Busway dispute rumbles on as contractual lessons highlighted

Cambridgeshire county Council is to seek £30.7m from guided busway contractor BAM Nuttall to cover the cost of repairing alleged defects in the infrastructure.

The Cambridge to St Ives busway opened in 2011 – more than two years late and costing  £147.7m, far in excess of the £84m target cost. A lengthy dispute between Cambridgeshire  and BAM Nuttall was finally resolved last September when BAM repaid the council £33m (LTT 6 Sep 13).

The settlement, however,   excluded a number of defects  because Cambridgeshire could not quantify their full effects at the time. These include: inadequate drainage at some locations; shallow foundations at some locations; joints between guideway beams that were too narrow to allow the thermal expansion of the beams; and movement of the bearing pads on which the guideway beams rest, causing ‘steps’ to appear in the guideway.

Councillors heard last week that BAM has not accepted liability for the defects and, indeed, the company has told the council that “neither the design nor the construction of the guideway is defective”. 

Councillors, however, resolved  to begin legal action to try and secure the £30.7m needed to fix the issues. “It is hoped that a settlement will be reached by negotiation or mediation, but this cannot be guaranteed,” said Bob Menzies, Cambridgeshire’s director, strategy and development. 

Cambridgeshire has released the final report of a review into the busway’s procurement and delivery. 

Bill Edwards, of consultant EC Harris, endorses the council’s decision to use a design and build contract, saying it was appropriate at the time. But he suggests some of the delivery problems might have been avoided had an Early Contractor Involvement (ECI) contract been used instead. 

“In my opinion, whilst not the full panacea, ECI contracts allow relationships to be built up between client, contractor, and the contract administrator. It allows the contractor to contribute to the design process to ease buildability and allows sufficient time to properly plan and de-risk the project, thus ensuring delivery to time and budget.”

Edwards says the Government should do more to encourage use of ECIs for local authority transport projects. “At present there remains a significant risk to a local authority if, having engaged an ECI contractor to develop the design and de-risk the project, the scheme ultimately fails to gain full approval from the DfT, in which case the local authority is left with a major cost and no benefit.

“I believe that some form of accommodation should be made between the DfT and local authorities to encourage the use of ECI, which, after all, is the main procurement route for the Highways Agency.”

LTT asked the DfT for its views on the recommendation, as well as whether Edwards’ comments remained relevant given the DfT’s reduced role in the local transport major scheme process since the introduction of the Local Growth Fund. “It is for local authorities to decide what kind of procurement they use for local majors, we don’t stipulate,” said a spokesman. “Many have chosen ECI.”

Edwards says Cambridgeshire originally wanted its busway designer, consultant Arup, to be retained by the successful tenderer for the design and build contract. “Imposing a designer on a contractor is never a good idea,” he says. “The market should be left to sort itself out. No company is indispensable and in my opinion the retained knowledge is not as important as one sometimes thinks. It is good to have a fresh pair of eyes on the project and to challenge some of the assumptions.”

He also says the busway contract gave the council’s contract administrator, Atkins, too big a role in the design process. “In design & build contracts the use of one consultant reviewing another consultant’s design should be discouraged. Design decisions must be left to the contractor and his own designer. A light touch by the employer’s contract administrator should be the norm.”

Edwards suggests the project steering group didn’t perform the correct role, appearing to act “more as a second tier project management role, seeking to understand the detail of the issues rather than, and this may be with the benefit of hindsight, dealing with a commercial contract that was heading for significant contract disputes”.

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