on a number of successful developments and we are keeping in touch with them as this situation progresses.
“Our City Road development is in the early stages of construction and so far the site has been remediated and piled foundations have been placed. Work is currently stopped and this is also the case for our second site with Jehu in Porth, RCT, which is also in the initial stages of construction. We will now take time to assess our position in full and our priority remains the completion of both sites.”
Hayes Wood Road, Sully
This £9m social housing development in Sully got under way earlier this year. The 53-unit development, built in partnership with Vale of Glamorgan council, will contain a mix of houses and apartments.
The council said it could not disclose details about the current status of the project but expressed its sadness at the construction firm falling into administration. In a statement a spokesman said: "We are very sorry to hear about the demise of Jehu and for the impact this may have on local supply chains and businesses.
"The council is currently evaluating how best to now progress the project. We will be working with the administrator in relation to the contract in due course."
Coed Darcy, Neath
This multi-phased development of more than 130 houses is one of several happening at the £1.2bn Coed Darcy Urban Village at Llandarcy. Around 4,000 homes, as well as a metro link and shops, are being built at the housing estate on the site of a former oil refinery, with permission for the massive 25-year project granted back in 2008.
Upon Jehu entering administration housing association Pobl said they were "actively assessing" the impact that this would have on sites that the firm were contracted to build for them including the development at Coed Darcy. In a statement they outlined measures they would take to minimise disruption for customers including those already living 'on site' at developments.
"As a long-term partner of Jehu our thoughts are with everybody affected by the company going into administration," they said. "We are actively assessing the impact that this will have on our three live construction sites that Jehu were contracted to build for us.
"There are two locations affected where we have customers living 'on site' and would like to reassure them that we will do all we can to minimise any disruption this may cause. This includes, where necessary, our in-house trades team picking up responsibility for any issues that may occur while new homes are still within the standard 'defects' period."
They added: "We will also be prioritising customers who were scheduled to move into their new homes over the coming days and weeks and will be liaising directly with them to resolve their situation. Customers with any concerns should email newbuild-aftercarewest@poblgroup.co.uk"
Jehu was also delivering 50 homes for Coastal Housing Group at the site. A spokesman said they had contacted residents already living at the site as well as those in the process of buying properties there.
"Coastal has worked with Jehu Group across many projects over the years and our thoughts are with everyone affected by them entering administration," they said. "We have two sites that were contracted to Jehu Group companies and are working to understand how we can best progress these.
"There are occupied homes at both sites and we have contacted residents to provide reassurance and updated aftercare contacts. Our home sales company, Pennant Homes, has also reached out to affected pre-completion buyers to update them on an individual basis."
Leckwith Road, Llandough
These 40 affordable homes have been developed by Jehu Group in partnership with Hafod Housing Association. Work is under way on the development, which consists of a mix of one and two-bed flats built in three blocks.
A spokesman for Hafod said that it will be looking to appoint an alternative contractor to take over and complete the project with the site secured until an appropriate successor can be found. In a statement they added: "“We are sad to hear that our longstanding construction partner, Jehu, has entered administration, and our thoughts are with those affected.
“We will now take the necessary steps to appoint an alternative contractor to complete the development. In the meantime the site has been secured and is monitored regularly.”
The Grove, Abergavenny
The development, located in the village of Llanfoist on the outskirts of Abergavenny, is made up of 106 new homes with terraced, semi-detached, and detached properties available. With housing ranging from two- to five-bedroom properties it has been developed by Jehu alongside Candleston Homes.
While 69 of the home have been put on the open market the remaining 37 have been allocated as affordable housing for the local community. Prices for the open market homes start at around £165,000. Candleston were approached for comment but are yet to provide a response.
Pen Y Porth, Burry Port
This development in the coastal town of Burry Port is being built over three phases with the first residents moving in last year. A total of 105 homes are being developed on the site, in conjunction with Pobl, with a mixture of two-, three-, and four-bedroom homes being built.
The houses were built on land adjoining the former Gwdig Hotel in the town, which had been derelict for a number of years. When plans for the development were first announced a number of objections were lodged by residents with some claiming it would "ruin the area" and put a strain on local services.
The first homes were released for sale in the spring of 2021 with the second phase of the operation completed in March 2022. The development is currently in its third and final stage with more than 70 residents living on the site.
Pobl Group said that while they would continue to assess the impact that Jehu entering administration would have on its developments they also reassured its customers living 'on site' that they will "do all we can to minimise any disruption". "This includes, where necessary, our in-house trades team picking up responsibility for any issues that may occur while new homes are still within the standard 'defects' period," they added. "We will also be prioritising customers who were scheduled to move into their new homes over the coming days and weeks and will be liaising directly with them to resolve their situation."
Colchester Avenue, Cardiff
This development has seen a former Cardiff pub demolished to make way for a new apartment block. Some 50 flats are being built on the former site of the Three Brewers pub in Penylan with all of these apartments being developed as "much-needed" affordable housing.
Ten two-bed and 40 one-bed properties are being built by Jehu in partnership with Wales and West Housing, with the project currently at an "advanced stage". The pub closed in July 2019 and was said to have a "very dated appearance" when plans were approved last year but residents criticised the development, saying it would cause parking problems in nearby residential roads.
After Jehu announced they had ceased trading Jon Harvey, regional development Manager for Wales & West Housing, said: “It’s a sad time for the Welsh construction industry and our thoughts are with the people affected by the situation. Our development at Colchester Avenue, Cardiff, is at an advanced stage. We are currently considering our options to minimise any disruption and make sure the affordable homes Jehu Group were developing for us are completed.”
The Hedgerows, Swansea
This mixed development in the heart of the Gower contains 70 homes, with 34 of these being sold on the open market and more than half being allocated as affordable housing. The hugely popular site contains a mix of two-, three-, and four-bedroom homes for sale and rent with many of the homes already occupied.
Coastal Housing Group, who are involved in the project alongside Jehu, said it was "working to understand how to progress" the development following the contractor's announcement that it was entering administration. A spokesman said: "There are occupied homes at both sites and we have contacted residents to provide reassurance and updated aftercare contacts. Our home sales company, Pennant Homes, has also reached out to affected pre-completion buyers to update them on an individual basis."
Pont Aur Extra Care, Swansea
Jehu had also been working on this development – a joint project by Powys County Council and the Pobl Group – which will see the the existing sheltered housing complex in Ystradgynlais upgraded to include an extra care facility as well as accommodation for residents with some or no care needs. All Extra Care apartments will have accessible bedrooms, sitting room, a separate kitchen area, and a walk-in shower while communal spaces are also included in the development. The scheme will also add 12 more homes for local older people in an extension to the existing building. A spokesman for Pobl said that they were "actively assessing the impact" that Jehu ceasing trading would have on the site and reassured customers that they would "do all we can to minimise any disruption this may cause".
Dan y Myndd Extra Care, Porth
A new 60-bed Extra Care facility is also being built in Porth, with modern accommodation replacing the obsolete care home buildings that previously existed on the site but have now been demolished. The buildings were uninhabited for some time, with Rhondda Cynon Taf Council approving the new development in 2020 and work beginning on the site in September 2021.
The development is still in the initial stage of construction with Linc Cymru appointing Jehu as contractor for the project before the firm entered administration. A spokesman for Linc confirmed that work had now stopped on the site, adding: "We will now take time to assess our position in full and our priority remains the completion of [the site]."
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