I am writing to update members on the A465 Section 2, Gilwern to Brynmawr dualling.
As you know, the Welsh Government is delivering a package of hugely ambitious improvements to dual 40km of the A465 between Abergavenny and Hirwaun. The project includes a scheme to widen the road between Gilwern and Brynmawr - Section 2.
Section 2 involves the online widening of 8km within the steep sided and environmentally sensitive Clydach Gorge. Construction started in early 2015 and is over three quarters complete. When finished, it will complete a dual carriageway between the English midlands and the Heads of the Valleys, including the Ebbw Vale Enterprise Zone.
I have previously issued two written statements, one in November 2017 the other in June 2018 regarding the commercial position on the project.
In June 2018 the Wales Audit Office (WAO) also began an audit of the project’s commercial position. Welsh Government officials, Costain and our Employer’s Agent have provided the WAO with a comprehensive package of information to enable them to understand the project position. The dispute resolution process continues and we are awaiting an interim report from the WAO setting out in factual terms, findings from the work they have undertaken to date. It would not be appropriate for me to comment further on the dispute whilst it is ongoing.
Further to the above, the project has experienced delays and cost increases due to difficulties experienced on site. Costain has highlighted that the primary reason for this is due to a complex construction solution required to address the geological feature that they have discovered in one particular location along the scheme. The solution required will impact on the construction costs and programme.
While the vast majority of the scheme will be completed by December 2019, completion of the full scheme will now extend into 2020. The project has also experienced further cost increases and is now projected to be some £54.90m (incl. VAT) over the revised budget.
I am obviously very disappointed by this news, however, my officials are working with Costain to deliver the project as soon as practically possible.
The project team continues to use a range of methods to keep stakeholders informed of progress on site, particularly road closures. Measures include social media updates reaching over 45,000 people, websites, presentations, letter drops, newspaper and radio advertising, on-site and advance traffic signs and a full time public liaison team. I have also instructed my officials to hold regular public meetings to ensure that local communities are kept up do date with the latest information.
Early Contractor Involvement was selected for this project. Industry-standard best-practice for large highway infrastructure projects over the last 15+ years has included the use of the Early Contractor Involvement (ECI) design and build form of procurement. This form of procurement is used extensively in the UK and has been Welsh Government Transport Division’s preferred procurement route for large, complex infrastructure projects. It has been implemented successfully on a number of major trunk road projects delivered in Wales in recent years.
In their “The State of Roads in Wales” investigation the Economy Infrastructure and Skills committee noted widespread support for the ECI approach.
Historically civil engineering delivery models involved a contractor engaged to carry out construction work on a project that has already been subject to significant levels of design development – usually by a separate consultant who would have taken the design through the Statutory Process before the build contractor was appointed.
The ECI contract involves the appointment of an integrated design and delivery team early in the development stage of the project and that whole team then taking it through outline design development, Statutory Process and then onto detailed design and construction.
The dispute resolution process has highlighted a number of areas for improvement within Welsh Government’s model contract and also within the Institution of Civils Engineers New Engineering Contract (NEC) suite of documents. A comprehensive lessons learned process has been set up to ensure they are fed into current and future procurements within Transport Division but also back to NEC for future updates of the NEC suite of construction contracts.