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Exclusive | Crossrail to pay contractors lump sums to finish job

Farringdon station glass fibre reinfoirced concrete panels line cross passage and terrazzo flooring

Crossrail bosses are negotiating extra payments to its contractors so that they can finish remaining Crossrail station works, New Civil Engineer can reveal.

Lucrative one-off payments are to be thrown at contractors to incentivise them to “pick up the pace” of works at all remaining stations, according to multiple sources.

Work on the project has slowed as contractors had “little money to make” by finishing the job under the original contract terms.

It comes after Crossrail’s latest chief executive Mark Wild told the London Assembly transport committee that there were still “many, many thousands of hours” of work to do before station fit outs complete the central station fit-outs on the central underground section are complete.

Wild, who took on the role in November after incumbent Simon Wright was ousted, said it could take up to three years to fully complete the project.

“What is happening at Bond Street and some of the other stations is that the contractors know they have a bit more breathing space after the delay announcement made last year and so they have shifted their works programmes to the right,” one source said.

“Over the last few months negotiations have been going on with contractors about lump sum payments to drive out the current problem of contractors dragging their heels.

A second source told New Civil Engineer that the NEC3 form of contract used to promote collaboration has not given client Crossrail Ltd enough “clout” to force contractors to perform.

“Contractors are now incentivised to finish the work as quickly as possible in order to get paid quicker. The quicker they finish the job, the quicker they are paid.”

The source added: “Contractors’ enthusiasm to complete the works is understandably extremely low as they have been paid for most of it already.

“The rates which they put in, in 2011, were very aggressive so now they are making very little money to finish the works.

“There simply are not enough people on site as they [contractors] are not making enough money to finish the job off and can make much more money going elsewhere and so that is what they are doing.”

All stations are now expected to be completed by the summer, with the exception of Bond Street station which is likely to take much longer.

The source added that Crossrail “won’t be strong-armed” into paying “excessive amounts” to contractors and if the line has to open without Bond Street then it will.

A third source said that repackaging the contracts is the logical way to complete the project at this late stage.

“This was a programme with many interfaces. The way it was structured was built to cause delays – and it did,” the source said. “The whole dis-integration of the programme makes is quite difficult to unravel just where accountability [for delays] lies.

“So eventually you get to the point where the only way to get there [work finished] is to say ‘we’ve got this much work to do and this is the best way to package it’.”

That the stations are so far behind schedule came as a major surprise, with Crossrail and Transport for London (TfL) previously claiming that complex integration of multiple signalling systems were behind the severe delays announced in late August last year.

At the time a one-year delay was announced but Wild has since told the London Assembly transport committee that he faced “one, to two…, to three” more years’ work to finish the job, stressing that there were actually “two dominant critical paths” and that station construction was now more critical.

Wild confirmed that none of the line’s central stations have yet been completed while crucial dynamic testing of trains and signalling systems has yet to begin in earnest after a series of ineffective tests in 2018.

He tore into the efforts of his predecessors and their key main contractors before unveiling a catalogue of work still to be done.   Wild took charge of Crossrail in November having moved over from his role as managing director for London Underground at TfL.

He said that at the time of the announcement of the then one-year delay last August, Crossrail’s revised programme was “a country mile away” from where it stands today and that no-one understood the magnitude of the unfolding problem.

“I think the enormity and complexity of Crossrail in all manners: the stations; the trains; the signalling systems; the software integration; the control systems; the interface with Network Rail; the truth is that the complexity was not fully understood,” he said.

Wild said work was underway to devise a programme that allows contractors to get the stations finished in a way that does not overly impact on systems testing.

He suggested the central section of the line could be opened by “omitting” one or two of the stations.

Equally, the plan could be to open the stations simultaneously but with limited functionality.

Revised plans will be tabled to the TfL board this month.

“The precise sequence is difficult: you’ve got to go to every single contractor, every subcontractor.

“And if I was going to be critical of the past, then it’s the work we should have done a year ago,” he said.

Wild said that he hoped to publicly reveal the latest revised opening strategy by the end of March.

He also levelled criticism at some tier one suppliers who he said failed to offer ideas on how to mitigate the delays.

Referencing a meeting held in August to flush out ideas, Wild said: “Siemens, Bombardier, Costain/Skanska, Balfour Beatty – they are the people actually delivering the work. They were asked if they had any ideas. It became clear they didn’t.”

All contractors working on the job have been contacted and declined to comment. 

Central station contracts:

StationContractorContract awardValue
Bond Street Costain / Skanska JV 01 April 2011 £100M-£250M
Paddington station Costain / Skanska JV 11 July 2011 £250M-£400M
Farringdon station BAM Nuttall / Ferrovial Agroman (UK) / Kier Construction JV 23 November 2011 £250M-£400M
Whitechapel station Balfour Beatty Civil Engineering / Morgan Sindall / Vinci Construction UK JV 23 November 2011 £100M-£250M
Liverpool Street station Laing O’Rourke Construction 01 March 2012 £250M-£400M
Tottenham Court Road station Laing O’Rourke Construction 22 June 2012 £100M-£250M

Central stations: Key players

Bond Street

Crossrail station designed by WSP and built by a Costain/Skanska joint venture worth up to £250M at contract award. Works must integrate with a separate £300M London Underground upgrade built by a Costain/Laing O’Rourke JV and designed by Atkins.

