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DBFO road scheme costs are twice those of public funding

DESIGN, build, finance and operate (DBFO) road schemes cost twice as much as publicly-funded contracts, a transport planning consultancy has claimed.

Keith Buchan, of the Metropolitan Transport Research Unit, was commissioned to carry out a detailed assessment of the costs of the DBFO A36 Salisbury bypass.

Mr Buchan concluded that the Salisbury contract originally estimated to cost 73 million would cost between 135 million and 169 million under a DBFO scheme.

He warned that the government should reassess its decision to put the scheme out to private sector funding, before paying twice what the scheme is worth.

But Mr Buchan admitted it was difficult to estimate the costs. His figures are based on a return of about 15 per cent for contractors to cover the risk, borrowing and profit elements of the contract.

He said: Each contract will be slightly different, according to how long it takes to build. But, in broad brush terms, DBFO projects have got to be around twice as expensive as publicly-funded schemes.

The study is believed to be the first independent survey of the costs of a DBFO project.

It was commissioned by lobby groups Transport 2000 and Wiltshire Friends of the Earth Network.

Mr Buchan warned the DBFO programme would be a major drain on future road funding.

He said: What happens is that the schemes reduce the governments capital costs for an initial period of two to three years. After that period, the government will quickly use up any capital roads budget it still has paying for DBFO projects.

But, he added, DBFO projects were less prone to cost overruns because contractors kept a closer eye on costs.