Unknown cost to taxpayer of tunnelling M25 could equal several years total flood defence spending
If Heathrow airport was allowed to build its new north west runway, documents prepared for the Airports Commission by Jacobs indicate the cost of the works to tunnel the M25 (at its widest in that part of its circular route) could cost between £1.35bn to £3.22bn. How much Heathrow would pay is not yet clear. The cost would depend on the length of motorway affected and the cost per kilometre. Recent work to widen the M25 cost £3.4 billion for 35 kilometres. The Commission thinks that figure is too high, though it included 30 years-worth of maintenance (costing 20% of the total). The cost of the work should perhaps be around £50 million per kilometre, or more. The Commission says: “We note that the airport operator has suggested funding 50% of these works, with the remaining 50% borne by the public sector. The Airports Commission has not taken a view as to the split of funding between private and public sources and believes that this would be a matter for negotiation should the scheme be taken forward.” By contrast the Government spent £2.3 billion on floor prevention for the 4 years 2011 to 2015.
By contrast, the Telegraph states (2.12.2014 link ) that:
“Plans for a new settlement in Bicester, Oxfordshire, containing up to 13,000 homes, will be funded with nearly £100 million of public spending and loans.”
and the Standard said (13.5.2014 link )
“Heathrow said…..with the Government paying £1.2 billion towards the M25 tunnel and motorway widening.”
By contrast the Government expects to pay about £2.3 billion on flood defences over the period 2011 to 2015. See http://www.parliament.uk/briefing-papers/sn05755.pdf (Page 4) which is around £600 million per year over the 4 years.
“Some 5.2 million properties are at risk of flooding in England. Annual flood damage costs are in the region of £1.1 billion. These costs could rise to as much as £27 billion by 2080. It has been estimated that maintaining existing levels of flood defence would require flood defence spending to increase to over £1 billion per year by 2035.” Link – Commons Library Standard Note.
“The Treasury is today revealing the projects that will receive a share of the £2.3 billion already earmarked for capital spending on flood defences over the next six years to improve protection for 300,000 homes.” 2.12.2014 (Friends of the Earth link )
“Under the Heathrow plan, a 600-metre, 14-lane tunnel would be built to replace an existing section of the M25, passing under the runway. The taxpayer would contribute £1.2bn towards improved transport links.” 13.5.2014 Guardian
Appraisal Framework Module 4. Surface Access: Heathrow Airport North West Runway
5.9 Road Scheme costs
5.9.1 Out-turn costs of recent road widening schemes on the M25 were used as a basis for estimating the total cost associated with providing the capacity enhancements summarised above. These total estimates include pure engineering costs, land costs, environmental mitigation costs and the consequential costs of the schemes themselves.
5.9.2 It has been reported that the recently-constructed M25 junctions 16-23 (M40-A1 (M)) widening programme cost £3.4bn for the 35km stretch. The Government’s Public Accounts Committee have been critical of these costs and have suggested that improved management could have resulted in a total spend of £2.4bn. Furthermore, the total costs included construction and 30 years-worth of maintenance. Assuming that the maintenance costs accounted for 20% of the total suggests a newbuild efficient cost of £1.92bn, equivalent to £55m/km.
5.9.3 It has also been reported that the recently-constructed M25 junctions 27-30 (M11-A13) widening programme through rural Essex cost £360m for the 27km stretch. This equates to a total spend per km of £13m.
5.9.4 Taking a weighted average of these costs per km (most of the widening due to the new North West Runway at Heathrow will be more similar to the junctions 16-23 programme than the junctions 27-30 programme), we have assumed that the Heathrow road widening costs will vary between £35m-£50m/km. A similar approach and a value of £50m per km was adopted during the Phase 1 analysis.
5.9.5 Table 16 overleaf summarises the estimated costs for the Extended Baseline with SRA surface access proposal for Heathrow.
5.9.6 Taking the unit road widening costs described above, we estimate that the strategic highway cost of the new North West Runway at Heathrow in the optimal surface access proposal will vary between £0.94bn and £2.23bn. This variation is due to two reasons as follows:
The variation of the length of road to be widened depending on whether the criteria to widen is 100% capacity or 85% capacity; and
The variation in unit widening costs.
5.9.7 These costs exclude risk and optimism bias. With an optimism bias of 44%, the Extended Baseline road surface package costs range from £1.35bn to £3.22bn.
5.9.8 Asset replacement and operational expenditure (OPEX) were not considered during this study, but analysis of these costs was undertaken in a different worksteam and are detailed in a separate report, entitled ‘Deliverable 13.2: Cost calculations’.
“For the purposes of this analysis, the full costs of the M25 tunnelling works have been categorised as surface access improvements, rather than “scheme capital expenditure” works which ordinarily include engineering projects within the boundary. We note that the airport operator has suggested funding 50% of these works, with the remaining 50% borne by the public sector. The Airports Commission has not taken a view as tot he split of funding between private and public sources and believes that this would be a matter for negotiation should the scheme be taken forward.”
P 48. Section H2 of
Appraisal Framework Module 13. Cost and Commercial Viability: Cost and Revenue Identification Heathrow Airport North West Runway.