Cambridge to St Ives guided bus disagreements will affect council's cash flow

CAMBRIDGESHIRE County Council has admitted that disagreements with it and the contractors building the guided busway will affect the authority's cash flow.

But project managers do not expect the project to have a serious impact.

Talks over the costs of building the busway remain unresolved and "this resolution process is likely to be protracted, having cash flow implications for the council".

The difficulties were revealed by Helen Maneuf, head of audit and risk management at the council, whose update will be reported to Friday's meeting of the audit and accounts committee.

Ms Maneuf said that under the contract payments a 'pain/gain' mechanism is used to divide over- or under-spends between the client and the contractor once the contract is complete.

Final costs of the busway cannot be calculated until this mechanism comes into force and for this to happen all parties need to reach agreement on the final target price.

"In order to reach this final target price it will be necessary to resolve a number of compensation events (which have cost implications) not yet agreed," says her report to councillors.

But Bob Menzies, head of delivery for the busway scheme, told The Hunts Post: "The route is no longer or wider now than it was going to be when the contract was awarded to [the contractor] BAM Nuttall, so we do not see any reason why the price should go up.

"The target price is the price agreed by the contractor and the council for building the scheme. The council currently forecasts we will pay the contractor �88.3m for building the busway. Any increase in target price must be demonstrated by the contractor."

The project was to cost �118m, including buying land, but The Hunts Post understands that costs have increased by about �40m. CCC is adamant it will not be picking up any additional construction costs.