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Sydney Lenssen Consultants out in the cold on DBFOs

The jury is still out on whether DBFO is the best way to build major roads. They became the flagship of the Private Finance Initiative, but so far the A13 Thames Gateway and the Birmingham Northern Relief Road are the only DBFO projects to have been given the go-ahead by New Labour.

New DBFO schemes will have to meet the Government's new priorities - 'integrated', 'green', and preferably both. And the Highways Agency will be required to ensure that any scheme chosen for this route will yield value for money.

The Agency was the politically driven midwife which did well to get privately financed motorways going in double-quick time. Somewhat boastfully, it then proclaimed private roads were cheaper, only to be lambasted by the National Audit Office and the Public Accounts Committee.

Although unsure that any future DBFOs will be sanctioned, or how its own role might change under new Government policies, the Agency has been learning its lessons from those contracts already under way or completed. It wants to drive concessionaires, contractors and its agents further along the learning curve, as well as rethinking its own role.

New guidelines have been circulating internally recently as a result of a management review by Halcrow, followed by think-tank sessions by Agency project managers. The Operational Services Action Group has agreed a two-page summary of changes, Agency board directors have approved it, and only the fine detail will have to wait for each contract negotiation.

The review accepts that too many parties can stick their oar in - delay or change designs, materials or approvals - even though they haven't any contract status or liability to pay. Contracts will now include new definitions of roles and duties, and try to reduce the number of parties involved.

Consulting engineers are likely to lose out (see News).

Outsiders could be excused thinking that if a DBFO contractor is responsible for design and must maintain the road, the company would need minimum supervision.

But the Agency wants to make doubly-sure that when the roads and bridges are returned after 30 years to public ownership there are no hidden bombshells.

There are also other duties which the Transport Secretary cannot pass on to the concessionaire, such as safety on the highway, especially during the building. The Agency has its own manager on site for this.

So the construction team has to cope with the Agency which almost always refers to regional and even national level for final verdicts, together with the consultant paid for by the HA to appraise designs and changes. These consultants have little power to tell the contractor what to do, but complex matters take time to resolve.

Contractors in turn have been criticised for not giving enough attention to safety, ignoring the best solution in favour of those which just comply and are cheap. A system of penalty points was evolved to warn the contractor of non-compliance. That worked for a while, but as the points mounted up, the DBFO bankers started to be alarmed. As a result, penalty points become a reluctant last recourse.

After only two years of DBFOs, it is not surprising that pro-cedures have yet to settle down. Conventional contracts financed from the public purse still give problems after 50 years' practice.

The one big DBFO lesson so far is that contractors can be forced to shoulder more risk. Clause 12 claims for unforeseen ground conditions have gone, along with a host of other excuses, although different claims have started to emerge.

It would be a pity, after all the revolutionary changes, if DBFO contracts were to wither. The Highways Agency has a prime responsibility to ensure that the proven advantages are put to further use, but it should be wary of wasting the proven expertise of consultants.

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