1.28 Notwithstanding the Department's protests about the completion status of a number of modules, including the two that housed the laboratories that did not comply with the most stringent sub-audible noise requirements (Paragraph 1.11), by the end of June 2004, certified completion of the last building module was imminent. Consequently, Laser was now close to receiving 95 per cent of the unitary charge. However, Laser informed the Department that it did not have the financial capacity:
■ To fund major remedial works to achieve the most stringent sub-audible noise requirements.
■ To fund upgrading the supply of power to the NPL (Figure 6), if these works were the responsibility of Laser.
■ To pay the Department £2.2 million of accrued, but unpaid liquidated damages.
Laser told us that the first of these three points was the most serious. Laser was of the view that the commitment to deliver laboratories that complied with the most stringent sub-audible noise requirements was financially open ended because it did not possess a proven design. The non-performance of these laboratories was the key problem preventing completion of the new buildings.
1.29 Given the construction and operational uncertainties that Laser continued to face, the company assessed that there were three ways forward for the project. These were:
■ the parties renegotiating Laser's rights, obligations and financing;
■ the Department terminating the contract; and
■ the parties negotiating a termination of the contract.
In July 2004, Laser put these options to the Department.