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Highways Agency moves to reassure contractors

The Highways Agency has moved to reassure construction chiefs over its long-term plans after the value of roads work dipped below rail for the first time on record.

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The agency has invited major contractors in to discuss the recent Cook Review, which recommended that the government publishes a five-year forward work pipeline of agency spending.

The invitation follows the latest Office for National Statistics figures, which showed the value of construction output in rail outstripped road spending for the first time on record.

Senior figures at the agency have already held talks with representatives of major contractors such as Morgan Sindall and Balfour Beatty and chief executives including Andrew Wyllie of Costain.

One source close to the meetings told Construction News the government is expected to give the green light to the work pipeline, which would supplement the infrastructure and construction pipelines published as part of the Chancellor’s autumn statement.

The source said: “This would be a momentous decision for the sector and the work being done with the agency. There is a general feeling that roads needs to emulate sectors such as utilities or rail where there is a clear forward pipeline of work and contractors can act accordingly.”

The government is expected to respond to the Cook Review shortly. Its recommendations included a call for the government to publish a long-term strategy within six months of its initial response to the report.

The most recent ONS figures showed that rail spending reached £1.04 billion in the third quarter of 2011, while spending on roads was £979 million in the same period.

However, the Department for Transport’s award last month of £586m in funding towards 21 local authority transport schemes is expected to see several highways contracts come to the market in the next six months. Of the 21 projects, 18 were roads, bridges and highways.

The £117m New Wear Crossing in Sunderland is expected to be among the first to complete procurement.

A shortlist is expected to be announced this month for the project, with major contractors expected to line up to win the work; construction is set to start this year.

Sunderland City Council leader Paul Watson said: “The investment in a strategic infrastructure scheme will open up regeneration sites along the River Wear and bring forward investment to Sunderland.

“We see this project as an integral part of Sunderland’s ongoing regeneration, as it can help create thousands of new jobs by improving links between the A19, the city centre and the Port of Sunderland.”

More than 50 contractors attended an open meeting in March last year to hear about the potential scheme.

A final barrier to the project is the outcome of compulsory purchase orders attached to the project following a public inquiry in June 2011, after which contracts can be awarded.

In the rail sector, the government is also expected to publish a Rail Command Paper setting out how it hopes to achieve the required efficiencies identified in Sir Roy McNulty’s Rail Value for Money report within the next six weeks.

The DfT and Transport Scotland will publish their output specifications and outline available funding for 2014-19 in July in response to the rail industry’s Initial Industry Plan for Control Period 5.

 

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