Contractors in battle for A40 compensation

The Federation of Civil Engineering Contractors is pressing the Government for compensation to cover costs incurred by contractors bidding for the two A40 contracts in West London.

The œ56 million Gypsy Corner and œ53 million Western Circus Junction improvement schemes were abruptly withdrawn by the Highways Agency two weeks ago, just a few days before bids were due to be returned (CJ 15 August).

The Federation's chairman, Howard Stevens, has written to Transport Secretary Sir George Young describing the withdrawal of the schemes as "a cruel blow to the civil engineering sector."

Stevens pointed out that the six contractors had incurred higher costs than normal, amounting to more than œ3 million, as design and build tenders were more expensive.

In addition, the Agency's payment profiling meant contractors had to arrange expensive bridging finance arrangements.

The Highways Agency de-scribes the situation as "a normal business risk which the industry must bear." But the FCEC says that the withdrawal of the A40 schemes is "wholly inconsistent with the Government's declaration that it will act as a best-practice client."