Better procurement means cheaper roads, say MPs

12 November 2007
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12 November 2007 | Antony Barton

The government should experiment with different procurement methods to keep down the costs of building roads, according to a committee of MPs.

A report from the Committee of Public Accounts (PAC) found that by September 2006 the Highways Agency's 36 completed schemes in its improvement programme cost 40 per cent more than estimated. For schemes still to be completed, the latest forecasts indicate final costs could be 27 per cent more than original estimates.

The PAC says the Department for Transport and the agency have not kept abreast of changes in the construction market and have relied on inaccurate historical data. It recommends the two bodies analyse cost forecasts for construction material and labour and use different procurement methods to reduce costs.

The report refers to analysis carried out by the National Audit Office that showed target costs for the agency's Early Contractor Involvement deals, which involve contractors in projects at an early stage to reduce costs and increase accountability, have been on average 11 per cent higher than initial target costs.

Edward Leigh, chairman of the PAC, said: "Since the dawn of civilisation, governments have been building roads, but the agency is apparently unable to get on top of providing accurate estimates. As the costs of schemes soar, the agency keeps within its budget by delivering the schemes late, sometimes years down the line."



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