Guided bus project 'could be £30million over budget'

PARTS of the planned £116.27million St Ives-Cambridge guided bus project have been put on hold and the scheme could be as much as £30million over budget, according to a source close to the scheme. Officials at Cambridgeshire County Council, which is prom

PARTS of the planned £116.27million St Ives-Cambridge guided bus project have been put on hold and the scheme could be as much as £30million over budget, according to a source close to the scheme.

Officials at Cambridgeshire County Council, which is promoting the scheme with £92.5million of central Government cash, have refused to confirm the figure but have said Council Tax payers will not have to pay up.

They say the contract with civil engineers BAM Nuttall is so tightly drawn that nearly all of the overspend will fall on the contractors, and the county council's share of any extra cost was included in the original budget estimate.

However, as a precaution, terminal buildings at park-and-ride sites at St Ives and Longstanton will not be built as planned, though they may be constructed in future by another contractor using money saved from the Nuttall deal.

The car parks and bus shelters at the two sites will still go ahead.

The project is still on track to open next spring, possibly as early as April, with buses operating between St Ives and Addenbrooke's Hospital.

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But because of the escalating costs of the scheme contractors Nuttall have lodged a raft of claims for "variations" of its contract.

The civil engineering costs are believed to have gone way beyond the original £90million for the project - the balance of the £116.27million is made up by land purchase, design costs, supervision of the contract and council salaries.

Although such claims are routine in major civil engineering projects, involving a progression through posturing, adjudication, arbitration and, possibly, action in the High Court, the county council believes its position is watertight.

Bob Menzies, who is responsible for delivering the scheme, told The Hunts Post: "We believe there is a small risk to us. We also believe the contractors' cost estimates are pessimistic."

However, if the £30million overrun reported to The Hunts Post by a source close to the scheme is right, it represents an escalation of around one-third on the civil engineering element of the project.

Even with the degree of risk Nuttall has accepted incorporated into the price, it suggests the contractor faces a significant loss on the work.

Neither the county nor Nuttall would comment on the extent of the cost overrun - but nor would either deny the £30million suggested by this newspaper's source.

A variety of factors may have contributed to the cost overrun, though the county council remains very positive about the quality of the work Nuttall is doing.

One factor for the overrun is likely to have been caused by inflation in the cost of materials and labour in the construction industry. While long-term civil engineering contracts usually include clauses to compensate for changes in circumstances that neither party could have reasonably foreseen, Nuttall may have a hard time proving this was the case with the rising industry costs.

Deferring the park-and-ride buildings means that CCC will save £1.2million in the short term, but the decision could deter some drivers from making the shift to the guided bus.

The council, which says it has no idea how long the dispute-resolution process will take, insists that the money will still be there in the future to build the park-and-ride sites properly when the issue is cleared up. In the meantime, there will still be toilets and bus shelters.

The council believes its exposure to its share of cost-overruns under the contract will not exceed £5million, and that has already been included in the £116.27million cost.

Cabinet member for transport Councillor Matt Bradney said the decision to defer the terminal buildings was "cautious and prudent" and would not affect the operation of the project.

The Liberal Democrat opposition believes the busway was now forecast to cost £6million more than expected.

Group leader Cllr David Jenkins said: "All credit to the officers for agreeing a tough contract and managing this difficult project, but nothing can conceal the fact that it was an unpopular project to start with and that it was squeezed into a financial straightjacket.

"The Tory cabinet made strong commitments when it decided to go ahead with this project in July 2006 and it has failed to meet them. It has broken its promises to the people of Cambridgeshire.

"We were promised top quality park-and-ride facilities in Longstanton and St Ives when it opened, and now we know we are not going to get them until later."

The issue will be debated by the county council's cabinet on December 16.