§ Mr. LoveTo ask the Secretary of State for the Environment, Transport and the Regions what was the final cost or expected final cost for each of the contracts to extend the North Circular Road (A406) at Fore Street N18 extending east to the Waltham Forest boundary, and in each case what was the increase and the percentage charge over the original budgeted cost; and what is the date or expected date of completion of each contract. [45339]
§ Ms Glenda JacksonI have asked the Chief Executive of the Highways Agency, Mr. Lawrie Haynes, to write to my hon. Friend.
Letter from Lawrie Haynes to Mr. Andrew Love, dated 15 June 1998:
59WThe Minister for Transport in London, Glenda Jackson, has asked me to reply to your recent Parliamentary Question about the improvements to the A406 between Fore Street and Hall Lane.The information asked for is on the attached table with one exception.I am afraid that for commercial reasons I cannot let you have an estimate of the final outturn costs. To do so would weaken our bargaining position with the contractor in the event of disputes over the final account or the settlement of claims. I have therefore given figures showing the spend so far.The contracts were let under the Institution of Civil Engineers standard form of contract, which has been used for many years throughout the construction industry for major civil engineering works, and in which the contractor is paid for the actual, rather than estimated, work done. With road schemes it is not possible to identify all of the necessary work in advance of construction and this was true in this case which is a complex project in an urban environment.The disadvantage of using this form of contract is the uncertainty of costs and time but the Highways Agency addressed these concerns in a review of its procurement strategy, which led to an announcement in June 1997 of new procurement initiatives. As a result we are beginning to use other forms of contract, which share risk more equitably. Partnering is being encouraged to get away from the adversarial way in which some of our contracts have been conducted in the past.
Highway scheme Completion date Original works budget1 £ million–1992 Spend to date1 £ million Percentage increase Estimated late summer/early autumn Contract A: Fore Street Underpass (Tunnel-July) 56.6 56.5 — Contract B: Angel Road Viaduct 28 November 1996 31.4 37.7 18 Contract C: Lea Valley Viaduct 22 August 1996 32.7 39.3 20.2 Total 120.7 133.5 10.5 1 Figures include the cost of works, statutory undertakers, variations of price and contingencies. They exclude Traffic Control Systems Unit (TCSU), Preparation and Supervision (P&S) and Land costs Note:
All figures are exclusive of VAT