Friday, December 9, 2022

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National Highways projects are costing billions more than planned

Improvements to England’s motorways and major A-roads will cost billions of pounds more than planned, a report says.

Public spending watchdog the National Audit Office (NAO) said delays and inflation mean state-owned National Highways will be unable to complete dozens of projects on budget.

The report warned that projects under the Second Road Investment Strategy (RIS2) due to take place between April 2020 and March 2025 will cost an estimated £3.3 billion more than planned to complete.

It also said projects under construction over the following five years are expected to be £6bn higher than previous estimates, although that includes some of the plans included in the £3.3bn figure.

About 33 programs are between one month and more than three years behind schedule, with an average delay of 12 months.

“This will leave road users with an underperforming road network for longer,” the report warned.

Delays were caused by factors such as the coronavirus pandemic and difficulties in obtaining planning permission.

National Highways has received a total of £14.1 billion from the Department for Transport (DfT) for 69 improvement programs in RIS2.

It completed less work and higher costs than expected, the NAO said.

Projects in RIS2 include the construction of a double carriage and tunnel near Stonehenge, Wiltshire and the Lower Thames Crossing between Kent and Essex.

Both have not received planning permission.

Last year the budget for improvements was cut by £3.4 billion and the number of projects reduced to 58 when it became clear that National Highways could not deliver on the delivery schedule as planned.

The NAO also noted that National Highways has already allocated its entire £1.16 billion RIS2 emergency budget.

Gareth Davies, head of the NAO, said it was “regrettable” that the road investment plan developed by the DfT and National Highways coincided with the coronavirus pandemic and rising inflation, but “more could have been done to manage risks”. .

He continued, “Project delays have resulted in less work being delivered than planned and at a higher cost.

“DfT and National Highways must now fully address the rising costs of their revised project portfolio and conduct a review of any road plans they intend to move into their third road strategy period (2025-2030).

“This review needs to consider whether these projects remain viable and offer optimal value for money.”

National Highways chief executive Nick Harris said “external factors” have had a “significant impact on our ability to execute this complex program.”

He continued, “Despite these challenges, we have successfully obtained approval to undertake several large infrastructure developments.

“We are confident that we are managing portfolio and project risks well, but we also know that there is always room for improvement as we mature our processes for RIS3.”

A DfT spokesman said RIS2 is “transforming our road network” and that a “minority of projects” will be delivered later than originally proposed.

He added: “We have committed £24billion to ensure we have a road network that is safe, reliable, environmentally responsible and good value for the taxpayer.”

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