18. The NAO found that contractors' levels of productivity diverged significantly and repeatedly from Crossrail Ltd's expectations.39 The previous Chair told us that he visited Crossrail sites every other week and at each Crossrail Ltd board meeting metrics on completeness were discussed.40 The former Chief Executive similarly told us that he was constantly walking the sites and talking to contractors to understand progress. He added that while progress was demonstrable for physical activity, there were issues measuring the progress of the software. However, the current Chief Executive, who was also on the Crossrail Ltd Board at that time, stated that when he became Chief Executive he was surprised at the lack of station completion. He thought that there was not enough granularity of information coming from the supply chain, and in 2018, there was not enough transparency about the ever-increasing optimism bias of recovery plans and mitigations agreed because of delays. The previous Chair placed some of the blame for delays against the scheme on some of the key contractors who he asserted had been causing problems and not acting in the way he wanted them to. He did acknowledge, however, that there had been a consistent gap between the ambition to achieve the December 2018 opening date and what was delivered on the ground.41
19. The large number of dependencies between the work of different contractors on the programme led to significant cost increases across the programme. Between 2013 and 2018, changes and delays to the programme resulted in more than £2.5 billion in increased costs. Nearly £1 billion of this cost increase was the result of additional payments to contractors by Crossrail Ltd for changes that were not caused by the contractor.42 Crossrail Ltd told us that such 'compensation events', of which around 21,00 had accumulated on Crossrail by 2016, are part of the process for resolving contractual issues as they arise under the form of contract used on Crossrail. It explained that this approach was designed to avoid leaving claims to be resolved at the end of the programme, with the risk of disputes needing to be resolved in court.43
20. Crossrail Ltd told us that it was resetting its commercial and contracting approach to complete the programme, including renegotiating with its main contractors the terms of the remaining work, including agreeing fixed, lump sum prices with some contractors.44 Crossrail Ltd confirmed that this included looking at each contract individually and will incentivise contractors to reduce risk to the programme not completing on time if needed. It told us that it was working with seven or eight large companies, and 20 to 30 smaller companies, and each one will have a discrete package and approach that will be agreed with the Crossrail Ltd board.45
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39 C&AG's report, Appendix 3
40 Qq 121-122
41 Q 80-82, 117
42 C&AG's report, paras 2.11-2.14 and Figure 5
43 Q 196
44 C&AG's report, paras 3.8-3.9
45 Q 211