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Roads: Green light for expansion

Roads were the big winner in chancellor George Osborne’s Autumn Statement, with schemes worth £1.5bn winning funding and getting the go-ahead to start construction in the next three years.

The “crown jewel” of these, according to Highways Agency chief executive Graham Dalton, is the £314M upgrade of the A1 between Leeming and Barton; a scheme previously canned by Osborne in his 2010 Comprehensive Spending Review, along with eight others, for being unaff ordable.

That it, and a raft of other schemes such as the A5-M1 link in Bedfordshire, is back on the agenda is clear evidence of the confi dence government now places on the Highways Agency and its framework contractors to deliver what they say they will, when they say they will for an efficient price. Indeed, Dalton is proud of the way that over the last couple of years the Agency and its suppliers have got together to fi nd ways to reduce the price of work by 20%.

Good news indeed. And for Balfour Beatty Major Civil Engineering managing director Stephen Tarr, there is even more positive news behind the headlines of the chancellor’s statement.


“It is good the government is talking about investing in roads specifically and infrastructure generally”

Stephen Tarr, Balfour Beatty

“For me there are two very encouraging statements, and fi rst, it is the commitment to invest in pipeline schemes,” he says, referring to the easily-missed £42M that has been earmarked as development funding for the Highways Agency’s project pipeline.

“It is a conscious decision to develop these schemes,” says Tarr. “One of the things government is alive to is that there is a lag between committing to schemes and actually building them and that this lag can be one or two years plus, depending on what has been done developing them.

“So it is a positive that schemes are being developed so that they can be delivered.”

Tarr’s firm has been a beneficiary of such work in the recent past, with the A3 Hindhead Tunnel and A46 Newark schemes both given the go-ahead as a direct result of being ready to go when funding was in the offing.

“Having schemes available to go allows the government to make decisions,” says Tarr. “That was absolutely the case on the A3 and A46. This month’s green light to the A1 and A5-M1 schemes are also classic examples; both have planning permission and are ready to roll.

“If we had more schemes like those, maybe there would have been even more funding,” he notes.

The relative lack of schemes ready to start on site is highlighted in the Agency’s future spend profile; this year’s capital spend of around £2.5bn drops to around £2bn next year before recovering up to around £3bn in 2014/15 and 2015/16. “The real question is what happens after that,” says Tarr. A new spending review next year will go some way to answering that question, and having schemes ready to build will help.

The second piece of good news in the Autumn Statement, says Tarr, was the reinforcement of the previously announced move to accelerate delivery of projects on site; four schemes in total - three Managed Motorway projects and the A160/180 upgrade will trial the new initiative with the aim of cutting the time it takes to deliver Managed Motorway projects in half and the more traditional road widening job by 25%.

“Calling it a renaissance is over-stating it,” says Tarr. “But there is recognition that improving roads provides a productive outcome to the economy and that by accelerating their delivery you can reap the benefits earlier. It is good the government is talking about investing in roads specifically and infrastructure generally. These are encouraging statements.”

Of course, when the initiative was announced questions were immediately raised as to whether such working could be effi cient, or even manageable, as contractors inevitably rush towards 24/7 working to get the job done quicker.

“It needs to be a guarded approach,” warns Tarr. “It can’t be a case of just rushing at it. Work still needs to be done safely and there are environmental considerations,” he says. No-one likes a noisy neighbour and banging in piles at 2am never goes down well.

So for Tarr, it requires more fundamental thinking. “You have to start with a challenge and get people thinking differently,” he says, adding that if the industry just does what it’s always done and throws more men and resources at the problem the change will be incremental at best. “It’s how you look at the process,” he says. “At design, and at approvals and consents, and to what extent you can do things in parallel, and from a construction point of view, looking at what can be done in advance.

“The government is not going to use real tolls on existing routes, but what is a new route, what is an upgraded route?”

Stephen Tarr, Balfour Beatty

“It may be that we have to start designing for speed. Now that’s an interesting philosophy that may start to drive our thinking,” he muses. “We may get to a situation where it may cost more in unit cost terms, but you may be able to reduce timerelated costs and get to something that is closer to cost neutrallity.”

Standards will, as always, have a key role to play. Or as Tarr puts it: “There is nothing quicker than not doing something. We have to look at materials standards and properties.”

Questions such as “do I really need to protect this pier?” need to be asked, he says. The Agency has set up a taskforce to tackle some of these issues, and Tarr is itching to get involved. Just as he is itching to get building some roads.

He is also, of course, happy with the £1.5bn overall, and in particular the way the cash is being spread across all forms of project, big and small. The statement earmarked £400M for maintenance and renewal, £325M for a pinch point fund for local and national schemes, as well as £50M for cycling schemes. “There’s a bit in there for everyone,” says Tarr.

Finally, there is the elephant in the room to consider: the ongoing study into the future funding mechanism for Britain’s trunk road network that reports early in the New Year.

“The issue government is grappling with is how to incentivise private companies to provide an improved highway service; what is a sensible model for that,” explains Tarr. “Where does the funding come from?”

The situation is incredibly complex; tolling is an option, but a significant proportion of the trunk road network is already effectively owned and operated privately under shadow tolls through DBFOs and, of course, the M25 PFI, in which Balfour Beatty has a major stake as part of the Connect Plus consortium.

The government has already ruled out tolling existing roads, but has mooted the cancelled upgrade of the A14 as a possible tolled option.

“The government is not going to use real tolls on existing routes, but what is a new route, what is an upgraded route?” he asks. “These are the issues the study is having to work through.”

The industry awaits the findings with interest; 2013 promises to be an interesting one for the UK highway network and those that work on it.

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