Strain

There’s always the potential for strained relationships where there’s a contract between two organisations in place. One, for example, might have higher expectations than the other.

One of 10 once brand-new, environmentally-friendlier Scania double decks for Stagecoach, purchased specifically for guided busway services (though not the entire busway is guided)

With small contracts, the potential for problems can be tiny. And problems there certainly are for the Cambridgeshire guided busway. Six fairly big ones. Contracts don’t get much bigger than this, at £115mil plus contractor over-run payments believed to be £14,000 per day. Indeed, had it still been on the drawing board, my guess is that the new government would consider it very seriously for the chop. As it is, the thing’s almost complete. And that’s the key work: “almost”.

The original spring 2009 opening was put back to the summer. Then the winter. Then summer 2010, next month in fact. Then mid-December 2010. Now, England and the world’s longest busway probably won’t be open at all in 2010, thanks to the six sticking points—owing to flooding, subsidence and heave. Indeed, it looks increasingly likely that Cambridgeshire will need to complete the snags itself, charging contractor BAM Nuttall accordingly. Another source of conflict.

This is rather a blow for Stagecoach and Whippet who, between them, have invested more than £4mil. But there’s a bigger blow. The planned busway trackside new town of Northstowe is now less likely to go ahead. The operators’ business plans had assumed it would and they had based their revenue assumptions upon it, well into the future of the five-year deal. Cambridgeshire and the operators were planing on doing exactly the right thing: introducing quality services ahead of a major development. A lack of new housing now threatens to water down operators’ frequency and both are considering what negative changes they will need to make to ensure profitability.

Operators have a five-year deal with Cambridgeshire for exclusive use of the busway. This will start when it opens. Operators are, however, able to renegotiate if the bus way hasn’t opened by January 2011. And the chances of that are? Slim.

Stagecoach as already tried to distance itself—and its specifically purchased buses—from the contract fiasco.