Contractors are being told to gear up for a massive investment in the UK鈥檚 road network. Once the Cinderella聽of infrastructure, can roads now compete for funding with the same success as the rail network?
In summer 2013 transport secretary Patrick McLoughlin announced what he called 鈥榓 transformational investment in our road network鈥� with 拢12bn for road maintenance and a trebling of investment in major road schemes, including the addition of over 400 extra lane-miles of capacity, resurfacing 80% of the strategic road聽network and upgrading our most important 鈥楢鈥� roads.聽 And in February 2014, at the Highways Supply Chain Summit, roads minister Robert Goodwill called on Britain鈥檚 road building companies to get ready for a massive increase in work ahead of the biggest investment in the road network since the 1970s, saying that the government is tripling funding on roads over the next eight years.
But the industry has seen the road building and maintenance budget shrink massively over the past few years. And it has also seen promised road-building programmes dwindle to nothing 鈥� most dramatically with the ill-fated Roads for Prosperity programme (see panel opposite).聽 As recently as 2011 the Autumn Statement contained 拢5.5bn of capital investment and 拢10bn of private investment for infrastructure and only 10% of that investment was actually realised, according to Noble Francis, economics director of the Construction Products Association.
But this time, he says, it is different and this programme of investment is not just a pre-election boost to the 聽economy. 鈥淭his is far too long-term to be political and the government is trying to be as clear as it can about what it is trying to achieve,鈥� he argues. 鈥淲hat is good about this initiative is that government has worked with the 聽industry to find out what it needs to be confident that this investment will take place 鈥� precisely because of the number of times that governments have made ambitious announcements and nothing has happened on the ground.鈥� But it is not just the consultation and clarity that has impressed the industry. In a year鈥檚 time the Highways Agency will become a publicly owned company operating on similar lines to Network Rail 鈥� and that is seen as being the touchstone of the government鈥檚 integrity in delivering the promised funding.
Under the proposals published in July 2013, the Department for Transport will assume total control of policy with the Agency being charged with implementing it. The theory behind the move is that turning the Agency into a company will enable it to be 鈥渕ore nimble鈥� than it has been in the past, allowing it to compete for the best talent in the job market.
As a publicly-owned company, the new body will be given six-year funding certainty for capital projects and maintenance. A major commitment from the Government is that both the funding and reform will be reinforced by legislation so that no future government can back away from these commitments.聽
This, it says, should provide the construction and maintenance industry all the reassurance needed to recruit and train skilled workers to deliver an increase in transport projects. The Government is also expecting to make savings, estimating that the reforms could save 拢600m. 聽Introducing the changes to the way in which road building and maintenance is commissioned, the government said that it would establish a legal framework to guarantee investment through a roads investment strategy. It pointed to the success of Network Rail in owning, operating and maintaining the railway infrastructure.
The industry welcomed the initiative with a chorus of relief and approval. Francis spoke for many, saying: 鈥淎 lot of investment has been stop-start with no clarity in the medium term.鈥� His organisation, the Construction Products Association, is also part of the Infrastructure Alliance together with the Institution of Civil Engineers (ICE), the Association for Consultancy & Engineering (ACE), and the Civil Engineering Contractors Association (CECA).聽 He points out that members of the CPA cannot plan to supply the materials required for road construction without some confidence in the government鈥檚 long-term plans. 鈥淢ost of the major companies are global multinationals so the investment decisions are made at global level and far in advance,鈥� he commented.
But that certainty in the longer term depends on the government delivering on its promise to reform the Highways聽Agency, points out CECA chief executive Alasdair Reisner.
鈥淚f the bill to change the status of the Highways Agency goes through then we can have great confidence in the five year funding settlement which聽will enable the industry to plan for the long term,鈥� he says. Reisner looks forward to roads becoming like the rail聽sector, where the regulator could theoretically step in to demand changes to the programme of聽investment but, in practical and political terms, it is very unlikely.
Early press reaction to the reform聽focused on the potential for the staff of the new body to be rewarded through bonuses for exceptional聽performance, although such payments would be subject to independent monitoring of the new company鈥檚聽performance. Possible safeguards could include setting up a drivers鈥� champion to operate on similar lines to Passenger Focus, which acts as a consumer watchdog for the rail and bus industry, or the establishment of an economic regulator, similar to OFWAT, to scrutinise performance.
