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Highway heaven

Overview - With twice as much to spend as last year and some mega projects on his books, Highways Agency major projects director Keith Miller is in a bullish mood. Mark Hansford met him.

By anybody's standards the Highways Agency's 2006 business plan makes great reading.

Major projects spend in this nancial year will be almost twice that last year, and next year will be the same. And the pace is unlikely to let up, with massive plans for the M1, M6 and M25 on the cusp of fruition.

Indeed, work is already underway on the southernmost section of the M1 (see box).

So Agency major projects director Keith Miller has every reason to be in a condent mood.

'When we launched the business plan we said it was good news in and it is. The spend for 2006/7 is up from £589M to over £1bn and that will be sustained next year.

'It is what we anticipated and what we have planned for - starting with the 10 year (transport) plan, ' he says, referring to the much maligned and now widely disregarded 2000 plan.

'We are still broadly on track in terms of money and progress.

This is a very exciting time to be in the roads business.

'With all the focus this year on Brunel and engineering, in terms of challenges of the job I think the heyday of road building is now, ' he says looking at some of the big schemes on his targeted programme of improvements.

'Our challenge is not to just carry out £1bn of road widening, but to do it in a way that gives best value and minimises impact on our customers. We are designing schemes so they can be built without trafc delays, ' he says, pointedly referring to the recent widening of the M25 around Heathrow.

'The headlines before we started there were of two years of misery and it wasn't. We have had feedback from customers praising the way it was done. But the perception is still difcult, ' he says.

Miller also emphases that safety remains paramount. 'The three contracts we nished in 2005/06 had zero reportable accidents'.

But Miller has no illusions about the challenges ahead, particularly regarding cost control. But he swiftly dismisses talk of cost overruns.

'A lot has been said about this, ' he says, referring to Conservative MPs parliamentary questions about soaring costs and the subsequent interrogation of chief executive Archie Robertson by the transport select committee (NCE 23 February).

'They're not cost overruns.

Its simply a case that we are now forecasting outturn costs to give ministers the opportunity to stand back and say: 'do I still want to pay X for this scheme?'.

'In the past, tenders were unrealistically deated for commercial reasons. With ECI (The Agency's Early Contractor Involvement contract where contractors do not tender on price), once when we get to the point of setting the target cost we are reasonably condent that that's what we'll pay.' But Miller does accept that soaring oil and steel prices and skill shortages present a major issue.

Consequently his team is actively looking at packaging major schemes like the M1 widening as a series of ECI contracts with each ECI contractor working in an alliance to command bulk rates from the supply chain.

This could spell the end for plans to use private nance on the East Midlands section (NCE 25 May).

The Agency may even contract directly with suppliers of bulk materials such as blacktop and gantries to get the best rates for its ECI contractors.

'It's not rocket science to go to a blacktop contractor with these schemes. If we are going to give all the M1 work to perhaps two contractors, they would get their pencils very sharp. The question is, would they get them as sharp as they would for a Balfour Beatty or a Costain?' The alliance approach could be trialled rst in the south east.

'We are looking at a similar approach with the A2, M25 junctions 1b to 3 and A2/A282.

The three contracts are let, but there is a mini-alliance option.' The mere fact that the Agency is considering these approaches is testament to the power of ECI and the knowledge of the industry that it is gleaning through it.

'We are very much an informed client. We know a lot more now than we used to know.

Design & build is a black box and is designed to be a black box and you lose sight of the dynamic of construction. We are getting that intelligence back'.

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