Dithering at Highways Agency cost M25 £660m

Grant Prior 14 years ago
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The cost of widening the M25 has risen by nearly a quarter because of the 18 month delay in the procurement process which led to the job being let at the height of the credit crisis.

A damning report by the National Audit Office blamed the Highways Agency for delays which saw the project cost rise by £660m to £3.4bn.

The PFI contract was finally let in May 2009, when finance costs were at their peak, to the Connect Plus consortium of Balfour Beatty, Skanska, Atkins and Egis Road Operation UK.

The NAO attacked the Highways Agency for not giving more consideration to the cheaper alternative of hard shoulder running.

The NAO said: “The case for PFI was less convincing than the Agency thought owing to shortcomings in its cost estimation process.

“Had the Agency investigated hard shoulder running earlier and been more flexible, it could have seriously considered the savings potential that hard shoulder running can offer.”

The NAO estimates the savings from a conventionally procured hard shoulder running solution might range between £400 million and £1.1 billion.

Amyas Morse, head of the National Audit Office, said: “The Highways Agency’s PFI project to widen the M25 could have achieved a materially better value for money outcome.

“This was partly because the slowness with which the project was taken forward subjected it to the cost effects of the credit crisis.

“The Agency should have adopted a more agile approach to procurement, recognizing the potential for making savings using an alternative method of relieving congestion, hard shoulder running.

“The Agency should have kept its contracting approach open to allow the use of this method.”

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