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Top Scots rail project faces funding buffers

News Value-for-money question leaves four bidders waiting on £30m extension scheme

THE BIDS of four contractors hoping to win one of Scotland's largest rail projects are in the balance following a funding row.

Balfour Beatty, Carillion, Sir Robert McAlpine and Kvaerner, which has linked up with First Engineering to bid for the 5 km Hamilton-Larkhall extension, were chosen by client Railtrack from a list of eight in February.

All submitted bids at the beginning of July.

Each has spent an estimated £250,000 working up bids for the Public Private Partnership scheme, set to cost more than £30 million.

But the Scottish Executive (formerly the Scottish of fice), which had pledged £5 million towards the link, has delayed giving the go-ahead because it wants assurances from the Strathclyde Passenger Transport Authority (SPTA) that the scheme will provide value for money.

if those assurances are not given, the project could be axed unless alternative funding methods are found.

The final decision rests with Scotland's First Minister, Donald Dewar. A Scottish Executive spokeswoman said it could not say when Mr Dewar would give his verdict.

A source at one worried bidder said: 'We're disappointed it has dragged on and there is always a danger it might not go ahead. It's a right mess. We've put our team on to other projects for the moment.'

Railtrack wanted work to begin in June but insiders predict that the scheme is unlikely to start until next summer at the earliest and take a year to complete.

The source added: 'I don't think there's going to be anything this side of Christmas. It will take three months for the winner to provide detailed designs and another three months for approvals.'

To try to prevent the scheme collapsing, the SPTA last month agreed to underwrite Railtrack costs of £400,000 for land purchase and fees. An SPTA spokesman said it believed the Scottish Executive would approve the link but admitted it could take until early next year.

He added: 'The executive wants to make sure all the figures add up but we wouldn't have agreed to underwrite Railtrack's costs if we weren't confident that it will be approved eventually.'