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SRA freezes ELL design to reassure contractors

DESIGN STANDARDS for the £750M privately financed East London Line extension will be frozen before contracts are signed to reassure contractors over payment, the project team said this week.

This will enable work packages to be signed off as they are completed and prevent changes in client demands from expanding contractors' workloads.

The project is being promoted by the Strategic Rail Authority (SRA) and the mayor's Transport for London (TfL) department and is being developed under the SRA's pioneering design build finance transfer (DBFT) procurement method.

It will go out to tender as soon as it gets the go-ahead from the Department for Transport.

Under the contract Network Rail will buy the project from the contractor with a single lump sum payment when work is complete and test running of trains has begun.

Contractors will have to borrow to fund construction work and are worried that the track operator could drag its feet over accepting the finished project, leaving them with a massive interest bill.

Progressive acceptance is designed to quell these fears.

But unlike conventional design and build contracts, sign off does not trigger milestone payments, said SRA director of projects and transactions David O'Reilly.

'It is not a guarantee to pay or an IOU, ' he said.

Instead the system is intended to give comfort that money will be released as soon as possible after construction is finished.

'We want the opportunity for change to be as limited as possible so there will only be a change for truly safety critical requirements, ' said O'Reilly.

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