St Ives to Cambridge guided bus firm faces �45m bill

GUIDED busway contractor BAM Nuttall can expect a �45million bill from Cambridgeshire County Council that could take years to collect through the High Court.

The project, which is now expected to open next spring – two years late – was originally forecast to cost �116.7m, including the county council’s part in any cost overrun.

By the time it is finished, the busway is likely to have cost around �160m – and the council insists the contractor will have to pay the whole of the difference apart from around �1m escalation in the cost of land, some of it subject to compulsory purchase.

In the meantime, BAM Nuttall is losing almost �14,000 a day in penalty payments for delays beyond the February 2000 date when the whole project should have been handed over for driver training and public service. It had been expected to become operational in late April 2009.

Although the contract was let as a whole, work on the northern section on the disused railway line between St Ives and Cambridge Science Park seemed to be progressing well ahead of the southern section between Cambridge railway station and Trumpington and Addenbrooke’s Hospital.

Hopes of opening the northern section last autumn foundered over the contractor’s failure to correct six ‘defects’ identified by CCC, including lack of key expansion joints in the viaduct across the River Great Ouse between St Ives and Fenstanton, the inadequate gradient on the car park at the St Ives park-and-ride site in Meadow Lane, and year-round flooding of part of the parallel service road-cum-bridleway.

Now the county is convinced BAM will complete the southern section by the end of 2010, effectively completing the construction work. If the six defects – and any that may be identified on the southern section – are not dealt with in the following four weeks, the council will get another contractor for fix them and will add the cost to what it says BAM already owes.

CCC is adamant that its interpretation of the contract is correct – an assertion that is likely to be contested by BAM Nuttall in what is expected to be a highly-complicated and technical action in the High Court. It is hard to believe that the contractor would not have seemed more diligent in making up the lost time if it did not expect to win a significant part of its argument in court.

Although the Government has contributed �92.5m to the cost of the project, the county council – which promised the scheme would not cost Council Tax payers a bean – has had to borrow money to make payments to BAM that hugely exceed the original �87m construction cost (the rest of the �116m was land and CCC’s costs).

But council officials say the interest rate CCC is paying is far lower than that which BAM will have to pay under the contract when the overpayments are returned – if the High Court agrees that they should be.

In a paper to the county council’s cabinet next Tuesday officials say CCC is anxious to get the busway open – but ‘not at any cost, particularly in terms of future maintenance liabilities’. They fear that any attempt to speed up completion could effectively change the contract massively in BAM’s favour.