At the same time, though, the聽government announced that it wanted to tackle some of the most notorious聽and long-standing road hot spots in the country 鈥� and that the Highways Agency, initially through feasibility studies, was to look at problems and identify potential schemes.
The locations identified are:
- A303/A30/A358 corridor
- A1 north of Newcastle
- A1 Newcastle-Gateshead Western Bypass
- A27 corridor (including Arundel and Worthing)
- Trans-Pennine routes
- A47 corridor between Peterborough and Great Yarmouth
Industry reaction to this is ambivalent.聽 On the one hand it is seen as further evidence of the government鈥檚 commitment to investment in the country鈥檚 infrastructure. 鈥淭hey can鈥檛 detail all their spending plans as that would be too difficult but they are giving some indication of their long-term plans,鈥� comments Francis.
But others worry that the Highways Agency is actually in danger of being overburdened. 鈥淭he agency is facing a challenge in dealing with an upturn in activity compared to the last few years while also preparing feasibility studies for schemes in the long term and also preparing for a changing role,鈥� notes Andrew Hugill, director of policy and technical affairs for the Chartered Institute of Highways and Transportation (CIHT).
Or as David Weeks, director of the Asphalt Industry Alliance, puts it: 鈥淚 fear that if they [the Highways Agency]聽are worried about the structure and the organisation itself they will take their eye off the ball and the existing聽motorway network might suffer.鈥�
The earliest signs, though, are that the Highways Agency is both capable聽and committed in adhering to the schedule. Just last month it issued its shortlist of contractors for its new-style聽collaborative delivery framework. It invited tenders from shortlisted bidders in March that should be returned by聽late May. The HA is aiming to use the new framework for between 拢4bn-and 拢5bn-worth of schemes over the next four to six years.
The framework is intended to establish closer working ties with designers and Agency officials while boosting the capability of small and medium sized contractors by increasing the upper threshold on the two lower value construction lots over the life of the project. This, the Agency says, will enable suppliers to bid for bigger jobs as their skills and capabilities develop, allowing them to compete with established major contractors.
Highways Agency procurement and commercial director David Poole said: 鈥淭he collaborative delivery framework is emblematic of the way the Highways Agency wants to do business 鈥� working collaboratively to innovate and deliver more for less while building capability across the whole industry. It is also proof of the Agency gearing up for the biggest increase in roads investment since the 1970s. I鈥檝e been hugely encouraged by the engagement we have seen in the process so far, and this is reflected in the number and variety of the suppliers shortlisted.鈥�
The schemes involved include projects such as the A14 Cambridge to聽Huntingdon, together with managed motorways, motorway widening, junctions, bypass schemes, asset renewal聽works and pinch points. The framework award is expected to be made in the autumn, which will be another important step to reassuring the industry that the promised schemes will actually occur.聽
But the most important event is for the legislation that will transform the Highways Agency to be passed in this parliament, as Reisner points out.
鈥淚f this legislation doesn鈥檛 happen in this parliament then it will destroy any certainty that civil engineering industry might have had in the roads programme. While we believe that this is the right way聽to proceed and that there is broad, cross-party support, a new government would have its own priorities鈥� he concludes.
Projects in the pipeline
The 2013 spending round confirmed 26 major road schemes to start in this parliament and committed funding to start a further 26 schemes in the next parliament, subject to value-for-money and deliverability.
Schemes underway:
- M62 Junctions 25-30. Spending Round 2010 scheme now open to traffic
- A23 Handcross鈥揥arninglid
- M4 Junctions 19-20 and M5 Junctions 15-17. SR10 scheme now open to traffic
- M6 Junctions 5-8
- A11 Fiveways-Thetford
- A453 Widening (M1 junction 24 to A52 Nottingham)
- M25 Junctions 23-27
- M25 Junctions 5-6/7
- M6 Junctions 10a-13
- M1 Junctions 39-42
- A14 Kettering Bypass
- M1/M6 Junction 19 Improvement
- A45/A46 Tollbar End
Schemes to start before 2015:
- M1 Junctions 28-31
- M1 Junctions 32-35a
- M3 Junctions 2-4a
- A1 Leeming to Barton
- M60 Junctions 8-12
- M60 Junctions 12-15
- M62 Junctions 18-20
- A1 Lobley Hill [NB. Dec 2013 investment announcement confirmed the length of this scheme would be extended.]
