Bechtel and CH2M Hill face fee cuts in Crossrail overhaul

Crossrail is to shake up its delivery team as it scrambles to cut £1.4bn from its costs, Building can reveal.

The move will see a review of the three-tier system set up two years ago, in which the client sits above a programme partner team led by US consultant CH2M Hill (Transcend), which in turndirects the delivery partner team led by Bechtel.

The review follows the departure of Crossrail’s implementation director in the past few weeks. David Bennett, who was appointed to the role in July last year, will not be replaced while the review of structures is happening. His work will be covered by programme director Andy Mitchell and technical director Chris Sexton.

A source close to the £14.5bn project, which had its budget reduced by £1.4bn in last week’s spending review, said some of the savings were likely to come from reducing the roles of the Bechtel and CH2M Hill consortiums.

The source said administration costs were estimated at more than £1bn over the life of the scheme and the review was looking to cut these by a quarter.

He said this was likely to mean that more people were taken in-house by Crossrail.

“The client is looking at setting up a new delivery structure. There is a lot of duplication currently, and it’s looking at winding some of the programme manager and project partner roles into the client,.” he said.

“The sense was Crossrail needed to get more direct accountability, rather than going through tiers of management.”

Crossrail directly employs about 300 staff, but could take on commercial, specification and business case roles.

The value of the Bechtel and Transcend contracts are thought to be £400m and £100m respectively, but the source said their fees would fall. It is possible to amend the arrangements as Transcend and Bechtel were taken on using yearly rolling contracts.

Crossrail will also save money by rescheduling construction of the scheme, pushing the finish date on by more than a year to at least 2018. It will now dig the tunnels before building the stations, allowing for a much cheaper form of construction, with spoil removed via the tunnels. This is likely to move the station timetable back.

A Crossrail spokesperson said: “Crossrail is undertaking a review of its operating model to ensure it is in the best place to deliver Crossrail safely at the lowest possible cost. This review will be finalised shortly now that the Comprehensive Spending Review has concluded.

“While Crossrail is undertaking a review of its operating model, David Bennett’s role will not be directly replaced.”