Highways Agency

Procurement policy
The Highways Agency uses four procurement routes for its construction work. All routine and winter maintenance work is let under 20 regional or area framework agreements. These will be reduced to 14 over the next few years. Nine of these term contracts are managing agent contracts (MACs). Some of these have been let, with the remainder due to be let in 2003. Five regional maintenance contracts are procured using a managing agent and term maintenance contract. The intention is that over time these contracts will become MACs. Small improvement contracts of less than £5m are let under regional framework agreements. Major improvements are let either under a form of early design-and-build contract, where the selected contractor becomes involved at the preferred route stage, or as a PFI scheme.

Current and future projects
In July 2000, the government set out its 10-year plan for transport, including a £21bn roads improvement programme. Investment in capital schemes was forecast to rise from £700m in 1999/2000 to £1.4bn by 2004/05. Most of this increase will come from the public purse, although PFI-funded road schemes are forecast to deliver £200m a year of capital works from 2001/02 to 2004/05. Over time, the government is aiming for PFI schemes to deliver about 25% of the capital programme. However, the outlook beyond then becomes less clear, with an increasing number of PFI projects suffering delays. The most recent spending review did little to alter this situation, with funding for roadbuilding remaining in line with the original 2000 review plans.

Major projects in the pipeline include: £240m Darrington–Dishford PFI; £190m Feerybridge–Hook Moor PFI; £145m M25 widening (to facilitate Terminal 5); and the £100m M1 widening near junction 24. In 2002 a host of small projects were let and some large PFI projects were won, although delays surround some. For instance, the £125m Stonehenge improvement is unlikely to go ahead until 2004/05. The similarly priced Hindhead improvement is also unlikely to go ahead until 2005. Major maintenance projects set to be awarded over the short term include: area 4 (£180m), area 13 (£75m) and area 14 (£64m).

Essential information
The Highways Agency recently announced new packaged contracts, whereby contracts will be packaged to allow steady workloads for contractors over the six years to 2010. The work will be geographically based and split into low- and high-value projects. The aim is to let between 60 and 80% of major schemes this way. The agency also recently announced a £5.5bn construction programme including major works on the M1, M6 and M5.