Written question asked by Lord Berkeley (Labour), in the House of Lords. It was answered by Lord Davies of Oldham (Labour) on Wednesday, 25 October 2006.

Roads: Improvement Schemes

Question: Following the recent announcement that the Hindhead bypass and tunnel will now cost£371 million compared with £107 million in 2001, whether they are taking any action to improve the accuracy of their cost estimating of trunk road schemes.

Answer: The Highways Agency has already taken steps to improve estimating by moving, in 2003, to full outturn estimates which include allowances for inflation and optimism bias in the tendency to underestimate project cost, duration and VAT. It has further actions in hand to develop its approach to cost estimating and project management. The Secretary of State for Transport has asked the Nichols Group to review the Highways Agency's approach and to make recommendations, including on how the agency should best assess, monitor and report on risks to its cost estimates.

Secondary information