Foreign firms scoop Tube work

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The Independent Online
LONDON Underground has provisionally awarded the lion's share of the tunnelling contracts on the pounds 1.8bn Jubilee Line extension project to foreign companies.

Three of the five tunnelling contracts - which are worth more than pounds 360m - have gone to companies from outside the UK, while a fourth has gone to a consortium from the UK, Germany and France.

Industry experts say the awards will give foreign firms a head start for other possible large civil projects such as CrossRail and the Hackney- Chelsea Tube line.

The contracts have yet to be officially awarded, and they cannot be granted until the Secretary of State for Transport, John MacGregor, formally gives the go-ahead for the project, which is expected in the next few weeks. However, provisional letters of intent have been sent to those firms to which the contracts will be granted.

According to analysis by Construction Weekly magazine, two of the largest contracts - the pounds 80m project to tunnel from Waterloo to London Bridge and build Southwark station, and the pounds 70m contract to tunnel from London Bridge to Canada Water and build Bermondsey station - have gone to a group with little experience in the UK, formed by Aoki of Japan and Soletanche of France.

The pounds 30m contract to tunnel from Canada Water to Canary Wharf has also gone to a relative unknown in the UK, Italstrade, a consortium of three firms led by one owned by the Italian government and another facing problems because of the massive fraud investigations going on in Italy.

The pounds 75m contract to tunnel from Canary Wharf to Canning Town and build Greenwich station has gone to a bid from Sir Robert McAlpine, Wayss & Freytag of Germany and Bachy of France.

Only one tunnelling contract has gone to a wholly British group, with Balfour Beatty and Amec combining for the pounds 100m project to tunnel from Green Park to Waterloo and build Westminster and Waterloo stations.

The awards come after London Underground invited a large international contingent to bid. It is understood to have been impressed by bids using a controversial Austrian tunnelling method, which is supposed to be quicker and cheaper but may raise issues about subsidence for buildings along the route of the tunnel. The lack of infrastructure work in the UK over recent years has meant that British firms have little experience in the latest methods.

The Labour Party plans to raise the issue in Parliament. Harriet Harman, the shadow chief secretary of the Treasury, said: 'We used to dig tunnels all over the world. Now our industry has shrunk so much that we have to hire foreign expertise. British manufacturing and engineering companies are simply not getting the benefit of the long-overdue upturn in infrastructure spending.'

(Map omitted)

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