Jam and bread

Construction firms working in central London have two weeks to avoid a lengthy period of confusion and chaos. The confusion will be over how to organise a system for paying the upcoming congestion charge; the chaos will occur when they try to implement their hastily improvised solutions and find that they are more work than they dreamed possible.

In theory, the bureaucratic jam threatened by the congestion charge should be easy to avoid.

If firms with more than 25 vehicles register their fleets with Transport for London by 26 January, then paying the charge will be as easy as paying a gas bill. According to Transport for London, contractors join a "fleet scheme" by providing registration numbers for their vehicles. TfL will then do all the paperwork and present firms with a monthly bill for their contribution to central London's traffic problem.

The alternative is to pay a separate £5 charge for every trip by every vehicle to every site for an indefinite period – a prospect that Sheila Murphy, group transport manager at contractor McNicholas, describes as "totally ridiculous". The strength of her reaction is explained by the fact that she sends an average of 30 to 40 vehicles a day into central London, and could soon find herself trying to keep track of hundreds of different bills a week.

Despite the grimness of this prospect, most firms do not seem to be aware of how little time they have to prepare for the charge. Peter Rogers, chairman of the strategic forum, says many are ignorant of the impact it is about to have on them. "I have my doubts that companies are prepared for it," he says. "A lot of people were just hoping it wouldn't happen. I've heard so little about it that I'm afraid people will not know about it and will get caught out in the first few days. There will be a lot of anger."

This ire is shown in Murphy's reaction. She places the blame squarely on TfL for failing to notify businesses of the regulations. "I've received nothing official about it," she says. "Nobody has told us how it's going to operate."

As well as the burden of paperwork, of course, firms are facing extra costs – and there is near unanimity about who will be paying for these: the clients.

Ken Mowle, a project director at Mowlem, says materials and transportation firms will pass their additional costs to contractors, who will relay them to clients. "If the congestion charge is going to be a permanent feature, we'll be building it into our costings pretty quickly," he says. William Avery, director of developer GARBE, agrees. "The only people who will pay are the people who buy the projects," he says. "With future projects, there will be an increase in costs."

These costs are not negligible. The Corporation of London has calculated that an average central London site requires 6000 deliveries, and so will rack up an extra £30,000 in charges. Add to that money claimed by specialists and consultants visiting the site and the costs of administering the scheme and you are probably looking at something like £50,000. Larger sites, of course, will cost much more – a really big project may need as many as 25,000 lorry loads of materials.

We’re aware many businesses regard travel to central London as essential, which is why we set up the scheme

Transport for London spokesperson

The likelihood is that firms will not be able to do a great deal to reduce these costs. London sites usually have next to no storage space, which means that they operate "just in time" delivery policies. As Mowle says: "You can't stockpile materials [on site]; you're relying heavily on transport to bring materials in on time."

The scheme is the brainchild of London mayor Ken Livingstone and is a response to London's increasing inability provide enough road for everybody who wants to drive a vehicle – average traffic speed in London is 10 miles per hour, slower than it was before the invention of the internal combustion engine.

It is being justified on the grounds that it will, in the long run, save businesses money. A TfL spokesperson says: "We're confident that congestion charging will result in significant improvements in journey-time reliability, and savings for businesses." Avery, however, predicts that that will only happen if the capacity of public transport is substantially increased. If it is not, he says, "the roads will go back to normal in a very short space of time".

The charge covers eight square miles of central London, and applies from 7am to 6.30pm, Mondays to Fridays. Those wishing to drive into the area during those times must pay the £5 fee in advance or on the day of their journey, unless they have nine or more people in their vehicle and register in advance with TfL. Payment can be made on the internet, by phone or at shops.

Geoff Dossetter from the Freight Transport Association estimates that the minimum cost to businesses delivering into London will be £40m a year, a total that would be doubled by the administration costs of the scheme.