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The Project Control Framework
This framework sets out how we, together with the Department for Transport, manage and deliver major road improvement projects.
2006 Parliamentary Questions
2006
Question 08/11/06 - Chris Grayling: To ask the Secretary of State for Transport what the estimated construction cost is of the (a) M25 and (b) M1 widening Design Build Finance and Operate contracts; what the expected total cost of each contract is to public funds; and by what year all such costs are expected to have been paid in each case. [99134]
Dr. Ladyman: On current assumptions of scope, design, operation and inflation, both widening schemes have an approximate capital estimate of £2 billion, but this is subject to change as the full details of the schemes are finalised.
Question 05/12/06 - Mr. Carmichael: To ask the Secretary of State for Transport what the total construction cost was of each Design, Build, Finance and Operate road; what the expected total cost of each contract is to public funds; and by what year all such costs are expected to have been paid in each case. [102405]
Dr. Ladyman: The construction cost of a Design, Build, Finance and Operate (DBFO) contract is the responsibility of the DBFO company. This is an important part of the risk transfer in this type of project, which gives the Department cost certainty in relation to construction costs. However, the Department and the Highways Agency monitor trends in road construction costs and take account of them in planning the forward programme.
Unlike conventional road improvement contracts, the costs associated with DBFO contracts are not just for the construction work but also cover the maintenance and management of the associated road network over a typical period of 30 years. The actual cost of construction is a matter for each DBFO Company.
Question 05/12/06 - Chris Grayling: To ask the Secretary of State for Transport what the total construction cost was of each Design, Build, Finance and Operate road; what the expected total cost of each contract is to public funds; and by what year all such costs are expected to have been paid in each case. [104403]
Dr. Ladyman: The construction cost of a Design, Build, Finance and Operate (DBFO) contract is the responsibility of the DBFO Company. This is an important part of the risk transfer in this type of project, which gives the Department cost certainty in relation to construction costs. However, the Department and the Highways Agency monitor trends in road construction costs and take account of them in planning the forward programme.
Unlike conventional road improvement contracts, the costs associated with DBFO contracts are not just for the construction work but also cover the maintenance and management of the associated road network over a typical period of thirty years. The actual cost of construction is a matter for each DBFO Company.
The following table gives the expected total cost of Unitary Charges for each contract and the year in which the payments end. These payments cover the cost of constructing the road improvements and also maintaining the road network covered by the contract over the contract period.
| Project | Expected total cost (£ million) | Year payments end |
|---|---|---|
| A1 Darrington to Dishforth | 1,161.072 | 2036 |
| A1 (M) Alconbury to Peterborough | 1,122.93 | 2026 |
| A19 Dishforth to Tyne Tunnel | 827.91 | 2027 |
| A249 Stockbury (M2) to Sheerness | 331.313 | 2034 |
| A30/A35 Exeter to Bere Regis | 569.28 | 2026 |
| A417/A419Swindonto Gloucester | 612.65 | 2026 |
| A50 Stoke to Derby | 234.54 | 2026 |
| A69 Carlisle to Newcastle | 295.47 | 2026 |
| M1-A1 Lofthouse to Bramham | 1,271.83 | 2026 |
| M40 Denham to Warwick | 1,128.36 | 2027 |
The Secretary of State has asked Mike Nichols, Chairman of the Nichols Group, to review the Highways Agency approach to cost estimating and project management, and to make recommendations, including on how the agency should best assess, monitor and report on risks to its costs estimates. He will report shortly.
Question 07/12/06 - Mr. Francois: To ask the Secretary of State for Transport what the total capital value is of each private finance initiative scheme overseen by his Department 7 Dec 2006 : Column 593W which has reached financial close; over what period repayments will take place; and what the total cost of repayment will be. [103517]
Gillian Merron: A table with estimated total capital value, contract duration and estimated total unitary charge payments for PFI projects overseen by the Department for Transport that have reached financial close has been placed in the Libraries of the House.
PFI capital values typically refer to the cost of constructing project assets. The cost information in the table is an estimate of these costs. They are estimated costs because it is a feature of PFI contracts that responsibility for construction risk is transferred to the Contractor. The final actual cost is the responsibility of the Contractor. The construction cost is an element of the unitary charge payment.
The total unitary charge is a projection that covers payment for both the construction cost and other costs that arise from delivering the service. These typically include the cost of maintenance, managing the service, operational activities over the duration of the contract. The estimated unitary charge may vary over the duration of a contract as it reflects changes in the indexation of payments, usage related payments, contract deductions and service changes.
Question 14/12/06 - Dr. Cable: To ask the Secretary of State for Transport how many private finance initiative and public-private partnership contracts with his Department and its agencies were won by Halliburton or its subsidiaries since 1997; what the terms were of each contract; and if he will make a statement. [101226]
Gillian Merron: The Highways Agency awarded the following PFI contracts to the Road Management Services consortium consisting of AMEC, Alfred McAlpine, Dragados and Halliburton.
| Name of contract | Date of award | Terms of contract |
|---|---|---|
| A1 Darrington to Dishforth | 2003 | HA Design, Build, Finance and Operate (DBFO) |
| A13 Thames Gateway | 2000(*) | HA Design, Build, Finance and Operate (DBFO) |
(*) The Highways Agency awarded the A13 contract on 2 April 2000, the contract was subsequently novated to Transport for London on 3 July 2000.
A DBFO briefing pack is available from the Highways Agency website (http://www.highways.gov.uk/roads/2748.aspx).
Question 19/12/06 - Mr. Hayes: To ask the Secretary of State for Transport what the total liability to his Department would be in circumstances of immediate termination of all (a) public/private partnerships and (b) public finance initiative contracts. [109301]
Gillian Merron: Voluntary termination of a PFI contract by the Secretary of State would result in compensation. The compensation would largely derive from loss of equity, outstanding senior and other debt and in respect of other outstanding liabilities of the PFI contractor to third parties. The calculation of these liabilities would vary from contract to contract.
PFI contracts may be terminated early for other reasons. This could include contractor default or force majeure. The contract terms that apply in these circumstances vary from those that would apply in the case of voluntary termination and are typically individually negotiated to reflect contract specific issues.
It is, therefore, not possible to calculate the Department's total PFI termination liability. The amount would vary from contract to contract, when the event occurred and may be subject to negotiation with the PFI contractor.
