TfL pays £10m to settle Silvertown Tunnel procurement dispute

4 Jun

Transport for London (TfL) has reached an out-of-court financial settlement with the Silver Thames Connect (STC) group, following a legal complaint over the procurement process for the construction of the Silvertown Tunnel.

TfL, in a statement published by The Telegraph newspaper, said:

“The losing bidder, Silver Thames Connect, made a claim to TfL in relation to the procurement for the design, build, finance and maintenance of the Silvertown Tunnel, which was the subject of court proceedings.“
“The parties resolved the matter in March, the terms of which are confidential.”

STC – comprising Hochtieff, Dragados and Iridium Concesiones de Infraestructuras – launched its claim after TfL named the Riverlinx consortium (consisting of Ferrovial subsidiary Cintra, Bam PPP PGGM, Macquarie Capital and SK E+C) as its preferred bidder in May 2020.

Whilst the automatic suspension of award procedures was lifted in October 2020, the STC consortium continued to pursue TfL for damages.

During the court case, STC slammed the procurement process as being “flawed, in breach of the principals of equal treatment […] and manifestly erroneous”. It also accused TfL of flouting the legal principles of “transparency” and “non-discrimination” in public procurement.

STC claimed that it “should have been the winning bidder” on the grounds that it “scored significantly better than Riverlinx on price” and that TfL “failed to treat STC fairly, transparently or equally” which led to “manifestly erroneous” scoring in relation to commercial aspects of the contract.

As the case did not proceed to judgement, it is not possible to come to an impartial conclusion on the veracity of STC’s claims about the conduct and outcome of TfL’s procurement processes.

Yet, the case, albeit settled out-of-court, does once again illustrate the importance of both process and robustness needed in public procurement.

In particular, how failure, or the perception of failure, to strictly adhere to the fundamental procurement principles of transparency, equal treatment, mutual recognition and proportionality can bring real legal jeopardy (and cost!) to a contracting authority.

The Silvertown Tunnel project, set to open in 2025, is the UK’s first road tunnel to have dedicated bus lanes, and from the first day, passengers will be able to cross the river on one of around 37 zero emission buses an hour during peak periods.

This will result in the proportion of cross-river trips via public transport in this area rising from 10% to 30%, thereby supporting the increasing demand for bus transport across Greenwich, Newham and Tower Hamlets.

Cover photo by Claus Grünstäudl on Unsplash