ANALYSIS

Midlands and the North: Birmingham breakthrough

Birmingham is a 90-minute train journey from central London, with New Street Station playing a fundamental role within the country's rail infrastructure. It is a national rail hub that provides 80% of the daily total services to Birmingham, including long distance trains from London to the north and services from the south and south west to Scotland, Newcastle, Manchester and Liverpool. Recently, there has been great interest generated by the proposed £600m redevelopment of New Street Station, which currently serves around 120,000 passengers daily (that's more people than travel through Gatwick aAirport each day). That figure is set to increase by 150% over the next 20 years. It is anticipated that, once complete, the redevelopment of this national rail hub will accommodate passenger growth to at least 2046. The Birmingham city centre masterplanThe New Street project is being developed and funded by Network Rail, Advantage West Midlands, Birmingham City Council and Centro-WMPTA. It aims to transform the current 1960s built station into a bright, modern transport hub for the entire region, using locally sourced, sustainable materials. Green travel plans and recycling schemes will also be promoted.Along with providing passengers with better access to the station, the ambitious scheme will regenerate large parts of Birmingham city centre, hopefully boosting its image as well as creating more business opportunities and thousands of jobs. The overall benefits of the project have been estimated to be worth more than £1.7bn. The refurbishment of London railway stations such as St Pancras and Paddington has seen the retention of the original Victorian structures. This will not be the case with New Street as the original station, built in 1854, was demolished and re-built in 1967. Much of the existing superstructure remains in place but the extensive building work will see the creation of a modern building which is four and a half times bigger than the existing structure, and which Mr Martin Chambers, programme director at Network Rail, referred to as a new "cathedral-like concourse". The development is scheduled to be completed by 2013. What defines the roadmap for a project of this scale?When procuring such a flagship development the choice of contract is key. The contracts preferred by Network Rail are based on the Institution of Civil Engineers (ICE) Conditions of Contract Seventh Edition, 1999. As is the usual custom, Network Rail will be adding its own bespoke amendments to the contracts works packages, all of which will be based on this standard form. The ICE Conditions were first published in 1945 and have seen extensive use since this time. When interpreting the contract, lawyers are assisted by a body of case law. The editions that have followed at regular intervals since 1945 have allowed the drafters to introduce changes highlighted by the decisions of the courts, as well as addressing criticisms of its operating provisions. Thus it is a contract that has been well tried and tested. This is in contrast with the New Engineering family of contracts, which have existed only since 1993. The latest edition, known as NEC3, was published in June 2005.The NEC3 contract is stated to be a partnering contract. It calls for proactive management, the early identification and valuation of additional items - so often a cause of disputes - and an assessment of their projected effects on the overall dates for the completion and evaluation by the project manager. These are referred to as "compensation events". There are obligations on all parties to give early warning of such occurrences in the hope that the effects can thereby be managed and mitigated - the ultimate aim being the avoidance of disputes. The NEC3 contract is noted for its brevity and use of plain English. Its authors would point to its ever-increasing use and popularity as being clear evidence of its success. They would also draw attention to the fact that so far the NEC3 contract has not featured in any reported decisions of the courts. It has been chosen by the Olympic Delivery Authority as its preferred means of procurement for the 2012 Olympic projects. However, the contract does have its critics, especially when contentious issues arise and the interpretation of its wording has to be analysed. It can often can be considered as a roadmap for the project, which works as long as the parties are all pulling together. But if the relationship breaks down, which can be the case despite the partnering ethos, the answers to the problem are not always to be found within the contract's wording. Lawyers say that judicial guidance relating to some of the more contentious aspects of the NEC3 contract would provide much assistance. Supporters of the ICE contracts would add that the requirement for proactive management is not unique to NEC3. The ICE contract encourages early evaluation of claims by the engineer. There are inherent provisions to be found within the contract which seek the early resolution of any contentious issues.Can any lessons be drawn from history? Birmingham has always been a communications hub. Even prior to the arrival of the railway, Birmingham was linked by an extensive canal network - it proudly boasts that it has more canals than Venice. The construction of the canal network in the 18th century gave rise to massive feats of civil engineering in an age when all of the cutting and filling had to be done by hand with the assistance of horse-drawn transport only. There were massive profits to be derived from the industrial revolution and no doubt there were pressures to complete on time and within budget. When New Street has been completed, and has been in operation for a few years, the public should be impressed by the appearance of the structure and its functionality. It is hoped that it will draw favourable comparison with other flagship projects, both new and old. However, during the interim construction process all parties will wish to avoid any unwelcome headlines based on delays and cost overruns. It is for this reason that the choice of the correct contract, together with good project management, will be perceived as the key to success. Jeff Brown is head of construction at Hammonds in Birmingham.

September 10, 2008 at 10:30 PM

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