The Confederation of British Industry has urged the Government to reduce the number of Highways Agency maintenance contracts as politicians continue to lobby for private investment in the country’s infrastructure.
In a submission to help inform the forthcoming Comprehensive Spending Review, the CBI said reducing the number of Managing Agent Contractor Areas would help to cut procurement costs.
It said contracts encompassing larger geographical areas than those covered by the Highways Agency’s 14 current MAC contracts would also reduce maintenance costs.
However the CBI said maintenance budgets and road upgrades addressing serious bottlenecks should be treated as a priority, while Active Traffic Management schemes - covered by the Agency’s £2bn Managed Motorways
Framework - would be more costeffective than full road widening.
An Agency spokesman said: “The Highways Agency does and will continue to ensure that our contracts including the contractual arrangements represent the best value for money, and ensure delivery and sustainability. We will continue to work with our supply chain to harness buying power and generate increased value through greater efficiencies and lower unit costs.”
Tarmac National Contracting director Paul Fleetham told Construction News: “As we approach the Comprehensive
Spending Review, it is all too easy for individual business sectors to claim they deserve a special hearing, but road maintenance has a compelling case.
“Many of our roads are in a dire state and we risk adding years to the already formidable 11-year road maintenance backlog. I would urge the Coalition Government not to lose sight of pre-election pledges to maintain investment in our transport network.”
The CBI also identified rail as an area that could contribute to Government savings. It said not all of the £35bn investment planned under Network Rail’s Control Period 4, covering 2009/10 - 2013/14, would be affordable
despite praising the network operator’s cost reduction efforts thus far.
It hailed London’s £15.9bn Crossrail project as a “scheme of national importance” and said it should go ahead with the scope unchanged given the significant private sector financing and ongoing efforts to reduce costs.
Upgrades to the London Underground network were also earmarked as critical. The CBI’s submission was
broadly welcomed by the Treasury, which said it endorsed the strategy of taking decisive action to deal with the deficit.
Treasury sources emphasised that chancellor George Osborne had already given an assurance that there would be no further cuts to capital spending beyond those announced by the previous Labour government.
Speaking at an event at the Liberal Democrat party conference this week business secretary Vince Cable said the Government realised it would have to use private investment to plug the funding gap for transport projects.
He added that the proposed Green Investment Bank must provide a vehicle for leveraging private investment, but said it couldn’t do ‘everything’ and would act as a model for future funding schemes.
The latest survey of MPs conducted by the British Chambers of Commerce, published this week, showed the Coalition parties disagreed widely on infrastructure spending.
Of the Liberal Democrat MPs surveyed, 70 per cent want spending on infrastructure to rise or remain constant in real terms, while only 27 per cent of Conservatives agreed.