§ Mr. StevensonTo ask the Secretary of State for the Environment, Transport and the Regions if he will list(a) the total costs of the A50 road construction in Stoke-on-Trent, (b) the original anticipated costs of this scheme and (c) the costs of Phase 1B of the scheme, indicating separately claims by the contractor due to contract overrun. [58835]
§ Ms Glenda JacksonI have asked the Chief Executive of the Highways Agency, Mr. Lawrie Haynes, to write to my hon. Friend.
Letter from Peter Nutt to Mr. George Stevenson, dated 16 November 1998:
The Transport Minister, Glenda Jackson, has asked Lawrie Haynes to reply to your recent Parliamentary Question about the A50 Blythe Bridge to Queensway scheme. I am replying in Mr. Haynes's absence.332WThe total cost of the work carried out under the three main contracts is likely to outturn at around £123m.When the scheme entered the road programme in 1987 the work cost was estimated at £36m. But the scheme changed considerably as design work developed and shortly before work started in 1993, we estimated that the works costs would be in the order of £80m. Work was carried out under the Institution of Civil Engineers' standard form of contract under which a number of risks remain with the employer and the contractor is paid for the actual, rather than the estimated, work done. The contracts were also index linked for inflation. Apart from inflation costs rose because the contractors had to cope with unforeseen ground conditions, the diversion of uncharted statutory utility services and consequential design changes, and the introduction of Landfill Tax.A disadvantage of this type of contract is the uncertainty of cost and time. As part of the Agency's procurement initiative we are now using other forms of contract which share risks more equitably.Payments to the main contractor on Phase 1B total £50m of which £3.7m is for claims relating to the extension of the contract to allow for, among other things, unforeseen ground conditions.All costs quoted exclude VAT, the cost of Preparation and Supervision, and the costs of land acquisition and other compensation payments.