TfL slammed for £900m Tube upgrade cost overrun

Aaron Morby 4 months ago
Share

The London Assembly has blamed Transport for London for gross mismanagement of a signalling contract with Bombardier setting the Tube modernisation programme back five years.

Old London Underground signalling box

An investigation into the failed signalling contract said a catalogue of management failings and errors left the District, Circle, Metropolitan, Hammersmith & City line upgrade nearly £900m over budget.

TfL ultimately paid £85m to cancel the contract with Bombardier Transport in 2013, two years after appointment. The report estimates that £67m of the settlement was wasted expenditure.

A culmination of nearly three years’ work scrutinising TfL’s sub-surface upgrade programme, the budget and performance committee report highlights how poor commercial expertise and a lack of IT procurement skills left TfL ill-prepared to appoint a suitable contractor, and vulnerable enough to be duped into a contract which Bombardier was never able to deliver.

The critical report highlights a culture where TfL management was only interested in presenting good news and was in denial about the progress and effectiveness of the programme, allowing it to continue for much longer than it should have.

The committee concluded that neither TfL nor Bombardier’s management teams were up to the task of managing the programme.

John Biggs AM, Chairman of the Budget and Performance Committee, said: “What is most remarkable about this affair is that no-one in TfL has been held to account, and the Mayor, who chairs its board, serenely and indifferently acts as if a £900m increase to the budget isn’t an issue.

“In government, heads – political or official – would roll after such financial mismanagement.  At TfL the key players have been promoted and nobody was to blame. It is a scandal.”

Transport for London’s Signal Failure report

KPMG audit – Lessons learned

TfL’s procurement process was not well thought out. Most significantly, its scoring system for evaluating bids was flawed. This meant that by significantly underbidding its competition on price, Bombardier was almost certain to be taken forward, regardless of how it scored in the technical areas of the evaluation.

Furthermore, TfL seemed to change its procurement process as it went along. If TfL had followed the process as outlined in the tender notice, then neither Bombardier nor the firm that finished second would have made the cut. By the time the field had been narrowed to two bidders, Bombardier was offering a lot more and for a lot less. If Bombardier could deliver what it was offering, then the case for appointing Bombardier was compelling.

Unfortunately, as KPMG noted “the capability of the supplier to deliver these benefits had not been adequately demonstrated or interrogated”. TfL has openly admitted it agreed a “bad contract”. The payment and penalty regimes within the contract were aligned to spend, rather than progress. This meant that in ending the contract, TfL was required to pay Bombardier a sum based on how much it had spent on the programme and not on the value of the work it had produced.

Latest news

Manchester’s tallest skyscraper plan approved

Construction work on major private rented scheme set to start this Autumn
1 hour ago

Opinion: Contractors need assurances over EU workers

Construction needs to know it will have the workforce to keep Britain building
33 mins ago

McLaren sets sights on sub £10m contracts

Contractor sets up new division to target industrial and retail jobs below £10m
11 mins ago

Four chase £96m Lincoln Eastern Bypass

Work is scheduled to start later this year on 24-month job
44 mins ago

Ministers reassure house builders over million homes target

Builders report strong sales continuing despite Brexit
12 hours ago

Heathrow third runway decision on hold

Decision will not be taken until October at the very earliest
20 hours ago

Tarmac to buy 10 Hope Construction concrete plants

Breedon Aggregates merger with Hope now set for August
1 min ago

Green light for Ferrybridge £360m power plant

Three-year construction programme to start this autumn creating 500 jobs
24 hours ago

Infrastructure cash key to avoiding Brexit hiatus

Civil engineers urge Government to hold nerve on infrastructure and avoid stop-start construction
1 day ago

MPs slam smart motorway plans to lose hard shoulders

Transport committee calls for rethink on £6bn "All lane running" plans
24 hours ago

Morgan Sindall bags £39.5m Bournemouth Uni project

Contractor set for University’s Faculty of Health and Social Sciences building project
2 days ago

August start date for Tyneside triple decker roundabout

John Sisk and Lagan Construction JV will deliver innovative A19/A1058 junction upgrade
2 days ago

Mott to build case for Solihull transport hub

Plan for new transport hub to connect Birmingham International with HS2 station
24 hours ago

WSP concedes defeat in bid battle for Sweett

Currie & Brown prepares to deliver cost cutting plan at Sweett
24 hours ago

Costain boasts record order book at half-year

Tendering levels remain high across main infrastructure markets
1 day ago

Plans lodged for Redrow/Wates Bicester garden town

Developers aims to build 1,500 homes in next 15 years
2 days ago

Green light for Laing O’Rourke Liverpool cancer hospital

Work to start in next few months on new Clatterbridge Cancer Centre
2 days ago

WSP hires Atkins director for Stockport bypass

Feasibility study for the A6-M60 relief road will be led by Nasar Malik
2 days ago

Construction alliance formed for light rail work

Places for Colas, Barhale, Thomas Vale and Auctus as Balfour Beatty misses out
2 days ago

Watkin Jones £100m east London student tower approved

Work to start on Stratford tower at the end of the year despite Brexit vote
2 days ago

Kier wants suppliers for £50m of work near Hereford

Meet the Buyer event this Thursday: Register now
2 days ago

G F Tomlinson scoops £15.9m Nottingham Uni job

Advanced manufacturing building will be constructed at the University's Jubilee Campus
3 days ago

Kier wins bid race for £25m Mackintosh restoration

Kier beats rivals with "extremely competitive" bid for fire-damaged building
3 days ago

Balfour Beatty chief’s wife buys £200,000 company shares

Quinn holding in construction group rises to 0.07%
3 days ago

Willmott Dixon abandons sale of support services arm

Contractor decides to keep division after bidders wanted to break-up maintenance operation
4 days ago

Firm fined £550,000 after two men fall to their deaths

Couple fell through Euston roadside hoarding into building site basement
3 days ago

Redrow reports buyers unbowed by Brexit

House builder expects strong year-end profits after completions rise 17% to nearly 5,000
3 days ago

HS2 phase one opening could be delayed a year

Spending watchdog warns HS2 timetable unrealistic despite good progress on procurement
3 days ago

Murphy finance chief becomes new Barhale CEO

Matthew Behan to lead contractor as new corporate structure established to broaden portfolio
4 days ago

£10,000 prize to cut roadwork disruption and delays

Amey and Staffordshire council seek smart digital solutions to roadwork traffic delays
3 days ago