ground - dfbo

One of the biggest risks will be unforeseen ground conditions, which as many Public Accounts Committee reports have critically reported, regularly increase the initial tender cost by 20%-25%. This is an unattractive price variable for any interested contractor to set before a prospective banking partner.

There are a number of suggested ways round this obstacle. The first - of passing the risk back to Government - is inconsistent with the whole of Government policy. Instead, Government could perhaps invite the insurance industry to price the potential risk and make it compulsory for insurers to take out their own insurance. With time, a track record on DBFO schemes would be established that would refine risk definition and reduce premiums. Even this, though, is probably more involvement than the Government wants.

Therefore, tenderers may be encouraged to commission a common groundwork investigation study, which would be available to all.