SCARBOROUGH BOROUGH Council was this week locked in battle with contractor Edmund Nuttall over 150 claims worth £27M for work on its sea defence project.
If paid, the claims would double the cost of building the sea defences to £54M.
Project manager for the council, High-Point Rendel, disputes the claims and says the fi al construction cost should be £34M.
The council and Nuttall have both employed lawyers to review the claims.
Details of the dispute emerged in a leaked report by council chief executive John Trebble and head of legal services Ian Anderson. The report was due to be presented to the council cabinet on Tuesday.
It was also revealed this week that project sponsor the Department for the Environment, Food & Rural Affairs (DEFRA), has agreed to fund some of the cost overruns.
'The council has demonstrated that some additional costs are eligible for grant aid and as a consequence DEFRA has increased the grant approved costs to £40.2M, ' said a DEFRA spokesman.
DEFRA has also agreed that the grant funding can be used to pay for the lawyers reviewing claims.
If costs escalate beyond this £40.2M threshold the council must make another case to the government to secure more money. Otherwise costs could fall to local taxpayers.
The leaked council report says consultancy fees for the project have also escalated from the originally budgeted £1.2M.
'Compensation event claims have continued up to the present and High-Point Rendel has increased the size of the team managing the works in response, ' it says.
Its costs are currently £3.25M. These will necessarily increase given that compensation events have continued to be raised by the contractors, ' it says. They are on top of the contractor's costs and could push final project costs over £58M.
The sea defence project has been beset with problems since it began on site in summer 2002.
Work was scheduled to fi nish in December 2003 at a total cost of £28.4M.
But unforeseen ground conditions, design changes and working hours restrictions pushed back the schedule and raised costs (NCE 1 May 2003).
Then in August 2004 the mass concrete Accropodes used in the scheme to defend the coastline began to crack (NCE 9 August 2004).