Engineering challenges at two Tideway sites in London have caused the project to implement cost saving measures to remain on budget.
In its financial results, Tideway’s parent company the Bazalgette Holding Group said the challenges, coupled with general cost pressure across the programme, had “substantially eroded available contingency”.
As a result it said it had begun to implement cost saving measures in partnership with its contractors and it remained focussed on “achieving the baseline target” of £4bn. To date the project has spent £1.48bn.
The results reveal significant challenges encountered at Blackfriars and King Edward Memorial Park Foreshore.
At Blackfriars, the report highlighted challenges caused by the proximity of the site to two large Victorian gas mains. It said to rectify the situation, Tideway was working closely with gas operator Cadent to investigate if the lines needed to be diverted to avoid damaging them. However, initial results from a damage assessment suggested that they may not require diversion, with final damage assessment results are expected by end of the year.
Meanwhile, at King Edward Memorial Park Foreshore cofferdam construction has taken longer than planned, due to unexpected ground conditions which required additional piles. It said this had resulted in the planned resequencing of works to alleviate the programme impact.
The report added that where non-compliance with the design was found, it provided a “robust challenge” and it was working together with its supply chain to address the underlying issues.
Despite the challenges, Tideway insists that the project will come in on time and on budget.
“There have been a number of complex engineering challenges and risks to overcome in the early stages of the project,” a Tideway spokesperson said. “With these behind us and having put in place several measures to reduce cost, our budget is intact.
“Tunnelling for the project started last week from our site in Battersea and we are set to complete the project on schedule and to budget.”
The cost saving measures include working with its main works contractors (MWC) to eliminate overlap, taking measures to increase productivity, undertaking value engineering and delivering overhead savings.
In addition to this, a marine logistics working group has been established to co-ordinate activities between sites and manage risk. The report added that the chief executive forum, which brings senior executives from Tideway, Jacobs and the MWCs, was proving beneficial in endorsing the approach to health, safety and wellbeing and reviewing the cost efficiencies.
An update will be published in its March 2019 annual report and accounts.
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