Tottenham Court Road

Crossrail station designed by Arup and built by Laing O’Rourke in contract worth up to £250M. Integrates with London Underground upgrade project built by Taylor Woodrow/Bam Nuttall JV in £600M contract  and designed by Jacobs.

Whitechapel

Station built by Balfour Beatty/Morgan Sindall/Vinci Construction JV in contract worth up to £250M and designed by Arcadis

Liverpool Street

Built by Laing O’Rourke in up to £400M deal. Designed by Mott MacDonald

Paddington

Designed by Aecom and built by a Costain/Skanska JV in an up to £400M deal. Ties in to Paddington Integrated Project that includes a new Hammersmith & City Underground station built by Carillion and designed by Mott MacDonald

Farringdon    

Crossrail station built by Bam Nuttall/Ferrovial Agroman/Kier JV to an Aecom design. Integrates with Network Rail station built as part of Thameslink programme by a Costain/Laing O’Rourke joint venture designed by Atkins

 

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Exclusive | Crossrail to pay contractors lump sums to finish job

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Readers' comments (8)

  • And the lessons learned are...?

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  • This sounds very one sided. I hope someone's looking at penalty clauses.

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  • "Penalty clauses" as such are illegal. There are things called liquidated damages which can be applied. However, if attributing blame is difficult then the only beneficiaries are lawyers, with huge amounts of management time spent on arguments rather than on completion of the job.

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  • I know, lets introdduce retention, crazy old fashioned idea I knoe.

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  • Sounds like someone got something very wrong!

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  • Having worked on the contracting side of the industry for over forty years, I don't remember ever not finishing a project because there was no money to be made! If that were so, there would be a huge number of projects sitting there unfinished!

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  • Philip Alexander

    Every day, another disgraceful revelation of yet more of the Crossrail fiasco. This is now getting beyond a joke, I can't keep up with the incredible incompetence (and worse?) of project management, senior Crossrail executives, Board and who else? TfL, London Mayor, Central Government? Why should we trust any of them ever to deliver a major project ever again? And to think that HS2 has been approved to be delivered by the same group of "you scratch my back" individuals and companies is truly staggering.
    And we'd like some proper investigative journalism by NCE please, instead of the usual sycophantic praise of such a wonderfully managed major project. There is so much dirty linen to be discovered here that it ought to be a journalist's dream come true. The King's new clothes really have been revealed for the sham they are after the promises stretching over years, whilst all the time, everyone on the project knew (it's impossible anyone associated with the project at any sort of level didn't know) that the project would be years late and cost way more than the already obscene £15 Billion figure. But to only come clean a few months before the due completion date appears to show deception of the highest order, as if to wave two fingers at the taxpayer.
    We really need to ask TfL for the calculations of the Benefit/Cost ratio (BCR) used to justify this project, since it is almost certain that if the true cost, true opening date and true revenue had been used, it would (or should) never have got off the ground. And how about finding out exactly what the conditions of contract for each of the many contracts are so that we can judge whether the contractors should be entitled to anything over their contractual entitlements. This latest suggestion by the new senior management (oh please) to bung them a few extra billion £ £ £ of taxpayers' money is disgusting. Sounds suspiciously like extortion, blackmail, or ransom money to me. And weren't we all being told at the start of the Crossrail fiasco that due to the use of "state of the art" collaborative contracts that everyone's individual ambitions were all perfectly aligned so that the contractors would deliver on time and on budget and it would all be sweetness and light. Sorry, I've just fallen on the floor laughing.
    Surely to goodness there should be an urgent rigorous Public Inquiry with the full force of judicial disclosure to get to the bottom of this Crossrail mess and HS2 should be suspended until the results of the PI were clear so that the scale of dishonesty over budget and time can be considered before finally cancelling HS2 because its whole premise is built on similar lies.
    I have worked in this industry for nearly 50 years and have never seen or met a contractor who isn't going to try to screw as much extra money out of a contract as possible, even when clearly not justified. It's about time that clients, sponsors, promoters, funders of all projects got wise and crafted a contract which dealt with such a fundamentally opposing ambition from that of the client. That's right, it was called the ICE 5th edition, a much maligned document but nowhere near as damaging to the clients' pocket as these "collaborative" contracts of recent years.
    Does all this sound disturbingly familiar? Well, the same clowns in government, Dept of Transport and the industry are also in charge of the white elephant to end all white elephants, HS2. And they expect us to believe that this even more complicated project, breaking even more new technical grounds (400kph, really???) will be delivered for what they claim, now, of "around" £56 BILLION and on time. Well, excuse me whilst I roll around on the floor laughing - again.
    It has now been conclusively proven that the collective senior construction industry management and contracting expertise in this country are incapable of delivering a major rail project of such complexity to budget and time and should not be believed when it comes to their promises regarding HS2.
    There is no way that HS2 can be delivered for less than £100 BILLION in less than 15 years based on Crossrail and HS1 costings. It is therefore completely and utterly uneconomic and MUST be cancelled immediately.

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  • I say Philip Alexander should be an editor for NCE, considering his continual insights.

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