D1039 wrote:
On Nov 24, 9:05*pm, Bruce wrote:
Posted without comment:

Contractors reveal cut price deals for latest Crossrail contract
awards

24 November, 2011

Crossrail’s Farringdon and Whitechapel main station contracts will be
delivered for less than half the anticipated £625M price, it has
emerged today.

The two winning consortiums will deliver the stations for a combined
£310M.

BBMV, a joint venture of Balfour Beatty, Morgan Sindall and Vinci
Construction, will build Whitechapel station for £110M. It was
originally expected to cost up to £250M.

A three-way joint venture of Kier, Bam Nuttall and Ferrovial will
build Farringdon station for a “£200Mplus” contract on the Crossrail
scheme for major works at Farringdon station, a statement from the JV
said. It was originally expected to cost up to £375M.

I believe the original estimates will have included an "optimism bias"
mark up


True, and the original cost estimates were made at a time when
construction prices were not only at a record high, but projected to
continue rising at a rapid rate.

The recession hit construction very hard and there is no sign of any
recovery. On the contrary, forward order books are at a very low
level. So prices have dropped considerably.

I gather from someone I know at Crossrail that the overall estimated
cost for the project has now dropped by around **£2 billion** from the
original estimates. I think that means we are now looking at an
outturn cost of around £14.7 billion at 2009 prices.