In this age of austerity, it is certainly not good to read that that the Highways Agency has wasted £1bn of taxpayer’s money during procurement of the M25 widening contract.
But, of course, this week’s savage criticism by the Public Accounts Committee is hardly new.
The National Audit Office did, after all, make precisely the same points back in November, stating that the Agency “could have achieved a materially better value for money outcome” and “should have adopted a more agile approach to procurement.”
Clearly, there are huge lessons for the Agency to learn from this, albeit very tricky, 30 year privately financed procurement process. Not least the extraordinary finding that the Agency’s bid expectations were up to 43% higher than the contractor’s price.
But I’m not convinced that the next step should be to completely rule out future widening in favour of hard shoulder running (HSR) as some seem to be suggesting.
The use of HSR in the UK has had a pretty chequered past ever since the contract was let for the first trial on the M42 in 2003.
At that time many, including the Agency, the AA, RAC and the Parliamentary Advisory Council for Transport Safety, were concerned over long term viability of the technique.
”The use of HSR in the UK has had a pretty chequered past ever since the contract was let for the first trial on the M42 in 2003”
Despite a wealth of what appeared to be conclusive evidence dating from 1996 from across Europe that it could deliver congestion-free motorways at a fifth of the cost of widening, the Agency remained keen to keep options open for the M25.
The public was also sceptical, the Times reporting in 2007 that “motoring groups like the extra capacity but wåould prefer to see proper motorway widening”.
Engineers remained wary, seeking proper evidence that it would work in the long term.
“There is an aåpparent lack of consideration of the proposition that while [HSR] may be an effective means of managing traffic in the short term, it could in the longer term encourage traffic growth and emissions,” said University of the West of England professor of transport and society Glenn Lyons in his 2008 report for the Institute of Highways and Transportation.
So while without question the Agency has to get its procurement practices into shape, the M25 widening does have some silver lining. It is an investment in new physical assets at one of the UK’s most congested spots and by all accounts will be delivered under budget.
Second, the contractor is heavily incentivised to finish by the 2012 Olympics and then ensure congestion falls.
And third, post construction, the project will inevitably be refinanced and, with the Agency contracted to pick up the lion’s share of the upside, will benefit from reduced future payments to the contractor.
So with a fair wind – and if the Agency is still around – the saving should be capable of funding the next M25 upgrade. Hard shoulder running next perhaps?
- Antony Oliver is NCE’s editor