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Overheated market claims first victim as Midlands rail project scaled back

Coventry City Council this week decided to scale back plans for a £19M upgrade of the Nuneaton to Coventry rail line, blaming overheating in the signalling market.

Nuckle project

The Nuckle project will increase services between Coventry and Nuneaton

The council’s cabinet was told yesterday that the full scheme, including two new stations built and a doubling of train frequencies, will have to be built in stages after tenders to carry out the vital signalling work came in three times over budget.

“The civil and track tender process resulted in a tender broadly in line with expectation,” says the council in a paper to its Cabinet.

“By contrast, the signalling process resulted in bids three times the estimated works cost,” it says. “The reason for this appears to be an overheated signalling market.”

NCE exclusively revealed in September that contractors were warning that there was such a glut of tender opportunities ahead, they were going to have to start choosing which projects to bid for (NCE 26 September). They warned that smaller clients were likely to miss out.

“When we sit down and look at what we have to bid, it is a massive list, with loads of big projects,” a bid leader at a major UK contractor told NCE at the time. “And that’s before you get to all the little ones. We can’t cope.”

Coventry City Council’s experience appears to bear this out.

“As Network Rail moves from the current funding period to the next funding period, the market is extremely busy,” said the council.

“Contractors are engaged on delivering backlog requirements for the outgoing period while at the same time are engaged preparing tenders to secure work for the incoming funding period.

“Within this environment the level of signalling required was simply not big enough to appeal to the key signalling deliverers.

“Since funding to cover this level of overspend is not available from the partners, the procurement process was declared unaffordable and void.”

The paper adds that delays to Network Rail’s electrification programme mean that the additional rolling stock needed for a two trains per hour service will not be available until 2017.

Coventry plans to build the scheme in two phases with an overall completion date of 2017 - four years later than planned. But it has yet to devise a funding strategy for the second phase that includes the signalling works.

The first phase alone of what is called the Nuckle project will now cost £17.4M.

The council and its partners Warwickshire County Council and West Midlands transport body Centro had hoped to build the entire scheme for £19.2M.

Buckingham Contractors has been selected to do the work on phase one. This involves extending platforms at Bedworth station and building new stations at the Coventry (Ricoh) Arena and Bermuda Park, Nuneaton. These are due to open by May 2015.

The council says that this two stage approach has been agreed with the Department for Transport. It is contributing £5M to phase one, with a further £5M held back for phase two.

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