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Crossrail | Huge cost hikes on stations and tunnels revealed


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!!!

Posted date

4 May, 2019

Posted time

4:45 pm