Cambridge Busway, millions over budget, but procurement was “appropriate for the time”

The Cambridge guided busway is another in a long line of inglorious public sector procurement cock-ups. The innovative plan, to convert old railway lines into a “guided road” purely for buses was started in 2006. Construction was supposed to finish in 2009, but actually ran on until 2011 - two years late on a three-year construction project. And the cost was ultimately £147 million against the budget of £83.9 million.

However, give Cambridgeshire council some credit – after legal argument, the prime contractor, BAM Nuttall, is picking up most of the bill for the cost overrun. However, it is not all good news for the Cambridge taxpayers. Although their payment to Nuttall is just £84.7, less than a million over budget, the delays and legal costs mean this project has cost the council in total around £30 million more than expected. So both sides have lost significant sums of money here.

The council have also commissioned a "lessons learned" report from a very eminent construction and highways engineer, Bill Edwards, a partner of EC Harris. Unfortunately, his report does not answer the one question that we might have expected it to answer - "why did this happen"?

You can get some clues by reading between the lines but really, it is a disappointing report. Perhaps Edwards was briefed that the Council didn't want to get into a blame game, or perhaps it is because litigation between the contractor and the council may not be over. Recent reports suggest there may be some quality problems coming to light now with the work.

But when Edwards says in summary that his overall conclusion “is that the procurement process, the contract conditions and contract administration were appropriate for the time", then the reader might reasonably ask "then why on earth was the cost 80% over budget”?

It is certainly hard to reconcile all of these elements being “appropriate for the time”, with the total failure of the project to run to time and budget. Was it just that Nuttall bid too low / agreed over-ambitious timescales? Was the reality that the work could never be done in that time and to that cost? Or is Edwards saying that everything was OK really, and perhaps we should just expect the construction industry and their (often incompetent) clients to accept this sort of outcome?

I can't believe that he doesn't know what went wrong given his experience and knowledge, so one can only assume he was working to a brief that didn’t want to stir things up. But this looks like a real opportunity missed. You can imagine what a forensic National Audit Office report might have looked like - with a much clearer sense of responsibility for the issues.

As we say, there are some hints. Edwards “got the impression” that the Project Team did not work together; the Steering Group was too far "down it the weeds" and didn't look enough at the big issue of a contract getting into dispute territory. But the criticism, such as it is, is mild and veiled.

Edwards also makes some recommendations for the future, such as

“The contract administration of major schemes should be undertaken by appropriately skilled and experienced staff. This may require engaging staff not currently employed by the procuring authority”.

Well, yes. This and the recommendations are hard to disagree with, but equally they are unlikely to make any public body really sit up and look hard at its own practice. Anyway, here is the Cambridge busway report– see for yourself if you are a fan of guided busways or public sector construction issues.

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