Almost £26m added to bill for Norwich Northern Distributor Road - which means it will now cost £16.5m a mile
PUBLISHED: 15:36 17 November 2017 | UPDATED: 15:36 17 November 2017
ARCHANT EASTERN DAILY PRESS (01603) 772434
The controversial Norwich Northern Distributor Road will now cost £16.5m a mile - after the bill increased to an estimated £205m.
Norfolk County Council had already said the road’s £178.9m budget had been exceeded, with contractors Balfour Beatty pushing up the price because of extra costs accrued building the 12.5 mile road.
Discussions over the soaring cost took place behind closed doors, with press and public excluded. The council said the public interest in keeping commercially sensitive information under wraps exceeded public interest in releasing it.
However, today the figure - an extra £25.6m - was revealed, ahead of a meeting where councillors will be asked to agree to increase the total budget for the road by an extra £19.3m.
That will take the total bill to an estimated £205m, which works out at about £16.5m a mile for a road, which will stretch from the A47 at Postwick to the A1067 Fakenham Road once complete.
The council agreed to add an extra £6.8m to the road’s budget in February. But councillors will now be asked to use £7.3m out of the budget for capital projects and £12m from cash balances in the short term, until a permanent solution is identified.
A breakdown of the extra costs reveals: • Delays in getting the go-ahead to take the road over the railway line at Rackheath and a change in design added £2.7m
• Diverting utilities, such as gas pipes, added an extra £6.2m to the bill
• The need to change design to make the ground stable added £3.8m
• £1.5m was added to the cost of buying land - and that could yet increase further.
However, council officers said the road remained good value, although they conceded they might approach other projects - such as the Great Yarmouth Third River Crossing and the so-called western link, which would connect the NDR to the A47 to the west of Norwich differently.
Tom McCabe, director of community and environmental services at County Hall, said the council, which brought in consultants to help with the negotiations, had done the best it could to keep the cost down, including renegotiating the bonuses payable to the contractors.
He said the road still represented high value, according to the Department for Transport’s criteria, although he added: “That’s no compensation for me, because I want to deliver projects for the lowest possible price.”
Asked why the council had not agreed a fixed price contract for the project, Mr McCabe, who was not at the authority when it was signed, said: “That’s all about risk. It’s about how much risk does the council take on and how much is passed to the contractor?
“We could have gone for a fixed price contract where the contractor takes a higher proportion of the risk, but there’s a price premium in that of some 20pc to 30pc.
“What we are looking at is an increase of over 15pc, so, as things stand, we are still better off than if we had gone for a fixed term contract.”
But Mr McCabe said he might consider future contracts based on the design to build principle, where the contractor designs and builds, with the price agreed after the design stage.
Martin Wilby, chairman of the council’s environment, development and transport committee, said, despite the increase: “I am confident that people will think it is worth the money. It’s a great project for Norfolk.
“It is disappointing that we have to find extra money, but after strong negotiations we have come to this figure.
“We have to find that money from somewhere and a paper will come before councillors in January to establish where it will come from.”
The council is currently consulting over cuts to services, including proposals which could see children’s centres closed and merged with libraries, less money spent on highways maintenance and money for rural buses reduced.
Mr Wilby said it was too early to say what could be affected by having to find a further £12m.
The first section of the NDR, from the A1067 Fakenham Road to the A140 Cromer Road, opened last week. The second stage, from the A140 to Wroxham Road, could yet open before Christmas and the remaining section to Postwick could be completed by March next year.
But progress could be affected depending on the winter weather and there could yet be extra costs added to the final bill.
‘A touch of irony’
The £7.2m to be allocated for the NDR was originally meant to be used by a council subsidiary called Norfolk Energy Futures.
That company, set up in 2011, was supposed to generate income for the council through the likes of wind turbines and solar panel. But it was liquidated in July this year.
Steve Morphew, leader of the opposition Labour group at County Hall, said: “There’s a touch of irony in using money originally intended for carbon reduction to fund the overspend on a road, no matter how important that road might be.” He added: “We might now know the figures and the justification, but what I want to know is how did we get this overspend without anyone realising it as we went along?
“That’s an explanation we need. The money has to be found, but clearly there is going to be an impact on the finances of the council.
“There needs to be proper scrutiny of how we got to this point and somebody needs to be held accountable.”
‘It’s just plain disgraceful’
The soaring cost for the road has been criticised by one of those who campaigned to stop it from being built.
Green city councillor Denise Carlo, who is also a member of the Norwich and Norfolk Transport Action Group, had argued against the road at the public inquiry into it.
She said: “It means that people on low incomes in Norfolk are paying for people to drive on a piece of tarmac, which makes me really angry.
“It’s just plain disgraceful. We have not got a high quality public transport system in Norwich and 33pc of households do not own a car, so how are they going to get to the employment which the council says will be created by this road?
“And, as for the climate change implications, this road is going to take us in the wrong direction.”