Area 9 Claims – Routine Systematic Exaggeration

The ‘secret’ equation revealed …

Area 9 Claims – Following a motorway collision, fire or fluid spill, who receives and is expected to pay Kier Highways Ltd’s (KHL) bill for repair of the ‘Damage to Crown Property’ (DCP) is generally dictated by the cost:

  1. if above £10,000, Highways England Company Ltd (HE) is billed by KHL, pays the invoice then seeks recovery from the Third Party; a driver, fleet or insurer
  2. if below £10,000 the contractor is not paid by HE but pursues the Third Party for the monies.

There is an equation for determining the MAXIMUM a Third Party is to be charged but this has been kept from the Third Parties it should protect.  The calculation has not been complied with since commencement of the contract 01/07/2014. To this day, the calculation is secret; not disclosed by HE or KHL. Simply put the calculation is:

cost (£) + uplift (%) = maximum charge

More detail is supplied in the associated pages (see below).

However, the figures to be used in the equation have also been withheld – possibly because KHL and the Authority are aware they are not being used, that it was never intended for them to be used?

Therefore, even if you knew the equation, you could not complete it.  It has been claimed by HE that the rates a Third Party need to check KHL and the Authority is pricing correctly are ‘commercially sensitive’.  Therefore, whilst HE possesses of the rates and can confirm they are being charged properly before making payment, a Third Party cannot.

But, we now have some rates – in early 2016, HE’s general counsel Tim Reardon wrote that KHL’s rate to HE initial attendance operatives (AIW’s – Asset Incident Watchmen) was £70.32 / hour. But this did not accord with the bills we saw ‘above threshold’ (‘1’ above). We made a freedom of information request for the rates and eventually the Information Commissioner’s Office.  In May 2018, the costs were provided by HL.  It is evident HE is paying less than £30 / hour.

Since 01/07/2014, KHL has routinely overcharged Third Parties.  It appears Highways England have assisted this to occur either negligently or intentionally.

For a better understanding of the time-line, the difficulties encountered, the process, equation and rates, please click here.

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