From our legal correspondent...

A post I wrote back in June 2020 attempted to bring readers as up to date on the legal claims surrounding Busway construction as was possible, given the paucity of information in the public domain. If nothing else, it served as a reminder that the issue is far from resolved.

Fast forward 7 months - which probably counts as "speedy" in the legal world - and the current case has taken another turn. It's reported that BAM Nuttall, alongside insurance company Zurich, have recently submitted a counter claim, alleging that the County Council owes them £1m in "retention fees" from when BAM Nuttall was hired in June 2008.

So to recap: the County Council is claiming £74m, whilst the contractors and their insurers are claiming £1m or so. Don't expect a speedy resolution!

The information comes from a legal news website Law360 (part of Lexis Nexis). Unfortunately, most of the article sits behind a paywall, but in case any of you has access, here's the link.

Busway construction issues - it's back to court again!

Longer-term readers of this blog will be aware that the original construction of the Busway raised a number of issues regarding costs and alleged construction defects. Back in August 2013, the County Council and contractors BAM Nuttall settled a case out of court. There's more information about this in a couple of our 2013 posts - those of 30 August and 8 September.

Then in December 2016, New Civil Engineer reported that the County Council was suing BAM Nuttall for a £31 million for repair of defects - see the 15 December post. I haven't been able to trace what happened to that claim.

Fast forward to 2020... and the Cambridge Independent reports that the County Council is again pursuing a case against BAM Nuttall. And again over the cost of repairing what the Council alleges are defects. The Cambridge Independent report can be found here.

Now, given the speed at which civil court cases proceed it's possible that this latest one is simply a development from the 2016 claim. Or it might be entirely different.

BAM Nuttall is defending the claim.

£31 million claim against busway contractor

Cambridgeshire County Council is suing BAM Nuttall for £31 million for repair of defects on the guided busway track. BAM Nuttall is the contractor which built the busway.

https://www.newcivilengineer.com/latest/cambridge-council-to-sue-bam-for-further-31m/10015672.article

More about Cambridgeshire County Council's dispute with BAM Nuttall

A long letter in this week's Hunts Post (25 September, page 7) explores why the County Council's contract with BAM Nuttall may have gone wrong. There letter explores the variety of ways in which such contracts may be organised depending on circumstances. The punch line of the letter is that someone (or persons) in the Council made a mistake that was to the detriment of the Council's finances, and that person should be held to account. Read the letter here.

BAM Nuttall dispute in Hunts Post

Two letters in this week's Hunts Post  (11 September, page 6) about the County Council's dispute with BAM Nuttall over the building of the busway.

One suggest that the County Council has misled the public over the matter, and the other talks about the overrun of costs falling as a burden on the taxpayer.

BAM Nuttall's decision to settle out of court

Hugh Taylor has emailed me the following, which is about why BAM Nuttall decided to settle out of court with Cambridgeshire County Council:

Tantalisingly, the New Civil Engineer website posted a news story on 
Wednesday, with this beneath the headline:

"Bam Nuttall has explained its decision to settle in its dispute with 
Cambridgeshire County Council over costs to build its guided busway."

http://www.nce.co.uk/news/business/nce-live-news-updates-wednesday-4-september-uk-slips-to-10th-in-global-competitive-index/8652674.article?blocktitle=NCE-Live-Updates&contentID=8860

Given that Bam Nuttall has consistently refused to comment on the 
settlement, this was an intriguing prospect. Unfortunately, only NCE 
subscribers are permitted access to the details - and the story doesn't 
even turn up in the daily package fed to content aggregators such as 
Factiva or ABI/INFORM.

What does turn up in the package for 5 September, though, is a story 
about both the Cambridge and Luton busways. Much of the Cambridge 
section of this is a reworking of the County Council's press release, 
but there are a few points which are of interest, given that they come 
from an unbiased source, and one with a considerable reputation in the 
engineering world.

First, there's confirmation of the figures: "... Bam Nuttall last year 
issued a £43M counterclaim - so the settlement represents a £76M 
climbdown from the contractor's original position." This is the sum the 
County Council would have had to pay if it hadn't challenged the 
contractor's bill.

Then there's a clear explanation of just how little the "extra" work 
cost the Council: "It also means construction of the busway, which the 
council says was handed over two years late, cost the local authority 
£84.7M - just £800,000 more than the original price."

And finally this: "Bam Nuttall parent Royal Bam Group said the 
settlement had already been incorporated in its figures for the half 
year to 31 June 2013 and so would have no impact on profit forecast for 
the full year." I take this to mean that Bam Nuttall had anticipated 
this settlement some months ago - in other words, they had effectively 
given up the fight before the summer.

