Value of new London roads contracts soars to £2.6bn

Grant Prior 12 years ago

Transport for London has upped the expected value of new pan-London road maintenance contracts from £1.8 bn to £2.6bn after huge interest in the plan.

The bold bundling exercise is aimed at cutting up to 15% off the £450m spent annually on London’s road maintenance.

Of this figure around £300m is procured through more than 100 contracts based on geographic area, network type and activity. Every six years, up to £15m is spent simply on preparing contracts.

At least 10 London Boroughs, including Bexley and Kingston-upon-Thames, have said they would be willing to use the new deals.

Many more are set to sign up after more than 100 people attended a recent TfL open day to discuss the plans and the value has now been increased.

“The industry, the Department for Transport and TfL realise there are huge gains to be made from collaborative working,” said TfL director of roads Dana Skelley.

TfL will shortlist up to seven contractors by January for the contracts that can be used by the transport agency and the capital’s 32 boroughs.

TfL’s own contracts covering its 580-km road network of red routes plus 2,500 structures such as bridges and tunnels will start to come up for renewal in 2013.

This is the catalyst to introduce the new deals that split the capital into four regions.

Big savings are expected in delivery and procurement through collaboration, standardisation, common specifications, new contract conditions and e-auctions.

The new contracts would operate under a partnering ethos and could involve open book cost management depending on a study being carried out in conjunction with two London boroughs, Lambeth and Newham.

Presently, five contractors hold more than half the 100 contracts or 80% when measured by value.

One contractor has contracts in 13 boroughs and two firms, understood to be FM Conway and VolkerHighways, have won over 50% of all work in cash terms.

The Engineering & Project Management Framework is used by around seven boroughs, including Barnet, Bromley and Westminster, and some councils are taking a cautious approach to the new alliance deals by extending existing agreements to see how TfL’s new approach develops.

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