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NAO roads report: Five construction takeaways

Today’s damning National Audit Office report into the £15bn Roads Investment Strategy has left serious question marks over whether Highways England will start all 112 projects initially promised to be under way by 2020.

So two years into the programme, what are the biggest problems facing the ambitious attempt to overhaul the UK’s strategic road network, and what needs to be done to overcome them?

Construction News has poured through the report and picked out five of the biggest takeaways for the construction sector. 

A change is gonna come….

While the aim of the Roads Investment Strategy was to ensure the start of 112 projects before March 2020, do not bank on this actually happening.

Although Highways England has insisted it hasn’t got plans to cancel any projects, the NAO report says this option is on the table, along with delays and revisions, for certain schemes.

At a time where contractors on Highways England’s Collaborative Delivery Framework are already growing frustrated with the lack of work coming their way, it appears we could see as many 16 of those planned projects cancelled, delayed, changed or merged.

Highways England’s updated delivery plan in June will hopefully reveal all.

Backlog building

When the RIS was launched, 69 of the 112 enhancement projects were in the early planning stages.

Road projects usually take around five years from inception to the start of construction, according to the NAO. This has led to a situation where 54 of the 112 projects are now expected to start in 2019-20.

And that is not even taking into account a certain £55.7bn rail project. The report warns this stretching of infrastructure resources could lead to deliverability difficulties and project costs rising. This means overall capital programme costs – currently forecast to be £841m over budget – could get greater still.

Skills – and paying consultants’ bills

In 2016, Highways England procured contracts for six major projects through the RIS.

Despite the number being relatively small, the organisation’s headcount of procurement and commercial specialists was still 19 per cent below target.

Yet in 2017 the agency plans to procure more than 50 contracts.

Currently Highways England fills in the gaps with consultancy staff, often costing three times the price of a payrolled staff member according to the government spending watchdog.

The NAO feels this procurement pinch could only get worse if there isn’t a rejig of the construction timetable.

Managing expectations

Highways England has developed options to push back the start dates of up to 19 projects from the current investment programme into the early years of the second Roads Investment Strategy from 2020, the NAO report revealed.

It’s all rather familiar. Last year, four projects that make up part of the £2.8bn Great Western Main Line electrification were postponed from Network Rail’s control period 5 to its replacement beginning in 2020.

While the potential road delays may not be as high profile, and the forecast cost overruns are nowhere near some of those suffered on the tracks, there is a sense of déjà vu.

While lines of “biggest investment since the Victorian times” appear good for government PR, they are not so clever if they are continuously tagged to negative reports from the NAO and public accounts committee.

Could the planning of these programmes be more realistic and more thorough?

The NAO suggests that the speed with which the programme was designed, in just 17 months, created risks to cost and deliverability.

It could all happen again

While the NAO said that Highways England and the Department for Transport were planning RIS2 in a much more robust way, it said there was still a risk history could repeat itself.

The report said that the back-loaded planning of projects – with more starting towards the end of the period – will mean it will cost £8.3bn to complete RIS 1 projects in RIS 2, approximately £500m higher than initially forecast.

Unless changes are made, the NAO says there is nothing stopping a ripple effect from occurring and the uneven profiling present in RIS 1 being repeated in RIS 2.

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