- A556 Knutsford-Bowdon
- A5-M1 Link Road
- M25 Junction 30/A13
- A30 Temple to Carblake
- A160/A180 Immingham
Who gets the work: the collaborative delivery framework shortlist
Lot 1 is for professional design聽and engineering services:
- AecomECOM
- Amey OW
- Arup
- Atkins
- Capita Symonds 鈥� Design & Infrastructure / Ramboll UK JV
- CH2M Hill
- Hyder Consulting (UK)
- Jacobs Engineering UK
- Mott MacDonald / Grontmij JV
- Mouchel
- Pell Frischmann Consulting Engineers
- Royal HaskoningDHV
- RPS Group
- URS Infrastructure & Environment (UK)
- Waterman Transport & Development / Tony Gee & Partners/ WYG Engineering JV (part of W2G Highways consortium)
- WSP Civils / Parsons Brinkerhoff JV
Lot 2 is for medium-value construction works with scheme values of up to 拢25m that might be increased up to 拢50m:
- EM Highway Services
- VolkerFitzpatrick
- McLaughlin & Harvey
- John Graham Construction
- Interserve Construction
- Amey LG
- Alun Griffiths (Contractors)
- Geoffrey Osborne
- Galliford Try Infrastructure
Lot 3a is for high-value construction works with scheme values from 拢25m up to an initial value of 拢100m which may be increased up to 拢300m:
- Galliford Try Infrastructure
- BAM Nuttall / Morgan Sindall JV
- Hochtief (UK) Construction
- John Sisk & Son / Lagan Construction JV
- Kier Construction
- Vinci Construction UK (trading as Taylor Woodrow)/Vinci Construction Grands Projets JV
- Laing O鈥橰ourke Construction
- Amey LG
- Carillion Construction
- Costain
- Skanska Construction UK
Lot 3b is for high-value construction works with scheme values of between 拢100m and 拢450m.
- Balfour Beatty Civil Engineering
- BAM Nuttall / Morgan Sindall JV
- Bouygues TP
- Carillion Construction
- Costain
- Skanska Construction UK
- Laing O鈥橰ourke Construction
Roads for prosperity
Scepticism over the delivery of any large road-building programme is founded on the industry鈥檚 experience of the 1989 White Paper, Roads for Prosperity, which announced a greatly expanded motorway and trunk road programme to relieve congestion on major roads between towns and cities.
It emphasised reducing inter-urban聽congestion and prioritised meeting the needs of industry and of other road users for a modern strategic road network.聽
The new roads were met with huge opposition and there were mass protests against individual schemes 鈥� a point that bruised many of the politicians involved. The Tory transport minister in 1992,聽Steven Norris, commented: 鈥淚 鈥aw first-hand the difficulty in implementing the Roads for Prosperity programme. Such was the opposition and cost, three-quarters of the plans never got off the drawing board鈥� 聽Experience tells us that a massive programme of road building won鈥檛 solve these problems [of economic inertia, congested roads and housing shortages].鈥�
Within five years the road-building programme was hacked back wholesale:
- 11 schemes were reviewed for smaller-scale improvements;
- eight transferred to the network enhancement programme;
- 104 were placed in the longer-term programme; and
- 77 schemes were withdrawn (including most of the 67 schemes placed in the 鈥榣onger-term鈥� programme in 1994).
This was the last ever example of the transport planning orthodoxy that had dominated planning from the late 1950s onwards, the so-called 鈥榩redict and provide鈥� model in which future traffic was forecast and then the road space built to accommodate it.
A Standard Note lodged in the House of Commons Library entitled Roads: highway infrastructure drily comments:聽鈥淨uite apart from the environmental objections, funding from the public purse is strictly limited and it would be impossible to build roads to cope with the projected increase in the volume of cars forecast.鈥�
This article first appeared in the April 2014 issue of 海角社区app magazine, which can be viewed in full at:
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