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Crossrail | Huge cost hikes on stations and tunnels revealed

3151096 crossrailpic

Enormous cost increases on every single one of Crossrail’s seven central London station contracts have been revealed.

Cost hikes up to 500% of the original target cost have also been reported on tunnelling contracts as well as significant increases in route-wide civil engineering and systems integration contracts.

In total, public spending watchdog the National Audit Office (NAO) has revealed cost on “36 main works contracts on the central section have increased, including contracts for tunnelling, civil engineering, station construction and fit-out, and implementing the systems required to operate the railway and stations”.

Work on Whitechapel Station alone is forecast to bust its budget by 499%, according to figures released by the National Audit Office (NAO).

The Whitechapel project – being carried out by a joint venture including Balfour Beatty, Morgan Sindall and Vinci – is now estimated to cost £659M, £549M above the forecast £110M cost when the contract was originally awarded in 2011.

The NAO report concludes: “Whitechapel in particular has seen larger spend than anticipated as a result of difficulties building around existing London Underground and overground lines and station architecture.”

A £395M cost increase has also been forecast at Farringdon Station, while Paddington Station is now expected to come in £390M over its original budget.

Bond Street Station – which is no longer expected to open at the same time as the other Central London stations – is forecast to run £286M over budget, while significant cost hikes have also been forecast at Liverpool Street Station (£227M over budget), Tottenham Court Road Station (£184M over budget) and Woolwich Station (£164M over budget).

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.

Station contracts

STATION

CONTRACTOR

CONTRACT AWARD

ORIGINAL TARGET COST

FORECAST COST (Dec 2018)

COST INCREASE

Bond Street

Costain / Skanska JV

01 April 2011

£126M

£412M

£286M (277%)

Paddington Station

Costain / Skanska JV

11 July 2011

£181M

£571M

£390M (215%)

Farringdon Station

BAM Nuttall / Ferrovial Agroman (UK) / Kier Construction JV

23 November 2011

£239M

£634M

£395M (165%)

Whitechapel Station

Balfour Beatty Civil Engineering / Morgan Sindall / Vinci Construction UK JV

23 November 2011

£110M

£659M

£549M (499%)

Tottenham Court Road station

Laing O’Rourke Construction

22 June 2012

£98M

£282M

£184M (188%)

Liverpool Street Station

Laing O’Rourke Construction

01 March 2012

£147M

£374M

£227M (154%)

Woolwich Station

Balfour Beatty

09 September 2014

£70M

£234M

£164M (234%)

A revised timeline for the project was unveiled last week, with opening scheduled within a six month opening window set between October 2020 and March 2021.

Cost hikes on contracts relating to tunnelling, shafts and portals have also been reported. On the Eleanor Street and Mile End Shaft contract, carried out by a Costain/ Skanska JV, a 454% increase has been recorded - with the cost of the project ballooning from £46M to £255M.

Big increases have also been revealed on the Western tunnels contract (£259M over budget), Eastern tunnels (£226M over budget) and the station tunnels east contract (£264M over budget).

There has also been a £633M estimated cost hike on the Systemwide (tunnel track and electrical fit-out) contract, which is now expected to cost £956M.

NAO auditor general Amyas Morse said that the Crossrail Ltd’s “unrealistic” ambition to stick to a December 2018 opening date led to “damaging” cost hikes.

“Throughout delivery, and even as pressures mounted, Crossrail Ltd clung to the unrealistic view that it could complete the programme to the original timetable, which has had damaging consequences,” Morse said.

“The Department for Transport and Transport for London (TfL) must support the new Crossrail Ltd executive team to get the railway built without unrealistic cost or time expectations.

“While we cannot make an overall assessment of value for money until Crossrail is complete, there have been a number of choices made in the course of this project that have clearly damaged public value.” 

