Super sewer contingency budget raided due to cost pressure

Aaron Morby 5 years ago

Thames Tideway is rolling out a cost-saving plan after having to raid much of the project contingency budget even before tunnelling has started.

First of eight TBM's started central section drive last week amid concern about soaring costs in preparation works
First of eight TBM's started central section drive last week amid concern about soaring costs in preparation works

A catalogue of engineering challenges during cofferdam and shaft construction has left the project team looking for major cost-savings.

The project’s holding company, Bazalgette Holdings Group, confirmed the total project spend so far has reached £1.48bn amid unforeseen cost pressures early on in the project.

Now contractors are being pressed to find savings and raise productivity as a value engineering exercise is undertaken and overheads are cut.

The 25km tunnel is due to be completed by 2023 at a cost £4.2bn and Tideway said it was confident the project would be completed on time and to budget.

Cost pressures were revealed as former Crossrail finance boss Mathew Duncan joined the project last week as new finance director replacing Mark Corben, whose intention to stand down was announced last year.

Key sites facing engineering challenges are at Blackfriars, where two large Victorian gas mains have caused problems, cofferdam construction at King Edward Memorial Park and Albert Embankment and shafts at east area sites.

In a statement just after the first tunnelling started last week, the firm said: “Following significant progress on the project and now having mobilised on 20 of our 21 sites, Tideway has identified several cost pressures in the programme.

“Taken together with general cost pressure across the programme this has substantially eroded available contingency.

“To mitigate the cost pressures Tideway has begun to implement cost-saving measures in partnership with our contractors and remains focussed on achieving the baseline target.

“These cost-saving measures include working with our contractors to eliminate overlap, taking measures to increase productivity, undertaking value engineering and delivering overhead savings.

“It is too early to conclude the extent to which these measures will mitigate the cost pressures, and an update will be provided on these and the cost savings programme in Tideway’s annual report and accounts next March.”

A spokeswoman for Tideway added: “There have been a number of complex engineering challenges and risks to overcome in the early stages of the project.

“With these behind us and having put in place several measures to reduce cost, our budget is intact. Tunnelling for the project started last week from our site in Battersea and we are set to complete the project on schedule and to budget.”

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