A bleak outlook

The days are getting darker for civil engineering contractors. The axe has been taken to the roads programme and £6 billion of potential contracts have now been reduced to a mere £1.4 billion. And, as we reported last week, light rail schemes will not be considered a priority for Government funding, and major rail work is already shared by a select group of contractors - no room for outsiders.

Although the £6 billion Tory figure was almost universally accepted as impossibly optimistic, it is little wonder that some major civils contractors have held emergency board meetings to discuss just what they are going to do now. The outlook is not good.

Whilst the emphasis over the past couple of years has been on maintaining the existing road network, even maintenance contracts now look like they are going to be thin on the ground.

Just as the integrated transport White Paper turned over key decisions to local authorities, so does the DETR's roads review. Responsibility for trunk roads in London will be transferred to the proposed Greater London Authority.

This raises the prospect of years of confusion until political wrangling produces integrated transport proposals which are practicable. Local councils are not known for their efficiency, and the Government has already been dragging its feet over the GLA in the hope that it can erode Ken Livingstone's popularity.

Even the go-ahead for the M25 widening is purely a sticking-plaster decision, as the wider concerns of traffic congestion on the motorway and how to integrate it with other modes of transport is to be subject to a study which is expected to take two years to complete. Add to this a slowdown in the economy, which is likely to impact on the buoyant commercial building sector, and the outlook for construction suddenly seems bleaker than it did a week ago.