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TfL wins legal battle against roads JV

Pothole

A JV consisting of Colas, VolkerHighways and Aecom has lost its High Court battle with TfL.

The JV (CVU JV) lost its case over claims that strict working hours on the London Highways Alliance (LoHA) contract added costs and delays to the project.

High Court judge Justice O’Farrell ruled that TfL was right to argue that previously agreed rates applied under the London Highways Alliance Contract framework.

Justice O’Farrell said: “CVU makes a valid point that the framework agreement does not contain definitive hours and other conditions in which the works under task orders must be carried out.

“That introduces uncertainty as to the duration, scope and cost of work required. Any requirement by CVU to price such uncertainties would result in uncommercial high rates.

“There is a risk that contractors could include a premium for the risk of uncertain restrictions on working if forced to price them at the outset.”

The judge added: “However, that is balanced by the competitive tendering that applied for the framework agreement, and the volume and spread of works, from those at high risk of imposed restrictions to those at low risk of imposed restrictions. The inbuilt uncertainty introduced risk for both parties that could be assessed and evaluated.

“The purpose for which the schedule of rates was required was to provide consistency and certainty in the pricing of the works. The use of a schedule of rates enabled TfL to evaluate the tenders on a fair and equal basis. The fixing of rates and prices for the framework agreement provides opportunity and risk for both parties.”

Following the ruling, a spokesperson for CVU JV told New Civil Engineer that it still plans to pull out of the LoHA contract, citing the government pulling road subsidies in the capital as the real reason behind the withdrawal.

A joint statement from the JV said: “Colas, VolkerHighways and AECOM, would like to reiterate that they are in discussions with TfL to consider stepping down from core work in the central London area.

“This action was agreed prior to the result of the recent court case being announced, and is in response to the removal of the government operating subsidy.”

The removal of the funding prompted TfL to announce in February this year, that it would only carry out “essential” road projects for the next two years.

The LoHA contract is divided between four area-based joint highways contractors and includes both local and TfL road maintenance and improvement works. CVU was responsible for the central London section and started on 1 April 2013.

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