M60: 18-months late

Exclusive by John Leitch



The Amec/Alfred McAlpine joint venture working on a £100 million contract for the final link of the M60 Manchester Outer Ring is reported to be seeking a six-month extension that will delay final completion to 2001 - 18 months later than originally scheduled.

Site sources also say Contract One is currently £40 million over budget after the joint venture had previously been granted a 12- month extension of time because of an unavailability of suitable material for a reservoir wall.

Miller/Kier's £49 million award, Contract Two, is said to have been hit by "big claims". A spokesman for Miller denied rumours that as negotiations had proved unsuccessful, Miller was about to seek arbitration. "We got substantial completion on 12 December 1997 and are now into the maintenance period," said a Miller spokesman. "I hope to see a progression of the final account in the next few months."

However, insiders put the difference between Miller/Kier and the client, the Highways Agency, at £20 million. "There are several large claims still being negotiated over," said one. Another commented: "Miller is not a stroppy go-getting contractor, but it has raised the possibility of arbitration."

Miller/Kier had an enabling contract involving the redirecting of services including both foul and clean water. Electrical junctions had to be rejigged. Liquidated damages imposed on the contractors, who finished the work in April this year, six months late, are said to run to some £1 million.

Contract Three, a £18.9 million project awarded to Costain, is complete and the final account is agreed. This week both Costain and the HA were tight-lipped over the size of the cost overrun.

The last of the four contracts was awarded in May this year, to be built by Balfour Beatty by June 2000. A change in policy at the HA has led to Contract Four being offered on a design and build basis. The winning price of £50 million raised eyebrows as the official estimate was £75-100 million.

Steve Edwards, Highways Agency project manager, said this week: "We awarded it to Balfour at that price because it was good value for money. Under the terms of the contract the contractor assumes the vast majority of the risk. I expect it to be built for that price."

Asked if the cost overrun of the Amec/Alfred McAlpine contract was £40 million, Edwards said: "£40 million is closer to the overrun for all the contracts, the total figure." As CJ went to press, no one at Amec was available for comment. Edwards said progress was being made on the Miller/Kier payment. "It has not been resolved but it is resolvable. The account is progressing well."