Tram bosses seal deal with contractor after secret talks

Published on Friday 21 January 2011 15:24

TRAM bosses have reached an agreement with one of their contractors after secret mediation talks were held between the two parties.

Construction firm Carillion had been seeking extra money after moving thousands of metres of underground utility cables.

The Wolverhampton-based firm diverted more than 40,000 metres of pipes and ducts when it was originally due to be paid 40 million to move just 27,000m.

It has now emerged that tram firm TIE held mediation talks with Carillion late last year, with sources close to the project suggesting the contractor was looking for an extra 10-13m.

The talks have now been concluded, but neither side has revealed details of the payout.

Carillion ended its association with the tram project late in 2009 when tram bosses said around 80 per cent of the utility work had been completed.

Northern Irish firm Farrans and Middlesex-based Clancy Docwra were then drafted in to complete outstanding work at Haymarket, Picardy Place, the airport and Ocean Terminal.

According to TIE, 50,000m of utilities have now been diverted - 97 per cent of the total - with the remainder being "local connections and minor cabling works", which will be finished off at the conclusion of the project.

John Carson, a former director of maintenance at Network Rail and a long-standing critic of the trams, said: "If the quantity of work doubled, then the value of the (40m] contract should double as well and that doesn't factor in money paid to Farrans and Clancy Docwra.

"I expect the cost of the utility work to be 100m by the time they're finished. The contract was based on a schedule of rates, not on a fixed price."

It was the lengthy delays to the utility diversion work which initially led to the contract dispute with Bilfinger Berger.

It is understood that the contract drawn up between TIE and the construction consortium promised Bilfinger would have "exclusive licence", meaning the streets would be clear of other works.

Mediation talks between Bilfinger Berger and TIE are expected to start in March, with an unnamed American mediator as the broker.

Commenting on the talks with Carillion, a spokeswoman for the tram project said details of the settlement would be reported to the city council.

She said: "We have reached an amicable settlement with Carillion, the outcome of which will be reported in due course."

According to the council, the amount of utilities work carried out has led to a "significant" improvement in the quality of the city's infrastructure and should help provide faster broadband internet.

It is also hoped that utility companies will contribute "several million pounds" to the cost of the work, the council said.

Carillion declined to comment.