St Ives-Cambridge guided bus - what an odd contract

PUBLISHED: 11:50 15 September 2010

Guided Bus

Guided Bus

Archant

I READ with interest your front page article ‘Busway set for Spring opening’ (The Hunts Post, September 1). I find the present situation rather amazing and cannot share Cambridgeshire County Council’s optimism that the cost to it and ultimately to all of us, will be little more than the original figure of £116million.

I READ with interest your front page article ‘Busway set for Spring opening’ (The Hunts Post, September 1). I find the present situation rather amazing and cannot share Cambridgeshire County Council’s optimism that the cost to it and ultimately to all of us, will be little more than the original figure of £116million.

What is more amazing is that from reading this article and many others over the last year or so, it would appear that Cambridgeshire County Council has borrowed a further £40m, much of which has been paid to BAM Nuttall, and that on completion of the works it expects to claim it back.

Why, if it is going to claim this money back, has it been paid to BAM Nuttall in the first instance? When a contractor is paid by instalments, he is paid for the quantity of work that has been properly carried out at that time, in accordance with the contract conditions, up to the contract price. He would be paid over and above this only for authorised variations.

I am a retired quantity surveyor, having worked in the construction industry for 50 years, and I am familiar with more commonly used forms of contract, but do not know of any where the contractor is paid up front for works that have not been properly carried out in accordance with the contract conditions.

This, I can only assume, must be the case here, otherwise why is money being claimed back?

It cannot have anything to do with the estimated two-year over-run of the contract, as this is covered by the provision of liquidated damages at £14,000 per day, this sum being progressively deducted from payments to BAM Nuttall once the original contract completion was passed.

Also, I find it very strange that, if all of the delay is down to BAM Nuttall, they would have let this go on for so long, as liquidated damages for the likely two-year delay will total at over £10m.

Every contractor that I have worked with, knowing a delay is down to them, would bend over backwards to complete as quickly as possible to avoid liquidated damages. Therefore, I find it very hard to believe that all of the delay can be down to BAM Nuttall, which is a very experienced civil engineering contractor.

From all that I have read it appears to be very wishful thinking on the part of Cambridgeshire County Council that it is going to be easy to recover monies from BAM Nuttall. The contractor will defend its position rigorously, and recovery could be years away, if anything is recovered at all. It rather appears that Cambridgeshire County Council is just putting off the day of reckoning.

TREVOR LEE

Oaklands

Fenstanton

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