THE cost of the Borders Railway is expected to rise by another £50 million this week when a key contract is signed to begin its long-awaited construction.
Sources close to the project said it is now anticipated that the line will cost £350m, despite ministers’ insistence that it must be completed within its £235m-£295m budget at 2012 prices.
They also believe the route between Edinburgh and Tweedbank, south of Galashiels, will not be re-opened until late 2015 – a year later than planned.
The latest setbacks to the ill-fated scheme come as the Scottish Government’s Transport Scotland agency, which is in charge of the 30-mile project, said a contract would be signed with Network Rail to build the line by Wednesday.
The move comes more than a year after ministers scrapped their original plans for a private sector consortium to fund, construct and maintain the railway, when two of the three short-listed bidders pulled out.
The main construction work, which was originally expected to account for £230m of the total project cost, should have started in autumn 2011.
A total of £54m has been spent on other work – nearly half on land purchase – with £10m on advanced construction and site investigations.
Network Rail will now appoint a contractor for the construction work, but no start date has been announced. It could be awarded to Dutch firm BAM Nuttall, which was the last remaining bidder in the original competition, and which is now doing design work on the project for Network Rail.
One source told Scotland on Sunday: “The general view in the industry is that both the programme and cost were very ambitious, and will have changed significantly.
“Increases in inflation and the cost of materials could well mean the total increasing to around £350m.”
David Parker, leader of Scottish Borders Council, which originally spearheaded the scheme, said any cost increase would be worth it. He said: “I am not too concerned if it exceeds its budget if we get the line we want.”
He added that the completion date was always expected to slip.
He said: “There was an acceptance [by project officials] that it might drift a bit. By sticking publicly to the 2014 date, they were trying to drive the best deal with Network Rail, probably knowing it would be 2015, but at least it wouldn’t be 2016 or 2017.”
Alan Watt, chief executive of the Civil Engineering Contractors Association Scotland, said: “I do not think some increase in cost and a longer timescale are unreasonable given that the quoted prices are now over four years old and the scope of the project has been further developed.”
A Transport Scotland spokesman said: “In response to the delivery date of the Borders project, we are finalising the commercial terms of the contract with Network Rail for handover to them of the scheme delivery, and expect to conclude those discussions later this month.”
A Network Rail spokesman said: “We are finalising the transfer of the project from Transport Scotland to Network Rail and expect to complete that process shortly.”