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Nichols report seen as a 'missed opportunity'


CONTRACTORS HAVE described Mike Nichols's report into cost escalation in the Highways Agency's major roads programme as a 'missed opportunity'.

The industry said that Nichols had missed the chance to hammer home with government the effect of delays on cost with construction ination running rampant.

'The biggest single factor in cost increases has been higher-than-expected ination (accounting for half), ' says the report.

A ational udit f ce (NAO) investigation into the costs of road building in England and Wales, also published last week, reached the same conclusion on construction ination.

'In 2005, consultants reported to the Agency that ination in the highways sector has been, and will continue to be, above the general rate of ination, and has been a signicant factor, ' says the NAO report.

'I was expecting [the Agency] to put a marker down, ' said one contractor reacting to the Nichols report. 'If the government keeps messing around with long-term things with short-term budgets, then costs are going to rise.

'We've had some jobs that for the sake of £1M of design work have been put back and have cost millions in delivery.' Nichols warned that construction inflation was not the only thing behind cost estimates rising from £9.4bn in April 2005 to £11.8bn in October 2006.

'The problem has been compounded by the manner in which estimates are produced, presented and controlled, inadequate risk and project management, time delays and changes in scope, ' he said.

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