§ Mr. BennettTo ask the Secretary of State for the Environment, Transport and the Regions (1) if he will list, for each of contracts 1, 2, 3, 4 and 5 for the M60 motorway between Denton and Middleton(a) the original price, (b) the cost of the completed contracts and (c) the estimated final cost of the remaining contracts; [104425]
(2) when he expects the M60 between Denton and Middleton to be completed; and if it will be opened in phases or in its entirety. [104426]
§ Mr. HillI have asked the Chief Executive of the Highways Agency, Mr. Peter Nutt, to write to my hon. Friend.
Letter from Peter Nutt to Mr. Andrew Bennett, dated 20 January 2000:
The Transport Minister, Keith Hill, has asked me to reply to your recent Parliamentary Questions about the costs and programme for the M60 Manchester Outer Ring Road.The scheme is split into four main contracts. The tender prices for each contract were: Contract 1, £101.9M; Contract 2, £48.9M; Contract 3, £50.1M and Contract 4, £18.2M.Contracts 1 and 3 are still under construction so it will be some while before we know the final cost and although work on Contract 2 is complete, the final account has not been settled. In the circumstances, I am afraid I cannot let you have an estimate of the final outturn cost for these contracts. To do so would prejudice our position with the contractors in the event of disputes over claims or the settlement of accounts.The final cost of Contract 4 was £30M.The contract was let under the Institute of Civil Engineers 5th Edition form of contract which allows the contractor to be paid for the actual, rather than the estimated, work done and the risks that occur.It is not always possible to identify in advance all the necessary work nor the precise nature of the ground and the contract allows for extensions of time for certain risks. In this case, the contract was extended by 37 weeks to allow for unforeseen ground conditions, including contaminated ground. Work was also severely delayed by exceptionally bad weather.It is this additional work which caused costs to rise.The disadvantage of this form of contract was the uncertainty of cost and time and the Agency addressed these issues in a review which led to an announcement in 1997 of new procurement initiatives. We are now using other forms of contract which share risk more equitably and encourage a partnering approach to get away from the adversarial way which has marked some of our contracts in the past.We expect the remaining contracts to be completed and opened in their entirety by Summer this year. There are no plans for phased openings.