23rd May 2007: Its official, Northern route costs rocket past £156 million, and still no answer to local congestion!

Figures produced by Lancashire County Council show that the estimated costs of building the controversial Northern route dual carriageway have rocketed, past the previous £137 million ‘worst case’ estimate, to an eye watering £156 million. (1) But the County Council now expects the taxpayer to foot the bill for the massive road and then cough up millions more for additional measures to combat the district’s horrific congestion nightmare.

“The Northern route is designed to attract additional heavy traffic into the Heysham peninsula to try to boost the ferry port,” says David Gate chair of TSLM the local campaign group, “the road is not designed to relieve in town traffic; it’s an HGV route to Ireland. With the regeneration of Luneside underway, and the plans for the Canal Corridor development proposed, a great deal of new traffic will be drawn into Lancaster city centre. New congestion relief measures south of the river will be essential, but the County Council is still hell bent on blowing the transport budget on the irrelevant Northern route.”

“The planners know that more congestion lies ahead, that’s why they have recently commissioned an integrated transport study for the district. This study should have been done before they went ahead with the Northern route, but they were desperate to get their foot in the Government funding door,” says Mr Gate. “They won’t wait for the outcome of the study; they are banking on yet more public money so that they can spend their way out of an embarrassing situation.”

The £156 million estimate includes a provision in the event that the planners have been over optimistic and underestimated the estimate (2), but costs could easily rise dramatically if engineering problems are encountered at any of the technically complex crossing points for the Canal, West Coast railway and the River Lune at Halton. (3)

It is mind boggling that the County Council expects the public to suffer a polluting and destructive £156 million lorry route across the district without an end to their local congestion chaos. But the Northern route plan does face major hurdles, the public inquiry starts in July, and the road has not even been accepted into the Government’s funding scheme. Many road schemes are competing for funding ahead of the Link plan. The Government demands effective solutions and value for money, perhaps a standard too high for the destructive and underperforming Northern route.

Notes

(1) Source: From “Regional Funding Allocation (Transport)” Quarterly Update May 2007

Completion of Heysham to M6 Link Road – scheme cost has increased by £15.3m

Previous estimate (excluding Optimism Bias) £100.23 million

So revised estimate (excluding Optimism Bias) £115.53 million

Add Optimism Bias @ 35% £156 million

(2) Note on optimism bias:

Department for Transport defines Optimism Bias as "the demonstrated systematic tendency for appraisers to be overly optimistic about key parameters. To address this tendency appraisers need to make explicit, empirically based adjustments to the estimates of a project's costs, benefits, and duration." (TAG Unit 3.9.4. para 1.1.1)
"Guidance to Local Authorities seeking DfT funding for transport Major Schemes" (April 2005) states that "...the Department will continue to
require an allowance for optimism bias to be included as a cost in the appraisal process..." (para 4.5.1).

LCC consider they may spend the Optimism Bias, as shown in a letter from S McCreesh (Group Engineer, Roads) (18 April 2006)

“It is too early to say what additional scheme costs may result, but they are not expected to be significant and would be expected to be covered by the Optimism Bias allowed for in the calculation of the rate of return of the scheme”

(3) A recent report by the National Audit Office (15 March 2007) criticised local authorities for underestimating the costs of road schemes. http://nao.gov.uk/pn/06-07/0607321.htm. The report said “The latest local authority forecasts indicate that costs will increase further with the final cost likely to be 31 per cent more than the initial estimates.”