The Minister for Transport, Mr Brennan, has told the Rail Procurement Agency (RPA) not to give “a penny more” to the contractors of the Luas light rail project, who are seeking up to EUR50 million extra to complete the two tram lines by next summer.
It has emerged that the Luas will now cost EUR765 million, with the contractors claiming an additional EUR50 million in order to complete the Sandyford and Tallaght lines by June and August 2004.
In its latest report to the Minister the Railway Procurement Agency has said it anticipates the entire “contingency” provision for Luas of EUR 90 million will be used up, on top of the budgeted cost of EUR 675 million, and it was still arguing with the contractors.
Mr Brennan told The Irish Times last night that he had made it clear
to the RPA that the contractors were not to get a penny more than EUR 675 million, plus EUR 90 million.
"And the timescale is not to go a day beyond June or a day beyond
August." he said.
The rising cost of the Luas would make it the most expensive piece of infrastructure in the history of the State, outstripping the EUR 625 million Dublin Port Tunnel and the EUR 680 million M3 motorway from Clonee to Kells, Co Meath, which was approved last week by An Bord Pleanála.
In 1996, the Government said the Luas would be built for EUR 279 million and would be operational by 2001. Two years ago the cost had more than doubled to EUR 635 million and the start date had been put back to 2003.
Mr Brennan said he had asked the RPA to engage in "hard talking"
with the contractor, AMB JV, in order to contain the escalating cost
and deliver the project on time.
"It's quite a battle," Mr Brennan said. "I understand there is a lot of
discussion, angst and pressure on the builders to have [the] Sandyford
[line] ready in June and [the] Tallaght [line] in August, but they're demanding to get paid for variations. The RPA is resisting this because there's EUR 50 million at stake", he said.
The Minister said the RPA was now "getting a bit jittery about both
the money and the time". "So I told them last week that I want them to
get down to hard talking with the builders to settle those issues as
quickly as possible."
Yesterday, the chairman of the Oireachtas Committee on Transport,
Mr Eoin Ryan, laid the blame for increasing costs and delays for
Luas squarely on the shoulders of the RPA.
“There is no evidence of a hands-on approach, no appreciation of the effect its construction is having on the city,” he declared
The agency's chief executive, Mr Frank Allen, said it was "endeavouring
to receive credible assurances regarding schedules to completion", although it believed AMB JV had the experience and skills necessary
to complete the project.
In a letter on August 26th to Mr Ryan he said: "We believe that this
is achievable within the timeframe . . . but it will require maximum commitment and application of resources".
Mr Allen said the RPA was directing all of its efforts to require AMB JV to apply those resources, as deadlines had been missed for stages of the work.
“This does give us cause for concern about the reliability of the contractor’s completion dates.”
He also noted in the letter that major infrastructure projects "sometimes collapse into mutual recrimination between client and
contractor, with the merits of the arguments being resolved by an
arbitrator several years hence".
The Green Party's transport spokesman, Mr Eamon Ryan TD,
said yesterday that he found this "quite ominous because it raises the
nightmare scenario of litigation in the courts that could go on for
years", even holding up completion of the project.
In a statement last night the RPA rejected Mr Eoin Ryan's claim and
reaffirmed its objective to have the Luas system operational next
summer.
"This requires striking a balance between penalising contractors for
underperformance and working with them to get the work complete,"
it said.
