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Bam Nuttall faces second busway cost overrun row

Contractor Bam Nuttall is embroiled in a dispute about costs on the £90M Luton Dunstable busway project, the project’s client said this week.

The contractor will enter a mediation process with client Luton Borough Council this month.

The news comes as Bam Nuttall remains in dispute with Cambridgeshire County Council over the cost of building its guided busway.

It is understood that the Luton scheme has run over budget, with the council’s calculation of how much it should pay differing from that of the contractor.

“There are still some painful negotiations [to come] as the contractor will want to put the extra costs onto us,” said Luton Borough Council corporate director of environment and regeneration Colin Chick.

“We have agreed to mediation in June to resolve this in an informal way and avoid [a repeat of] the Cambridgeshire situation.”

The council spent the bulk of the contingency it had built into the scheme’s budget when it agreed a 30-week extension during the design phase to allow for a value engineering exercise.

Chick said the council had received 485 early warnings from Bam Nuttall of potential extra costs, of which 464 had been resolved.

The client calculates its extra costs under the contract, which sees the two parties share savings or unplanned expenditure, at about £200,000.

Bam Nuttall said it could not comment on contractual issues. The contractor is understood to have a different calculation, hence the need for mediation to find an agreement.

It is the second time Bam Nuttall has been drawn into a dispute about costs on a busway scheme.

Bam Nuttall last year issued a £43M counterclaim to a £55M claim made against it by Cambridgeshire County Council in September 2011 seeking compensation for delays on the Cambridgeshire guided busway.

The case is due to go to court early in 2014.

A Cambridgeshire County Council spokesman last week denied reports that it wanted to end the dispute.

“We are not seeking to settle out of court and remain confident that we will ultimately win the case,” he said.

Construction of the 13.4km Luton to Dunstable busway reached a landmark on 28 May 2013 when the last of more than 4,500 concrete beams for the guideway section was laid.

The busway from Houghton Regis to London Luton airport includes 7.5km of guideway, comprising 4,516, 4.8t, precast concrete beams and 2,598 pads to support them.

Chick said the busway should be live by the end of August, reducing congestion in the town centres and linking isolated communities to jobs and schools.

The construction programme is now in its final stages, with completion of the beam alignment and the “flares”, where buses join and leave the guideway, scheduled for this week.

Test runs along the busway are due to begin on Monday.

The contract

Luton County Council awarded Bam Nuttall the £51.6M construction contract in May 2010 for the Luton Dunstable busway main works.

The contract is based on the NEC Engineering and Construction Contract, Option C and involves: around 7.5km of twin track kerb guided busway; 2.5km of unguided busway (bus only road); reconstruction, refurbishment or demolition of bridges, associated earthworks, drainage, fencing, landscaping, planting; and, five stations.

It also includes an option for the provision of a new public transport interchange at Luton station.

Luton busway: Scheduled for August opening

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