Cambridgeshire County Council confirmed it has been deducting almost £14,000 a day in late delivery damages from BAM Nuttall since February 2009.

The dispute is understood to essentially boil down to whether extra works needed on the tram project are variations to the contract or defects.

A council cabinet meeting last week heard senior councillors describe BAM Nuttall’s latest delays as “unnecessary”.

The contractor has told council bosses all their major work is now complete.

But the council claims Nuttall has left the submission of construction and design certificates until the last minute.

Both design and construction certificates are essential for the council to be confident that the scheme has been built correctly.

The Project Manager, who is independent of both the Council and Nuttall, cannot certify the contract as complete until the most important certificates for the main structures have been received and are satisfactory.

Nuttall has been accused by the council of not yet submitting five construction and design certificates. A further 47 construction certificates, that had been previously been rejected also need to be resubmitted, and accepted, before the contract can be certified as complete.

Once Nuttall complete the Busway contract they will have 28 days to fix all notified defects on the route.

The council is lining up a new contractor to fix the defects if Nuttall misses the deadline. The costs of the work will be deducted from Nuttall.

Roy Pegram, Cabinet member for Growth, Infrastructure and Strategic Planning, said: “The Busway is not any longer, any wider or any higher than when the contract was awarded so it is clearly unacceptable that BAM Nuttall have taken two years longer than they should to build the route.

“Residents and everyone at the council would have rightly expected to see buses running a long while ago, but the contractor’s delays have directly resulted in £10m in damages being stripped from the firm.

“Although the timescale for BAM Nuttall completing the contract is in their hands, I would like to reassure people that the Council has plans in place to get the route open as soon as possible once they finally achieve that. Clearly correcting the defective work is part of this process, which will take a number of weeks.”

Council claim problems with the contract include:

Maintenance track – some areas of the track have been built at too low level which means rain water has collected and the maintenance track is flooded. These areas of the track need to be raised without affecting the flood balance in the area.

Beam expansion gaps – The County Council requires the contractor to show that the gaps between the beams will allow for expansion of the beams during periods of hot weather while giving a smooth ride for passengers.

Foundations – The County Council requires the contractor to show that the use of shallow pad foundations on some short sections of track where deeper piled foundations were originally planned is appropriate. The County Council need calculations to show the track will not move over time reducing the ride quality.

St Ives Park & Ride car park – the car park has been built with less than the specified gradient and water is ponding on the surface of the car park.

River Great Ouse Viaduct – rain water is leaking through an unsealed expansion joint onto the steel below. If this was not fixed now council taxpayers would pick up future bills for additional maintenance costs.