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NAO urged to probe rocketing road costs


TRANSPORT SECRETARY Alistair Darling this week faced calls for an investigation into road building costs after revealing a massive £1.6bn rise in the price of Britain's roads programme.

He faced calls for a National Audit Office investigation into revelations that the budget for schemes in the Highways Agency's Targeted Programme of Improvements had soared from £8.8bn to £10.4bn in six years.

The figures were published last week in answer to a written parliamentary question from Liberal transport spokesman Tom Brake.

They attribute £1.55bn of the increase to schemes identified before 2003. Since then the Treasury has insisted that all schemes, including these, include extra sums for VAT, infl ation at 2.5% and an 'optimism bias' of 5%-45% to allow for errors in scheme appraisal.

But these factors only accounted for £600M of the cost increases.

Faster-than-expected construction infl on and cost increases above optimum bias assumptions accounted for the remaining £948M of the increase.

'We have asked the National Audit Office to investigate why there has been such a failure to address those underestimates, ' Brake told MPs.

Darling said that mistakes had been made in pricing schemes but that the government was now 'taking a far more realistic view of what projects are likely to cost'.

INFOPLUS Access a full breakdown of the cost increases at www. nceplus. co. uk

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