£3m Luton Busway bill

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There has been a £3m investment shortfall for the construction of the Luton-Dunstable Busway, the Luton News revealed.

In the original business case for the £89.2m busway, a signed agreement was included from the owners of Napier Park, Luton, who agreed to invest £3m.

But a report issued by Luton Borough Council indicates that the investment has fallen through.

It states: “The Full Approval Business Case (FABC) included a £3m contribution from a future development site as part of this local contribution, but given the current financial environment this cannot be assumed to be guaranteed funding.

“The loss of the £3m contribution means that each council will need to pay at least £1.5m more each than was estimated in the FABC.”

The £3m commitment from Southside & City Developments Ltd was more than a third of Luton Borough Council’s and Central Beds Council’s ‘local contribution,’ which was added to £80.3m in government funding to get the project off the ground.

The report issued by LBC Transport Manager Keith Dove indicates that not only has £3m in contributions been lost, but a potential legal battle over the cost of the busway is looming. Both councils claim that they are still owed repayments by the construction company, which is holding firm.

The report states: “Unless a satisfactory agreement (supported with evidence) can be reached with BAM Nuttall it is probable that a process of adjudication will follow to seek to recover further costs.”

The dispute first kicked off in 2013, when BAM Nuttall indicated that it could submit supplementary claims for costs. LBC and CBC rejected this and the case went into mediation.

According to Keith Dove’s report this ‘was successful in terms of ensuring the successful opening of the Busway and also allowing a better understanding of BAMN’s position and arguments on various claims.’

However there was no financial closure and the mediation process was stopped in March 2014.