MIDLAND METRO builder and operator Altram is facing a liquidated damages bill of £5.5M plus escalating costs after client Centro revealed the project will open 10 months late.
The £145M Metro Line 1, which runs between Birmingham and Wolverhampton, should have opened on 2 August last year. But in a report to the West Midlands Passenger Transport Authority on Monday, Centro warned the project would not now open until 14 June of this year.
Sources close to the project claim that Altram is paying £24,500 a day in liquidated damages to Centro. Altram members John Laing, Italian rolling stock manufacturer Ansaldo Trasporti and transport operator Travel West Midlands, are also having to finance site costs and will miss almost a year of operating revenue from their 23-year concession.
The delays have been blamed on Ansaldo's failure to deliver vehicles on time and the large number of modifications needed to meet the requirements of the Railway Inspectorate and the Disability Discrimination Act (NCE 7 January). But a source close to the project confirmed that Laing is also being hit as it has equal commercial liability with the other Altram members.
The source claimed that lawyers for Laing are now battling with Ansaldo to try to 'claw money back under the terms of the contract'.
Laing made pre-tax profits of £32M last year but has already been forced to admit losses of up to £26M from the troubled Cardiff Millennium Stadium contract (NCE 29 October 1999). Further losses on the Midland Metro are likely to push profits down further when Laing announces its annual results in two weeks time.
But a Laing spokeswoman refused to confirm the extent of losses on the Midland Metro. 'There are extension of time claims still outstanding but any talk of liquidated damages is commercially sensitive,' she said.
Altram has already failed to meet two other revised opening dates set for January and April. A spokesman for Centro said it would 'continue to apply the full contractual conditions on Altram' and was now confident that the consortium would meet the new deadline.
'As long as they stick to the schedule they presented us with we are confident that it will open in June,' said the spokesman.
However, WMPTA members have been told the service will only operate at 10-minute frequencies initially. It could take a further two months to get the full six-minute service running, following delays to driver training.
'We have been given this wonderful story that the line will be open by 14 June but we won't believe any date until we are given notice of the final six weeks of testing,' said WMPTA vice-chair Stewart Stacey.
A spokesman for Altram confirmed that 98% of the civils work was complete and said the final items of work outstanding were related to staff training and gaining certification from the Railways Inspectorate.
'We know we've got a winner of a system and it will be well worth the wait,' he said.
As NCE went to press Ansaldo was unavailable for comment.