2011 M25 costs

M25 widening, UK  (source)

The M25 widening scheme has faced a barrage of criticism due to its higher than necessary costs and failure to properly assess the alternative option of using the hard shoulder as an extra lane during peak hours. The UK House of Commons Public Accounts Committee has estimated that the potential extra cost to the taxpayer has amounted to around GBP 1 billion (EUR 1.2 billion).

In May 2009, the UK Highways Agency signed a 30-year private finance contract worth GBP 3.4 billion (EUR 4.25 billion) with the Connect Plus consortium for widening two sections of the M25 motorway, and maintaining the entire 125 mile length of the road and 125 miles of connecting roads and motorways. The project was partly financed with a EUR 453 million loan from the European Investment Bank.

Connect Plus consists of Balfour Beatty, Skanska, Atkins and Egis Projects. Both Balfour Beatty and Atkins are part of the Metronet consortium which went into administration in July 2007 after its disastrous performance in the London Underground PPP.

Key issues:

  • poor project planning (failure to properly consider cheaper public sector alternative)
  • delayed project preparation and high preparation costs
  • questionable effectiveness in easing congestion
  • potential conflict of interest

When the House of Commons Public Accounts Committee undertook its examination of the project, it found that the Senior Responsible Owner at the Highways Agency had left the Agency and was employed by one of the project’s major contractors and investors.
The company had previously provided advice on the project and was at the time of the inquiry owned by one of the project’s major contractors and investors.
A condition of his new employment is that he works on rail rather than road projects, but it is not clear what procedures are in place to make sure that this commitment is honoured. Cabinet Office clearance was obtained for this move but there remain potential conflicts of interest.

House of Committee of Public Accounts Report – 651 M25 Private Finance Contract 2011

Bankwatch.org case study – PPP-case-M25

Page 19 of the House of Committee of Public Accounts Report advises:

Q22 Chair: Good morning, everybody. Thank you very much for returning, Graham Dalton, Martin Capstick and Ginny Clarke, and our apologies that we had to abandon the last hearing on this issue. I just want to ask a question. One of the continuing themes in this Committee is the failure to get the senior responsible officer to come and explain his or her actions. In this instance, it is Ian Scholey. Can you just explain to me why he can’t come?

Graham Dalton: Chair, Ian Scholey was employed at the Highways Agency until the time we closed this deal. He is not actually in the employment of the agency now.

Q25 Chair: And is it true that he now works for one of the advisers?

Graham Dalton: He works for Parsons Brinckerhoff, which was an independent company working for us as an adviser at the time. He is now working on rail activities and rail schemes, not on highways.

Q26 Chair: So he has left this awful project and gone to work for one of the advisers advising the Department for Transport?
Graham Dalton: He left the Highways Agency when the project was completed, for career reasons. He is a professional—

Q27 Chair: For what reasons?

Graham Dalton: Career reasons. And he works for Parsons Brinckerhoff on rail schemes—

Chair: I don’t know if I would have given him a job after this one, but never mind.[Laughter.]Go on.

Graham Dalton: He had the opportunity to work on large projects and at the Highways Agency had the opportunity to do this transaction. He came from railways into highways and he has gone back to work on rail schemes.

Q28 Joseph Johnson: Was he a manager there?

Graham Dalton: No.

Q29 Stephen Barclay: Do most people leave jobs for career reasons?

Graham Dalton: He’s a major projects professional and wanted to go back into rail on major project schemes.

Mr Scholey’s Linkedin profile appears to be at https://uk.linkedin.com/in/ianscholey and records his employment history as:

Divisional Director, Major Projects
Highways Agency
2004 – 2009 (5 years)
Responsible for development and implementation of the £6.2bn M25 DBFO Contract to widen and then operate and maintain the M25 motorway for 30 years. Also responsible for 90 staff working on other major roads schemes, including widening of the M25 between Junctions 12 and 15, widening of the M1 between Junctions 6A and 10, and various bypass and climbing lane projects in the Midlands and South West of England.

Business Development Director
Balfour Beatty Capital
January 2010 – November 2012 (2 years 11 months)London, United Kingdom
Director responsible for bidding a number of PPP/PFI road and rail projects in UK, Ireland, Europe and the US. Bid Director for the Balfour Beatty, Bouygues and Egis consortium bidding the £600m Mersey Gateway project*.

Development Director, Transportation
Balfour Beatty Investments
November 2012 – January 2014 (1 year 3 months)London, United Kingdom
Bid Director for the Balfour Beatty, Bouygues and Egis consortium bidding the £600m Mersey Gateway project*. Also involved in progressing Balfour Beatty’s proposals to develop and bid High Speed 2 and other transport projects both in the UK and abroad.

Business Development Director, Major Projects
Balfour Beatty
January 2014 – Present (1 year 9 months)Wilton Road, London
Responsible for leading the pursuit of opportunities for the Balfour Beatty VINCI JV on the HS2 project.

*Mersey Gateway Project on 7 May 2014. In autumn 2017 a new six lane toll bridge over the Mersey between the towns of Runcorn and Widnes will open to relieve the congested and ageing Silver Jubilee Bridge.