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Crossrail contractors ‘likely’ to demand more money, auditor warns

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Transport for London (TfL) auditor Ernst & Young has warned that Crossrail contractors are “likely” to demand more money as construction winds up.

In its end of year audit of TfL’s accounts, Ernst & Young warns that “the close down of contracts over 2019/20 and later, is likely to result in further claims from contractors”.

The auditor adds that a push to meet Crossrail’s revised opening date – between October 2020 and March 2021 – could also lead to contractors claiming more money.

“From a group perspective the largest in progress capital project is Crossrail which has faced significant overruns. We have completed a statutory audit of Crossrail as a subsidiary of TfL,” Ernst & Young’s audit states.

“The close down of contracts over 2019/20 and later, is likely to result in further claims from contractors and subcontractors, particularly if deadlines are squeezed to meet the opening date.

“This does give rise to the risk of additional costs and pressures on funding for TfL as an organisation which will require careful management.”

The warning comes after huge cost hikes of up to 500% were revealed on 36 contracts relating to tunnelling, station work and civil engineering.

New Civil Engineer understands that these costs include lump-sum agreements made with contractors after it emerged that Crossrail would miss its December 2018 opening date.

Ernst & Young also warns that “uncertain” funding sources and “lost revenue for the delayed opening” could mean “proposed or current projects may need to be altered”.

The report adds: “The revised funding plan, whilst agreed, requires TfL to fund any excess costs over and above the current planned spend. Should this occur the knock on impacts could be significant causing deferral or cancellation of future projects.”

In December 2018, TfL revealed that procurement for upgrade works at Camden Town station as well as works along the Piccadilly line would be “discontinued”.

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