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Rethink on project bank accounts

The Highways Agency has admitted it is having second thoughts about using project bank accounts on all of its new contracts.

Last December, the group’s chief executive Archie Robertson, who helped draw up the National Specialist Contractors Council’s fair payment charter, said project bank accounts - where money is paid into a single account and allows contractors to be paid as soon as a firm’s work is signed off - would be used on new contracts from 1 January.

But the agency has scaled back that intention and said it is now looking at its upcoming schemes to identify a job where a project bank account can be trialled.

An agency spokesman said: “We are actively reviewing our forward programme of projects to identify a trial where project bank accounts are considered the most beneficial. They are one of a number of possible approaches to put into practice the fair payment principles.”

Mr Robertson said the agency would be using the NSCC’s charter as a model for tougher fair payment practices from the beginning of this year.

The agency spokesman said: “Our suppliers are aware of the fair payment charter, which we have now signed. We will be working with them towards meeting the principles of the charter.”

But in a blow for specialists’ groups, the spokesman added it had still not made up its mind about whether it would definitely use project bank accounts on all its jobs in the future.

He said: “We are committed to implementing the charter and will be investigating the use of project bank accounts and the benefits they could bring to the agency and our supply chain before making a decision on wholesale adoption.”

Elsewhere, it has emerged that project costs are continuing to rise, with a £1.1 billion gap identified on a further seven Highways Agency projects. This is despite recent promises from the transport secretary Ruth Kelly that measures had been taken to ensure more accurate price estimation.

The greatest increase was seen on the A14 from Ellington to Fen Ditton upgrade in Cambridgeshire - which was awarded to a Costain/Skanska joint venture earlier this year.

Original estimates priced the job at £490 million but the agency admitted that costs have almost doubled to £944 million.

Rising road costs

  • A14 from Ellington to Fen Ditton has risen from £490 million to £944 million

  • M1 widening J10-13 has risen from £382 million to £601 million

  • A5-M1 Dunstable bypass has risen from £48 million to £124 million

  • Increases of £386 million have been seen on three M25 widening schemes

Source: Department for Transport