Ongoing uncertainty about how Highways England will finance the tunnel close to Stonehenge is putting the project’s viability at risk, public spending watchdog the National Audit Office (NAO) claims.
In its report Improving the A303 between Amesbury and Berwick Down, the NAO concludes that “there are risks for Highways England and the Department [of Transport] to manage to ensure the project has a realistic chance of being value for money”.
In particular, the report states that funding uncertainty has already led to rising costs and delays to construction which could ultimately diminish the project’s viability.
The A303 Stonehenge tunnel was earmarked to be funded via the PF2 private financing model and so was not included in Highways England’s draft £25bn Road Investment Strategy 2 spending programme.
However, chancellor Philip Hammond announced a halt to PF2/ PFI funding in the Autumn Budget and has not yet tabled an alternative means of privately financing projects.
At the time Highways England chief executive Jim O’Sullivan told New Civil Engineer that a new funding mechanism was needed for the Stonehenge tunnel and the approach roads on the Lower Thames Crossing.
The NAO concludes that Highways England must now “reconsider its priorities for the second Road Investment Strategy” putting other planned projects at risk, “or it will need additional funding from HM Treasury”.
Highways England has undertaken preliminary surveys and expects construction to begin in December 2021 with procurement starting later this summer, subject to ministerial approval. Anticipated range of cost of the project is £1.5bn to £2.4bn, with an opening date scheduled for 2026.
The NAO warned that rising costs would further reduce the project’s already low cost to benefit ratio.
“Because of the high cost of building a tunnel, the Amesbury to Berwick Down project, at £1.15 of quantified benefit for every £1 spent, has a significantly lower benefit–cost ratio than is usual in road schemes,” it adds. “Given our experience of cost increases on projects of this kind, this ratio could move to an even lower or negative value.
“It will be even more important therefore that the Department [of Transport] and Highways England ensure that the project meets its strategic and heritage objectives, and that Highways England manages the project well.”
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