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Doing business in the road sector: MAC – Managing Agent Contract

The Highways Agency has fourteen Managing Agent Contracts, covering the entire strategic road network.

MAC deals, which last five to seven years, cover roadworks, road maintenance works, traffic control equipment, engineering services, maintenance, improvement activities, incident management and contingency planning on all trunk roads and highways in the area contract.

Contracts are generally run from a control room that allows them to see any incidents that may arise on the part of the network they are dealing with. Problems include road kill, uneven surfaces and damage caused by accidents.

Though teams can bid for as many contracts as they like, the Highways Agency does not permit any one contractor to hold more than a third of its lane kilometres, or more than four MAC contracts.

Suppliers taking on such work will find that local authorities offer similar frameworks, ensuring a broad client base and the ongoing opportunity to find work.

Hard shoulder running, a great opportunity

Instead of traditional road widening the Highways Agency has embarked on a programme of managed motorways – essentially using the hard shoulder as a third lane during busy times.

As well as providing a lot more capacity at an affordable cost, the move heralds a great opportunity for contractors to enter the sector, as the work makes a move away from the more traditional civils-based jobs associated with the highways sector.

In January the Government published the results of more detailed work carried out into HSR and traditional widening.

It says: “This more detailed work suggests that in all cases where there was originally a proposed widening solution, HSR would provide a feasible alternative; and that on average it would save around 40 per cent of capital costs, while for particular schemes savings could be almost 60 per cent. HSR schemes provide the majority of benefits that widening would, generally at a lower cost to the environment. Combining this with the fact that capital costs are significantly lower means that the value for money of HSR is generally higher.”

The first hard shoulder running contract at the Birmingham Box has already been awarded to Carillion, but expressions of interest are now invited to win a place on a £2 billion framework to deliver further schemes.

The tender notice states: “The delivery partners will be expected to work with each other and with other organisations contracted to the Highways Agency to deliver the requirements of the managed motorways programme.

“The delivery partners will also construct, integrate and commission the managed motorways schemes, in collaboration with other organisations engaged in carrying out design, construction and supply, to ensure successful delivery of programme level objectives.”

Each of the schemes is likely to consist of the following aspects:

  • Construction of highways infrastructure, including the provision of traffic management
  • Testing and commissioning of infrastructure.
  • Construction of gantries
  • Removal and replacement of bases/superstructures
  • Modifications to existing structures
  • Construction of emergency refuge areas
  • Hardshoulder reconstruction

Case study: Atkins

By Philip Hoare, managing director of Atkins Highway Services

Atkins has been involved in providing Highways Management Services to the Highways Agency since 1996, first as a Managing Agent and then as a MAC Provider in Area 11 as part of the Optima joint venture and in Area 6 as a single service provider. 

The MACs have been and are a great opportunity for us to work closely as a service provider with the Highways Agency to drive improvement to the strategic road network. Performance management and clear accountability lie at the heart of the MAC contract and this clear steer by the agency has helped us drive a stronger performance culture within our own organisation. 

Contract durations of between five and seven years have provided us with a certainty of workload that has enabled us to invest in our people, to focus on delivering innovation and to drive improvement in the services we provide. 

We have taken much of the learning and investment that we have made in developing MAC services into the local authority business and we have successfully combined our experience in both markets to the benefit of our customers and to ourselves in terms of business growth.

This involvement has seen our Highways Services business grow from 25 people in 1996 to 1,300 people now with an annual turnover of £160 million.

Useful Links

Highways Agency – www.highways.gov.uk

OJEU – www.ted.europa.eu

Department for Transport – www.dft.gov.uk

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