Jubilee Line faces extra pounds 216m bill
Thursday 04 September 1997
Three big claims will add an extra pounds 216m to the budget, if London Underground agrees to pay out. A tunnelling project at London Bridge, run by Costain and Taylor Woodrow, is expected to top pounds 150m - double its original value.
Two south London station projects, at Southwark and Bermondsey, will add pounds 80m to the total project bill and builders Drake and Scull are looking to charge Tube bosses pounds 100m for a project originally priced at pounds 40m.
The cost of the JLE has already risen from the original pounds 1.9bn estimate because of changes to tunnelling techniques following the collapse of the Heathrow rail link tunnel and additional work needed at the Westminster and Canary Wharf stations. Ministers have made it clear that no more money is available.
According to Contract Journal, a trade magazine, builders blame frequent design changes, poor co-ordination and London Underground's "adversial management style" for the size of the claims.
One contract to build part of the new Westminster station has already seen London Underground and contractors Balfour Beatty/Amec clash over the cost over-runs. One source said the problem was that money was no longer being paid regularly.
"JLE management is questioning every claim the contractors make in minute detail," he said.
The poor relations have threatened to delay the project, set to start running in September 1998. London Underground will face penalties if Canary Wharf is not open on time. Builders are offering close to pounds 1,000 a week in bonuses and overtime payments to key workers under pressure from London Underground managers to avoid further delays.
The extension is considered the most important rail project in Europe, linking the site of the Millennium Dome to the centre of the capital and putting Canary Wharf just 12 minutes from Waterloo.
London Underground saysthe service will begin as planned. Executives point out that trains are being run on the Stratford to North Greenwich loop to evaluate the cab systems and signalling.
Mike Smith, the JLE's project manager, said there was enough slack in the budget to cover all the claims.
"The pounds 2.6bn will account for all the contractors' costs. With construction projects there are always claims that are far higher than contractors expect to get. And I would say that there is an element of that with these reports."
A spokesman for London Underground said: "With a project of this scope and complexity there are bound to be claims from contractors. Some have already been resolved and others are being submitted. Those that are being submitted are being examined to see whether they are justified or not."
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