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PPP IN HIGHWAYS WORKSHOP WASHINGTON – 3 APRIL 2006 RECENT DEVELOPMENTS IN PRIVATELY- FINANCED HIGHWAY PROJECTS IN THE UK

PPP IN HIGHWAYS WORKSHOP WASHINGTON – 3 APRIL 2006 RECENT DEVELOPMENTS IN PRIVATELY- FINANCED HIGHWAY PROJECTS IN THE UK by ALEC BRIGGS SENIOR PROJECT LEADER, HIGHWAYS AGENCY.

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PPP IN HIGHWAYS WORKSHOP WASHINGTON – 3 APRIL 2006 RECENT DEVELOPMENTS IN PRIVATELY- FINANCED HIGHWAY PROJECTS IN THE UK

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  1. PPP IN HIGHWAYS WORKSHOP WASHINGTON – 3 APRIL 2006 RECENT DEVELOPMENTS IN PRIVATELY- FINANCED HIGHWAY PROJECTS IN THE UK by ALEC BRIGGS SENIOR PROJECT LEADER, HIGHWAYS AGENCY

  2. THE ROLE OF THE HIGHWAYS AGENCYAn Executive Agency of the Department for TransportResponsible for operating, maintaining and improving the strategic road network in EnglandIn conjunction with the Highways Agency’s ‘Customer First’ initiative, its primary aims are to provide: • Safe Roads • Reliable Journeys • Real-Time Information for Travellers

  3. England’s Strategic Road NetworkComprises 8,000 km / 5000 milesof motorways and trunk roadsAsset valued at £72bnCarries a third of all traffic and two-thirds of freight trafficOver 170 bn vehicle-kilometres per annum

  4. Type MW TRW J B Total No. £ (bn) No. £ (bn) No. £ (bn) No. £ (bn) No. £ (bn) ECI 21 2.7 18 1.7 17 0.7 15 1.0 71 6.1 DBFO 7 3.4 1 0.1 0 0 0 0 8 3.5 D&B 3 0.5 9 0.3 5 0.1 17 0.6 34 1.5 Total 31 6.5 28 2.1 22 0.8 32 1.7 113 11.1 Categorisation of Major Improvement Projects in TPI (October 2005) Key: MW = Motorway Widening TRW = Trunk Road Widening J = Junction Improvements B = Bypasses

  5. Speeding-up Delivery

  6. DBFO PROJECTS AWARDED TO DATE • Tranche 1 Works Payment Contract • Cost Mechanism Award • A69 Newcastle to Carlisle £9.4m Shadow tolls Jan 1996 • A1(M) Alconbury to Peterborough £128m Shadow tolls Feb 1996 • A417/A419 Swindon to Gloucester £49m Shadow tolls Feb 1996 • M1-A1 Motorway Link, Leeds £214m Shadow tolls Mar 1996 • Tranche 1A • A50/A564 Stoke to Derby Link £20.6m Shadow tolls May 1996 • A30/A35 Exeter to Bere Regis £75.7m Shadow tolls July 1996 • M40 junctions 1-15 £37.1m Shadow tolls Oct 1996 • A168/A19 Dishforth to Tyne Tunnel £29.4m Shadow tolls Oct 1996 • Tranche 2 • A13 Thames Gateway, London £146m Lane availability Apr 2000 (Transferred to T f L in July 2000) • A1 Darrington to Dishforth £245m Congestion Feb 2003 • A249 Stockbury to Sheerness £100m Congestion Feb 2004

  7. Secretary of State Highways Agency Department's Agent Funders (BCL / PFC) DBFO Agreement (Shareholders) Department's Representative (inc. Direct Agreement) (Highways Agency) (Bank Loans) (Bond Finance) DBFO Company Finance Company (RMS) Construction O & M Contract Contract Contractor (RMG) Operation and Maintenance (AMEC, A. McAlpine, Dragados, KBR) (A. McAlpine) Design Contract D2D DBFO Contract Overall Organogram Designer (Mouchel-Parkman) Design sub-consultants (KBR, Carl Bro) TYPICALCONTRACTUAL ARRANGEMENTS Total No. of contracts: 160

  8. Tranches 1 & 1A A13 D2D & A249 congestion shadow tolls availability payments safety safety safety payments performance performance lane closure charges Development of Payment Mechanisms in DBFO Projects CONGESTION MANAGEMENT PAYMENT MECHANISM Future M25 London Orbital likely to be availability-based mechanism

  9. A1 Darrington to Dishforth DBFO Project • Project includes: • 2 TPI Schemes: • A1(M) Ferrybridge to Hook Moor • A1(M) Wetherby to Walshford and new or upgraded Motorway Communications Facilities throughout Works cost: £245m Concession period: 33 years

  10. Congestion Management Payment Mechanism – D2D ContractComprises 2 separate key elements based on: (a) Active management of traffic congestion (i.e. minimising congestion)(b) Active management of traffic safety (i.e. minimising Personal Injury Accidents (PIAs))

  11. (a) Active Congestion Management Allocation of payment amounts and measurement of traffic • Whole Project Road divided into 50 NO 2 KM LONG CARRIAGEWAY SECTIONS (25 NB and 25 SB) • GROSS ANNUAL PAYMENT (as tendered) allocated to whole project road to give amounts for EACH HOUR on EACH CARRIAGEWAY SECTION pro-rata previous hourly traffic flows • VEHICLE SPEEDS and VOLUMES measured AUTOMATICALLY using a MONITORING SYSTEM based on inductive loop detectors (in carriageway surfacing)

  12. Monitoring System Out-station Equipment • Inductive loops & GR Marksman 660 counters • CCTV cameras for verification • Dedicated fibre optic cables for signal transmission

  13. Congestion Management Payments Minimum Condition Criteria must be met before any payment made

  14. £ Bonus Cap Benchmark +PIAs -PIAs B B C C A Cap £ Deduction (b) Active Safety Adjustment Criteria for Safety Payments or Deductions Zone A – no adjustments Zone B – enhanced adjustments Zone C – standard enhancements -8 -2 2 8

  15. 100 80 35 10 Total completion Pt U South Part Pt U North Part Construction Period Stepped-Up Construction Period Payments % of Full Payments Note: During construction period, lane closure charges also apply Time

  16. CURRENT STANDARDS FOR OPERATION AND MAINTENANCE • DBFO Co obliged to automatically adopt revised or new standards • Only exception – Step Change (remote unforeseeable change affecting whole motorway and trunk road network) • Not applicable to design and construction (standards fixed)

  17. SOME LESSONS LEARNT FROM DBFO PROCUREMENT • Schemes with large new-build elements more viable (more risk) • Need to reduce tendering costs • Need to reduce tendering / negotiation period • Need for well-resourced DBFO companies • Need to streamline contractual procedures

  18. M6 M1 M25 FUTURE PRIVATELY-FINANCED / DBFO PROJECTS • Motorway Widening Schemes: • M25 London Orbital – circa £1.5bn • M1 J21 - J30 – circa £2bn • M6 J11A - J19 – circa £2bn (possible toll road)

  19. M6 M1 M25 M25 London Orbital

  20. Thank You HOLMFIELD INTERCHANGE (A1(M)/M62 Junction)

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