M25 widening faces Olympian challenge

The Highways Agency (HA) has been advised to delay the roll-out of its 30-year, £4.5bn M25 widening DBFO for up to two years due to concerns over resources, rising construction costs and the threat of disruption from new powers granted to the Olympic Delivery Authority (ODA) during the delivery of infrastructure for the Games.

The recommendation was made in a report produced for the HA by Orman Risk Analysts, as part of the Halcrow consultancy framework, which looked into what impact the delivery of the 2012 Olympic Games will have on delivering the department’s largest ever roads contract.

The report claims to be the most comprehensive to date in painting a scenario of extra construction activity in the run-up to the Games. This is due to the fact that it has taken into account a resurgent private commercial market and has included all the schemes to be delivered in the capital, as outlined in London’s bid document to the International Olympic Committee.

The HA has already chosen its prequalified bidders for the scheme. However, in the report’s recommendations, it states that it “would appear sensible to delay the M25 DBFO by, say, two years, by which time the [construction] boom would have dissipated”; most of the £1.5bn construction element of the contract will start in 2009 – the peak of construction activity for the Olympics.

The report adds: “Tenderers will be pricing their bids in mid- to late-2007, which coincides with the upswing of [Olympics] work. These uncertainties make it very difficult for tenderers to estimate future costs with confidence.”

It also warns that the demand for concrete, which makes up for 2,459 cubic metres of the scheme’s ready mixed quota, may prove more difficult because of high local demand, especially as some aggregate suppliers have not factored in the rising private commercial sector or the DBFO when looking at supply resources around 2009.

The report raises concerns over the new powers given to the ODA, which mean it could restrict supplies to projects that are draining supplies from delivering the Olympics infrastructure on time.

It adds that the DfT (Department for Transport) and the HA should keep in close touch with the political process to ensure “no powers are given to the ODA which could adversely affect the M25 DBFO or its (chosen) contractor”.

The HA said: “The Highways Agency will be taking the 2012 Olympics into consideration when planning the work. We always recognised that winning the 2012 Olympics bid would have an impact.

“In the light of the successful bid, we have decided that the widening works (including any associated traffic management measures) will be suspended for the period that the Olympic village is open. We are working with other government departments, Transport for London and other agencies to meet the requirements of the Olympics.”

Look out for a detailed examination of the Olympics report and its implications in next week’s CJ.

Find out more about construction in the run-up to 2012 at the Contract Journal conference, Building for London, to be held at Lord’s Cricket Ground, London on 28 June. For more details email vicky.weyman@rbi.co.uk, or visit www.buildingforlondon.co.uk.