Council secures £33m payout from contractor as busway dispute settles

A contractor has agreed to pay a county council £33m as part of the settlement of a long-running dispute over the construction of a guided busway.

BAM Nuttall handed over the busway project to Cambridgeshire County Council more than two years late, claiming that it had cost £152.5m to build.

It argued that the council should pay an extra £43m in addition to the £117.7m it had already paid.

In addition to receiving £33m from the contractor, the local authority will retain various monies it withheld under the terms of the contract.

Cambridgeshire said the settlement meant it will have paid BAM Nuttall £84.7m in total, only £800,000 more than the original price for the busway’s construction.

The decision to accept the contractor’s offer was backed by all political groupings on the council.

Cambridgeshire had earmarked around £126m for the whole scheme, which included construction and other costs such as land acquisitions.

The Government provided £92.5m, while a further £26m came through s. 106 monies and the remainder through transport grants and other income.

Cambridgeshire said: “Due to the legal process and the time taken to reach a settlement with BAM Nuttall, the cost of the scheme has risen – mainly due to the level of legal fees the council has had to incur in order to fight the case.”

The council said the total cost as a result was £152m. It has paid for £17.8m of the £26m gap. The final £8m will be paid over a 25 year period through the authority’s capital budget.

Cambridgeshire’s Cabinet is to order a review to see the lessons to be learned.

Cllr Martin Curtis, Cambridgeshire’s Leader, said: “I am pleased that this settlement has been agreed and that we can move on from what has been a difficult and time consuming dispute for us.

“It is clear that the council was right to take the bold decision to provide better transport options for residents in one of the fastest growing parts of the country; and right that we signed a robust contract with BAM Nuttall.”

Cllr Curtis added: “We have always been very sure of our case and would have been willing to go to court to fight that case. However, following discussions with all group leaders, we felt that we would rather have certainty and settle the matter than risk mounting legal costs. It is clear from the analysis of our professional and legal teams that, were it not for the strong contract we had in place, BAM would never have settled. We are, therefore, now going to review and learn from our experience to see how we can help to stop this happening locally and nationally in the future.”