UK civils projects in spotlight as costs rise 60% above EU average

1 November 2010

UK civil engineering projects cost almost two-thirds more than the European average, demanding a complete rethink of how they are procured, regulated and delivered, said the interim report of a government review for Infrastructure UK.

The interim findings of the Hill Review, conducted by Terry Hill, a former chairman of Arup, were published this week alongside the UK’s first National Infrastructure Plan, reports Building.

The review found that the UK has the fourth highest civil engineering costs in the EU, more than 60% above Germany, whose infrastructure costs close to the European average, twice that of Italy, and over three times that of Bulgaria, the lowest priced economy in Europe.

Disproportionate project costs were blamed on stop-start investment by successive governments, overbearing regulation, poor commissioning and ineffective cost management. The problems were compounded by a fragmented supply chain, an overly contractual approach by builders and engineers and a lack of data on the condition of UK infrastructure assets, it said.

Construction Enquirer website highlights the report’s warning that the economic downturn risked further escalating costs due to adversarial contracting: ‘where low prices achieved under competition may be increased at out-turn as a result of claims.’

It also said too many smaller contractors were acting as main contractors in the UK compared to their European peers and had failed to develop the appropriate skills.

The review panel, chaired by Hill, will now draw up a set of cost cutting recommendations in a final report due at the end of the year. The 19 possible areas of action include reviewing regulations, revamping procurement and earlier contractor involvement, concludes Building.

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