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18
Aug
Exclusive: Kex Gill contractor makes £23 million compensation claims against council
A contractor has submitted £23 million worth of compensation claims against North Yorkshire Council over the A59 road realignment at Kex Gill.
The council has embarked on its biggest ever capital investment programme on the landslip-prone, key east-west route linking Harrogate and Skipton.
But it revealed in May the cost had increased by £13.7 million from £68.8 million to £82.5 million.
The council increased the budget partly to cover compensation claims made against the authority.
In a report due before this week’s executive, council officers said the contractor, John Sisk & Son, had made claims — which are referred to as compensation events — over “design difficulties” and “complex ground conditions”.
It added that the council has already disputed a “significant portion” of the claims, but warned that the situation over the project was “subject to potentially significant change”.
The report said:
A significant proportion of these [claims] are disputed by North Yorkshire Council and are being challenged. At present the total revised budget is forecast to be sufficient, but the situation is still subject to potentially significant change.
Karl Battersby, corporate director for environment at North Yorkshire Council.
The Stray Ferret asked the council what specifically the claims entailed and whether it was concerned that it would need to find additional funding if the claims were successful.
Karl Battersby, corporate director for environment at the council, said one of the claims — which is subject to a £3.125 million challenge from the contractor — relates to a delay in awarding the contract for the scheme.
Mr Battersby said:
The A59 Kex Gill scheme is a complex major highways project being delivered by the contractor, John Sisk & Son, and we continue to see very good progress.
As with any large construction project, there can be unforeseen issues and as per our contract, we deal with these by way of compensation events.
In May, our executive approved additional funding for current and potential future compensation events, which we announced in a press release.
They are linked to reasons such as an initial delay in the awarding of the contract due to the receipt of government grant funding, design changes, unforeseen ground conditions and changing from a piling to an earthworks solution.
We continue to assess and challenge all compensation events. In the case of CE01, this relates to the delay in the awarding of the contract.
The increase in costs from the scheme will fall on local council taxpayers because of the terms of the contract.
Under the deal, the Department for Transport awarded a fixed sum of £56.1 million and the council contributed £12.7 million.
But the contract stipulated the council was responsible for any price rise, which meant it had to stump up the £13.7 million increase — taking the total paid by local council taxpayers to £26.4 million.
However, the council has warned that the cost of the project could increase further — which the taxpayer would ultimately foot the bill for.
Cllr Malcolm Taylor, the council's executive member for highways, revealed in a report ahead of a full council meeting in July that the new road was on track to open in June next year.
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