Motorway junction upgrade scheme balloons in price

The cost of a road-improvement project in the South West has rocketed by GBP70m in 18 months, it has emerged. A report to Gloucestershire County Council's cabinet last week reveals that the M5 Junction 10 upgrade scheme has risen to GBP363m due to delays, planning requirements and inflation. The project, for which Galliford Try signed an early contractor involvement agreement in June 2023, had an initial budget of GBP293m.[1]

It was granted planning consent by transport secretary Heidi Alexander this summer and works are expected to begin on site in the autumn. But the latest report to councillors warns that increased costs and "the requirement to underwrite the construction cashflow" have opened up a GBP110m funding gap. The council will seek a further GBP70m from Homes England, GBP20m in Community Infrastructure Levy contributions, and put up the final GBP20m itself from land receipts.

A "variety of factors" behind the higher budget are cited in the report. "These include the costs associated with the significantly extended time required to prepare for and progress through the development consent order (DCO) inquiry, followed by the secretary of state's decision period. "This prolongation involved additional costs of professional services and design/contractor involvement during the process, as well as having the effect of extending the overall timeframe for the project.

"Any extension of time on the overall programme increases construction cost due to additional estimated inflationary pressure." The report notes that the DCO introduced conditions and requirements that further extended the delivery timeline and thus hiked costs. "The other key factor was the increased certainty on utility diversions which would be necessary as the detailed design was finalised and the requirement to ensure that the project held a higher risk contingency to comply with latest guidance," it adds.

"At present, M5 Junction 10 is not fit for purpose and unless this national infrastructure is upgraded to an all-ways junction, alongside the associated link roads, the capacity will restrict development." Enabling works are due to begin soon but the report does not specify a date. Completion is currently scheduled for 2029.

Councillor Julian Tooke, cabinet member for business, economic development, planning and infrastructure, described the M5 Junction 10 improvements scheme as a "catalyst for transformational growth and opportunity in the region, driving future investment and prosperity". He added: "It is fundamental to unlocking key developments such as the flagship Golden Valley development and the ambitious National Cyber Innovation Centre [both in Cheltenham]. "It will also enable delivery of up to 15,000 homes, including circa 5,250 affordable homes, and the creation of 12,000 high skilled, high productivity jobs."

Galliford Try has been contacted for comment.

References

1. ^ Galliford Try (www.constructionnews.co.uk)