M25 project mishandled - report

MPs have blamed the Highways Agency for mishandling a project to widen Britain's busiest motorway in a bid to combat congestion.

The mishandling of the M25 scheme could cost the taxpayer as much as £1 billion extra, according to a report from the House of Commons Public Accounts Committee.

It described the agency's cost estimates for a £3.4 billion private finance contract for road-widening as "poor".

Public Accounts Committee chairman Margaret Hodge MP said: "The Highways Agency's mishandling of the project to tackle congestion on the M25 could cost the taxpayer an extra £1 billion.

"The agency should not have focused just on widening but also have given proper consideration to a much cheaper alternative, hard shoulder running. A private finance project intended to transfer risk to the private sector should not have restricted innovation by ruling out this alternative solution.

"The decision to stick with widening was also substantially influenced by a technical error in the agency's cost estimates. Had the error not been made, HSR would have been shown to be the cheaper option."

She added: "The costs of the widening project have also been driven up by the nine years it took to conduct the procurement process, from the first commissioning of consultants in 2000 to the signing of the private finance contract in May 2009.

"This delay exposed the project to the credit crisis, resulting in £660 million of extra financing costs. And the advisers upon whom the agency spent an excessive £80 million would have benefited from the drawn-out procurement."

Roads minister Mike Penning said: "This Government is driven by the need to get value for money for taxpayers so I welcome this report. It is another example of Labour costing taxpayers dearly.

"I am determined to learn the lessons of the report and we will act on its recommendations."

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