Unexplained Rates

Are you a driver, fleet or insurer presented with a bill from Kier Highways Ltd, formerly EM Highway Services Ltd?

You will likely have been presented a Cost Breakdown Document ‘spreadsheet’ displaying a yellow, green and blue section.  As an example of the excessive charging, review the yellow section which deals with the ‘Initial Incident’, the charges displayed will likely include:

AIW’s attending incident (Emergency Response) source CMA ref. R06B037:

  • ER01 AIW staff £70.32 / hour
  • AIW vehicle £35.53 / hour

These charges are being applied to 2013 forward incidents.  Do they appear reasonable?

In mid-2015, Highways England (HE) were being charged very different rates for the very same staff, source CMA ref. T04B031:

  • ER01 AIW staff £22.73 / hour + 7.38% fee mark-up of £1.68 = £24.41 / hour
  • AIW vehicle £14.12 / hour + 7.38% fee mark-up of £1.04 = £15.16 / hour

The same staff, the same vehicle, doing the same job … but charged to you at more than twice the sum presented to Highways England, the Public Authority that put KHL in this privileged, unchallenged position of trust.

And how is the AIW staff charge rate of £70.32 / hour made up?  If you ask Kier they can provide a detailed breakdown:

  1. £18.30              Wages & Salary
  2. £7.38                Bonus & Incentives
  3. £0.01                specialist allowances
  4. £0.96                absence due to sickness and holiday
  5. £0.09                Travel
  6. £0.01                relocation
  7. £0.03                medical examinations
  8. £6.52                Protective clothing
  9. £3.85                N.I.
  10. £0.17                meeting legal requirements
  11. £1.26                pensions and life assurance
  12. £9.82                general training
  13. £0.52                Safety training
  14. £0.03                Water
  15. £0.02                Gas
  16. £0.18                electricity
  17. £9.17                consumables for vehicle
    £58.32              sub total
  18. £12                   20.58%  contractual overhead fee

£70.32              total

We spoke to a representative of KHL about the ’20.58%’ understanding that this was the person progressing and presenting the new, KHL board-led, pricing initiative.  However, it became apparent they could not explain it.  One fifth of the hourly rate charge (20.58%), comprises an enhancement that is currently incapable of being defined by KHL.

The KHL representative referred to the 20.58% as an ‘overhead fee’, it was a contractual ‘thing’ but she appeared not to know of the contract from which it originated or how it could be inflicted upon drivers, fleets or insurers who were not party to it, had not agreed the rate.

It appeared the KHL representative believed HE allowed this overhead to be charged out to other people.  However, they could only ‘suppose’ it would ‘take into account some of the recovery element’ but added that it is ‘a percentage uplift that is named in our contract that we are allowed to use and we are entitled to use’.  The representative had a ‘feeling’ that ‘probably’ KHL were allowed to use it to ‘take into account a lot of the unidentified stuff’.

This was far from reassuring … and relates to just one aspect of the breakdown.