£8.4m costs are still on track for Ebbw rail line

Mar 10 2008 by Martin Shipton, Western Mail

THE fact the recently reopened Ebbw Valley rail line came in more than £8.4m over the contract price is a matter of no concern, according to the council which managed the project.

Last week it emerged that the line, which has re-established a train link between Cardiff and Ebbw Vale after more than 30 years, was costing more than £33m instead of the £25m originally tendered.

The Western Mail asked Blaenau Gwent Council why the contractors had been paid additional money as “compensation events”, even though the line opened months after expected.

A council spokesman said, “Due to the nature of the majority of civil engineering works, it is generally not possible to predict with accuracy the total amount of work to be undertaken in the design stage prior to actual construction on site. Hence the additional works that have been identified on the Ebbw Valley Railway contracts should not be viewed as out of the ordinary.

“It is commonplace for civil engineering projects to increase in cost and time, which is why the great majority of the forms of contract used in the industry make provision for additional money to be paid to the contractor and for him to be granted additional time to do the work.

“In design and build contracts, when designs are taken forward, issues become apparent that could not be identified at the tender stage. These are compensation events under the terms of the contracts and further issues may became apparent when the construction work is underway.

“It must be noted that the gap between the new contract totals and the overall estimated project cost is not cost overruns…”