Balfour jv leads in East London deal

Sources claim that thesay that at this stage of the game, a joint venture between Balfour Beatty and Carillion is pulling away from its remaining rival, Laing O’Rourke/Amey/Vinci, as the journey to a £450m rail deal in London approaches its final destination.

The prize is the first phase of Transport for London’s East London Line extension.

An insider said: “The news that Balfour/Carillion seems to be edging ahead may not be a great surprise. Although both contractors work on rail schemes they havehas not always gone smoothly [the most recent example is Carillion getting its knuckles wrapped by Network rail over safety issues]. T they both have a wealth of experience on rail projects and together make a formidable combination that’s not easy to beat.”

He continued: “And whoever wins the phase one job could well be in a strong position to win the second phase,” [also worth about £450m].

A Costain/Skanska/First Engineering/Siemens group was also inititially asked to work up bids, but the pitch foundered after Babcock, First Engineering’s parent company, expressed concerns about what it saw as the risks involved in the deal.

The main infrastructuutre works for phase one are expected to start on site early in the new year, soon after Taylor Woodrow finishes its £40m enabling works contract. The first phase of the extension project has to be completed by June 2010 at the latest, but it is expected the task will be finished well within that deadline.

Phase one will extend the line north to Dalston Junction and south to Crystal Palace and West Croydon.

As well as trackwork and signalling schemes, four new stations will be built –- Dalston Junction, Haggerston, Hoxton and Shoreditch High Street.

Wapping and Rotherhithe stations will be upgraded with additional emergency escape facilities as passenger levels on the new line are expected to rise by 300%.

Phase two of the project involves extending the line west to Clapham Junction and includes a further new station at Surrey Canal Road.

The winner of the phase one contest is not expected to be announced officially until later this month.

[Contract Journal, 11 October 2006, p 2]