Tunnelling, systems and other civils contracts

CONTRACT

ORIGINAL TARGET 
COST

FORECAST COST
(Dec 2018)

COST
INCREASE

Eastern tunnels

£484M

£730M

£246M (51%)

Western tunnels

£490M

£749M

£259M (53%)

Thames tunnels

£196M

£229M

£33M (17%)

Station tunnels east

£246M

£510M

£264M (107%)

Pudding Mill Lane portal

£52M

£184M

£132M (254%)

Eleanor Street and Mile End shafts

£46M

£255M

£209M (454%)

Systemwide (Tunnel track and
electrical fit-out)

£323M

£956M

£633M (196%)

       

Crossrail Ltd chief executive Mark Wild said that he was taking the NAO report “very seriously”. 

He added: “I share the frustration of Londoners that the huge benefits of the Elizabeth line are not yet with us. A new leadership team and enhanced governance structure has been put in place to strengthen the Crossrail programme and put the project back on track.

“The new team has undertaken a detailed audit of the outstanding works and produced a robust and realistic plan to complete the Elizabeth line and bring the railway into passenger service at the earliest possible date.”

The NAO’s findings about management oversite echo the conclusions of a damning London Assembly Transport Committee report published last month. 

In response to the NAO’s report, Transport Committee deputy chair Caroline Pidgeon said: “Going forward Crossrail, TfL and the mayor must be realistic, pragmatic and honest with themselves and Londoners about any issues that occur and deal with them accordingly. They should not be afraid to face the music if a big stumbling block threatens the timing of delivery.

“Crossrail is a huge and complex project and it is understandable that not everything will go to plan. However, we must leave behind the days of chasing an opening date and focus on the successful delivery of a new line for Londoners.”

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Readers' comments (3)

  • I hope these figures are being scrutinsed carefully and contractors are not just being paid off to finish the job after they under priced to win. The compexities of existing services at Whitechapel were known at the start of the project, what's actually changed?

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  • Here we go again.. Always the poor contractor who gets blamed and made out to be a useless money grabbing outfit! How about gunning for some mean clients and useless designers for a change! Do we know who took the risk on services, probably the poor contractors who had to spend over £1m each in just tendering the project in a few months and is supposed to have worked out everything in that time! Consultants probably looked at it for years and then thought 'we'll let the contractor sort this'! I'm not bitter......!

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  • Philip Alexander

    These really are staggering cost over-runs and unlikely to be down to useless designers (well, not entirely!) but to parsimonious client at pre tender stage. And aren't the contracts design and construct anyway, in which case wouldn't the contractors be taking all the design and services/utilities risks?
    But the real culprit must be the form of contract which allows this crazy disconnect between what I generously assume is the "real" cost of each contract and the "tender" price. Unless of course, the contractors are all lying through their teeth and pulling the wool over the eyes of the poor dumb client (surely not?).

    How else could a contract price/cost blow out to up to 6 times the original "agreed" price? This is the ultimate gravy train par excellence. All of the contractors must have collectively decided that "one in, all in" and they would just take what they could get, justified, or not. Excuse me for asking, but is that allowed????
    So now it is glaringly clear that the NEC contracts used on Crossrail are heavily weighted in favour of the contractor (some might say that is a good thing) and seem to allow the contractor to cover up any of his own risk and competence deficiencies by obtaining the full cost of any over-run from the Client.

    Bring back ICE 5th for goodness sake and get the Client to spend some money and do the proper pre-tender investigations and proper design so that a large proportion of the contract risk can be passed to the contractor. These NEC contracts seem to be completely risk-free for the contractors, unless the Client is just so incompetent and weak (because he doesn't have the properly experienced and qualified staff) that for an easy life, he just signs a cheque for every little extra rather than properly scrutinize every claim. After all, it's only tax-payers' money and what's another gbp 2-3 billion? Some serious auditing needs to be done on these extra sums since they are so large that there appears to be ample scope for deliberate over-payment of contractors and that means the C word, corruption.

    I remember that the NAO produced a report in about 1998 which criticized the then Highways Agency for cost over-runs on their road contracts which averaged 29% over the tender prices and they really ought to do better. These were all ICE 5th contracts and so that was the catalyst for ditching a sensible risk-sharing contract for this NEC rubbish which allows a 500% increase. And the NAO report into Crossrail hasn't even made any recommendations for future contracts, unless you haven't reported them, so does that mean they see no means of preventing this cost disaster happening again. And TfL want gbp 40billion for Crossrail 2!!!

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