Costain Welsh road job £100m over budget and two years late

Aaron Morby 3 years ago

Costain’s Heads of the Valleys A465 road project in Wales is now expected to come in more than £100m over budget and more than two years late.

Costain contract involves seven bridges and 12.5km of retaining walls
Costain contract involves seven bridges and 12.5km of retaining walls

Latest Welsh Government estimates suggest improving an 8km stretch of the road between Gilwern and Brynmawr will cost £321m and now not be completed until next year.

These big cost overruns have tipped Costain and the Welsh Government into a simmering dispute about who is liable to pay certain costs.

A report issued today by the Auditor General for Wales, commissioned as a result of the dispute, shines a light on problems on the project.

Some of the £100m increase relates to design changes requested by the Welsh Government and extra measures to address environmental impacts, but the engineering and contractual challenges experienced on the project account for most of it, concludes the report.

Costain argues that the latest estimates of Welsh Government liabilities are understated, while the authorities argue the figures represent a reasonable allowance for its liabilities at this stage.

It also emerged that Costain refused twice in 2017 to sort issues out using adjudication, with the Welsh Government finally commencing adjudications in 2018 against Costain on three separate issues without its agreement.

Since then, the pair have been involved in separate adjudications and arbitrations on different project issues with varying success.

The project was progressed using early contractor involvement with Costain first signed up in 2011. By December 2014, at the start of the detailed design and construction contract, target costs stood at £223m.

The project involves building on a steep-sided valley – the Clydach Gorge – and passes through the Brecon Beacons National Park. It forms part of a larger scheme to improve 40km of the A465 between Hirwaun and Abergavenny which is now expected to cost around £1bn overall.

The final cost and timescale for Costain’s project remain uncertain. Work was due to finish in September 2018, but full completion is now expected to run to Spring 2021.

Auditor General for Wales, Adrian Crompton said today: “This is not the first time that the Welsh Government has faced difficulties with significant cost increases and delays on road projects and it is vital that lessons are learnt for future infrastructure schemes.

“Despite some wider benefits being delivered and expectations about the eventual impact of the road improvement, those living and working locally are paying a higher than expected price for the ongoing delays and disruption during construction.”

Six sections of the A465 with a range of procurement models

In 2000, the Welsh Government anticipated that all six sections could potentially be completed by 2009, for £268m

In the previous Auditor General’s January 2011 report, the Welsh Government expected the entire A465 scheme to be completed by 2020 for £763m.

But the timetable has slipped and the Welsh Government estimates the scheme will complete in 2025 at a total cost now of around £1bn.

A Welsh Government spokesperson said: “This project is widely recognised as one of the most complex road engineering projects in the UK at the moment, presenting significant construction challenges.

“We recognise the frustration caused by the issues highlighted in the report, and will, of course, consider its findings. Lessons from the project so far have already been incorporated into subsequent projects.

“We remain confident that this ambitious and complex scheme will be completed as intended and will bring significant benefits to the region.”

Latest news

Eric Wright wins tricky £52m Liverpool transformation

Contractor working with engineers at Ridge and Partners on "challenging" Stanley Lock Flight site
1 day ago

Investment giant buys Bristol M&E contractor

RDCP Infrastructure acquires Avon Combined Electrical Services
1 day ago

Demolition start for £50m Farnworth town centre rebuild

Caddick Construction is tipped for main works due to start in the spring
1 day ago

L&G Modular strikes deal to build 1,000 affordable homes

Modular homes business teams up with Hampshire's Vivid housing association
1 day ago

Former Erith operations director joins John F Hunt

Scott Exell named new operations director at demolition specialist John F Hunt
2 days ago

Green light for £135m Leeds twin tower resi scheme

Construction to start in New Year on 500 build-to-rent apartments
2 days ago

Mace hits 1m tonnes carbon saving target for clients

Present work pipeline betters 2026 carbon emission saving target
2 days ago

Plans in for £40m surf park at former Kent colliery

Seahive surf lagoon and health resort will be built near Deal
2 days ago

Crushed demolition worker vows to return to industry

Shannon Brasier hoping to return to construction following horror accident
2 days ago

Mount Anvil to start 900-home North London estate rebuild

Planning approval paves way for Barnsbury Estate rebuild in Islington
2 days ago

Green light for major laboratory campus in Cambridge

Developer BioMed to tender first building on 600,000 sq ft lab complex in the New Year
2 days ago

Belfast firm signs the biggest work deal yet under Project Gigabit

Fibrus to hook-up rural Cumbria to lightning-fast broadband under £108m deal
2 days ago

McLaren wins Leeds logistics park contract

Work to start imminently on warehouse complex for Firethorn Trust
3 days ago

Work restarts on £683m waste power plant after site death

Construction suspended for a week of investigations following fatality
3 days ago

Demolition starts on £135m Wigan Galleries scheme

Contractor BCEGI starts work on project to redevelop Wigan town centre
3 days ago

Amey CEO to step down following private equity buyout

Amanda Fisher to leave once business is transferred to new owners
3 days ago

New body set up to vet plant operator card schemes

Contractor trades bodies unite to tackle competency concerns over plant operator skills cards
3 days ago

Kier leads switch to hybrid battery generators

Battery units work alongside smaller generators cutting run times by nearly 60%
3 days ago

Plans in for first Leeds co-living scheme

Watkin Jones submits plan to convert old Direct Line HQ into 230 studio flats
3 days ago

Demolition worker crushed by excavator

Court hears 20-year-old woman was left with "life changing injuries"
4 days ago

Government pays £700m for 50% stake in Sizewell C

New body, Great British Nuclear, will be set up to develop pipeline of nuclear projects
4 days ago

Costain wins Heathrow Airport asset renewal deal

Firm takes early contractor involvement role in Terminal 2 baggage handling upgrade
4 days ago

Worker killed on £683m waste power plant site

Fatal collision involving heavy goods vehicle on giant north London site
5 days ago

HS2 JV shifts four Wembley Stadiums of earth in record time

EKFB team digs and hauls 15 million cu m of muck in 20 months
4 days ago

Milestone wins £300m Wiltshire highways upkeep

Ringway will hand over to Milestone in March next year
4 days ago

Low-risk business model helps Renew post record results

Renew reveals latest acquisition with £15.6m purchase of water specialist Enisca
4 days ago

London Albert Embankment hotel towers approved

Two separate hotels rising to 26 and 29 storeys approved
4 days ago

Keltbray names new director of strategic engineering

Tim Lohmann takes up newly-formed role to drive innovative engineering solutions
4 days ago

Go-ahead for £200m lithium refinery on Teesside

Work to start next year on Europe's first lithium hydroxide processing plant
5 days ago

HS2 agency workers paid the wrong wages

Payroll software problems leave workers out of pocket
5 days ago

Contractor services