Bam Nuttall has agreed to pay Cambridgeshire County Council £33M to end the long-running guided busway dispute.
The council had sought £55M compensation from the contractor for delays on the Cambridgeshire scheme.
But Bam Nuttall last year issued a £43M counterclaim - so the settlement represents a £76M climbdown from the contractor’s original position.
It also means construction of the busway, which the council says was handed over two years late, cost the local authority £84.7M – just £800,000 more than the original price.
Cambridgeshire County Council leader Martin Curtis said: “I am pleased that this settlement has been agreed and that we can move on from what has been a difficult and time consuming dispute for us.
“The busway is a huge success and way ahead of passenger and business case forecasts. What is deeply disappointing and frustrating is that it has taken this long and cost us so much money to win our arguments and stop Bam Nuttall from trying to take tens of millions of pounds away from local taxpayers.”
Bam Nuttall parent Royal Bam Group said the settlement had already been incorporated in its figures for the half year to 31 June 2013 and so would have no impact on profit forecast for the full year.
The busway missed its original opening date in 2009, and the council charged Bam Nuttall a daily £14,000 fee for late delivery.
After a number of attempts, the scheme was finally handed over in May 2011.
Bam Nuttall then filed its counterclaim, citing mismanagement by the council’s project manager Atkins as the cause of the delay.
The council brought in Jackson Civil Engineering to complete additional work on the busway before it was finally commissioned in August 2011.
Some 5.6M journeys have since been undertaken on the route, well above expected levels. This has helped reduce traffic levels on the parallel section of the A14.
Curtis said: “We have always been very sure of our case and would have been willing to go to court to fight that case.
“However, following discussions with all group leaders, we felt that we would rather have certainty and settle the matter than risk mounting legal costs.”
The total cost of the busway, including land and staffing costs as well as interest, is £152M. The council has £8M still to find, which will be spread over payments from the capital budget over 25 years.
Luton wrangles continue
Bam Nuttall remains locked in mediation with Luton Borough Council over the Luton Dunstable busway scheme as preparations take place for its grand opening.
An official opening ceremony is due to take place on 24 September, with bus services scheduled to start on the busway the next day.
Although Bam Nuttall completed works ahead of a revised schedule, it is understood that the scheme ran over budget.
NCE revealed in June that the contractor and council were about to enter a mediation process to resolve a dispute over how much the council should pay for the scheme.
Luton Borough Council spent the bulk of the contingency it had built into the project’s budget when it agreed a 30-week extension during the design phase to allow for a value engineering exercise.
The client calculated its extra costs under the contract, which sees the two parties share savings or unplanned expenditure, at about £200,000.
The contractor was understood to have a different calculation, hence the need for mediation to find an agreement.
Luton Borough Council major projects manager Antony Aldridge told NCE this week: “The mediation process is ongoing.”
Bam Nuttall declined to comment.