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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.
General briefing notes
Background
Design, build, finance and operate (DBFO) started life as a precursor and transition to motorway tolling, designed to create an operating industry which took a long-term commercial view and which might manage tolled motorways in the future. With this in mind, the Conservative Government announced in November 1992 that private-sector companies might be invited to bid for DBFO projects, with remuneration from the government according to usage.
The DBFO concept was included for consultation in 'Paying for Better Motorways: Issues for Discussion' (May 1993). A preliminary note on the principles applying to DBFO was published in April 1994. Welcomed by the City and industry, financial advisers Hambros/Pricewaterhouse then carried out a more intensive consultation on risks.
As a result of this consultation exercise, the DBFO form of contract was developed. In summary, the private sector, over the 30-year life of the contract, assumes responsibility for the operation and maintenance of a length of existing road (where appropriate) and the detailed design and construction of specified improvement schemes and their subsequent operation and maintenance. These responsibilities lead the private sector to focus on delivering whole-life cost efficiencies. DBFO has developed into a method of procurement worth pursuing in its own right as an alternative to other forms of procurement using conventional funding arrangements.
The first eight DBFO projects - Tranches 1 & 1A
Tranche 1
- A1(M) Alconbury to Peterborough
- M1-A1 Lofthouse to Bramham Link Road
- A417/A419 Swindon to Gloucester
- A69 Carlisle to Newcastle
Tranche 1A
- A19/A168 Dishforth to Tyne Tunnel
- A30/A35 Exeter to Bere Regis
- A50/A564 Stoke to Derby Link
- M40 Denham to Warwick
Contracts for the first eight DBFO projects were all awarded in 1996 (sometimes referred to as tranches 1 and 1A). These involve the private sector in managing about 600km or 5 per cent of the existing Highways Agency network and delivering 11 road improvement schemes with an estimated capital value in excess of £550m. Ten of the 11 schemes were completed and opened to traffic by Spring 1999, with the remaining scheme, the A30 Honiton to Exeter Improvement, opened in the Spring of 2000.
Reimbursement on these contracts is primarily by means of shadow tolls paid according to usage of the project road, plus bonus elements for safety enhancements and charges for lane closures and penalty points for not achieving set operating standards.
A1 Darrington to Dishforth DBFO Project
The A1 Darrington to Dishforth DBFO project contains two upgrading and widening schemes, with a capital value of about £245 million. Construction has been completed on this project.
A249 Stockbury (M2) to Sheerness DBFO Project
The A249 DBFO project contains three improvement schemes with a capital value of about £100 million. The contract was signed in February 2004.
M25 DBFO Project
The M25 DBFO project comprises the existing Area 5 network and Dartford Crossings - which together form the Project Road. Once let, a DBFO Company will assume responsibility for the operation and maintenance of the Project Road and a programme of capital works including the widening of up to approximately 102km of the existing M25, generally to dual 4 lane standard. The project is currently at the preferred bidder stage.