For anyone new to this saga, the NCE story provides a handy summary:

"The busway missed its original opening date in 2009, and the council 
charged Bam Nuttall a daily £14,000 fee for late delivery... After a 
number of attempts, the scheme was finally handed over in May 2011. Bam 
Nuttall then filed its counterclaim, citing mismanagement by the 
council's project manager Atkins as the cause of the delay. The council 
brought in Jackson Civil Engineering to complete additional work on the 
busway before it was finally commissioned in August 2011."

Dispute settled out of court

Cambridgeshire County Council today released a statement that they have settled the dispute with BAM Nuttall, builders of the guided busway, out of court.  The statement can be read here.

The agreement is said to be £76 million in the Council's favour. The Council has paid BAM Nuttall £84.7 million as against the original price of £83.9 million.

This news is also reported by Cambridge News here.

Dispute between Cambridgeshire County Council and BAM Nuttall

Dr Ian Jackson has attempted to discover more details about the dispute between Cambridgeshire County Council and BAM Nuttall, the contractors who built the guided busway, and with whom the Council is in dispute. Dr Jackson invoked his rights under the Freedom of Information Act to obtain this information, but the Council has refused on the grounds of confidentiality and that releasing the information would interfere with the court case. The Council's decision has been upheld by the Information Tribunal.

Full story at Cambridge News.

Busway legal costs

According to the Cambridge News the legal costs of Cambridgeshire County Council's dispute with Busway contractor BAM Nuttall have now reached £4.8 million.

Also in Huntingdon & St Ives News & Crier .

Busway debt

There is a very useful and informative analysis of the busway debt in this week's Huntingdon & St Ives News & Crier (24 January, page 6). It's a letter written by a Fenstanton resident ( Trevor Lee) who attended a public meeting about the finances of the busway construction that was held in Impington on 29 November.

In answer to a question at that meeting he was told that the excess of £64m paid by the Council to BAM Nuttall was due to 'interim payments being made to the contractor based on their costs plus a percentage for overheads and profit that was in accordance with  the form of contract being used'.

Later Mr Lee discovered that the contract used conformed to New Engineering Contract (NEC) Option 'C' which is used when 'the extent of the works cannot be fully defined and anticipated risks are greater'. The contractor submits 'target prices for work based on estimated costs plus a percentage for overheads and profit'. The contractor is paid in instalments, and at the end there is a final adjustment which can go either way depending on how the project costs have worked out in detail.

In the case of the busway, Cambridgeshire County Council believes it is owed £64 by BAM Nuttall, which BAM Nuttall disputes. Interest is now accruing on that £64m.

Mr Lee believes that the risk to council taxpayers would have been less if Cambridgeshire County Council had used a different form of contract, the NEC Option 'A' by which the contractor has to submit firm prices for each stage of the work.  Under this scenario, it is possible that BAM Nuttall might have submitted higher estimates for the work, but the County Council would have known what they were getting for their money, and would not have ended up in this dispute.

Finally Mr Lee suggest that the Council made an 'erroneous decision'  with regard to the style of contract and should be brought to account.

The letter can be viewed by going to the online version of the paper here.

Busway in today's Hunts Post

Today's Hunts Post (2 May) touches on several topics of busway interest. First, on page 5, is an update on the Cambridgeshire County Council v BAM Nuttall court case. While the Council is suing BAM Nuttall for £60m, BAM Nuttall is now making a counter claim of £43m. On page 14 it is reported that the County Council is pressing ahead with creating a new bus stop in Station Road, St Ives, to allow extra busway buses to serve St Ives town. The siting of the bus stop, outside Hyperion auction house, is near a road junction and therefore likely to increase road accidents, according to the County Council's own road safety report. There are four letters from Hunts Post readers (on pages 7 and 32). The topic of all four concerns the proposal to divert the service B away from the north end of Ramsey Road and Hill Rise in order to provide faster journeys to/from Huntingdon. One writer fears he may have to revert to using his car when travelling to/from Huntingdon rail station. Another speaks of Stagecoach's plans as depriving residents of northern St Ives of choice of bus services, and calls for a compromise solution whereby some buses continue to serve Hill Rise. A third letter is about problems the revised service will cause for disabled people who are unable to walk to St Ives town centre if buses are re-routed, and asks Stagecoach to provide an alternative. Finally, Peter Lee of Whippet says his company intends to continue service the Hill Rise route, and would consider increasing the frequency of services if demand justifies it.

Busway court case

The outstanding dispute between Cambridgeshire County Council and the construction company which built the busway, BAM Nuttall, will now go to court in January 2014. This has been decided by a judge at London's Construction and Technology Court, according to a recent report in the Huntingdon & St Ives News & Crier (April 12, page 3).