Patrick Harvie, the Scottish Green Party MSP, said the committee, of which he is the convener, would take a leading role in scrutinising the so-far unexplained additional costs of the bridge. He said these endangered Scotland’s entire transport infrastructure programme.
Questions over Transport Scotland’s ability to cost and deliver a project of unprecedented scale to a reasonable budget have increased since the abrupt cancellation of the Glasgow Airport Rail Link, and the subsequent bitter dispute over the alleged extra costs that forced its abandonment.
Although in traffic capacity terms the proposed new bridge is similar to the design proposed by the Tory government in the mid-1990s, its proposed costs have skyrocketed over the past decade from around £300m to around £2bn.
Harvie said: “I am immensely sceptical about Transport Scotland’s figures. I don’t recall a single cost estimate they have made that has turned out to be correct.” He said the agency’s system for calculating “optimism bias” -- insurance against its own failure to cost a project correctly -- was “as accurate as sticking your finger in the air to see which way the wind is blowing”.
His comments were echoed by David Whitton, a Labour member of the finance committee. He said the committee might be “looking very closely at these numbers”, possibly before it was formally required to scrutinise the financial memorandum accompanying the parliamentary bill to enable the new crossing. “We don’t know why it costs as much when compared to similar structures, and there is no clear explanation so far as to why it should be two or three times more than other bridges,” he said.
“Ministers will be required to come before the finance committee to face some close questions,” he added. “For a major project we need more detailed information.”
Mile for mile, the estimated £1.7bn-£2.3bn cost of the bridge will make it, and its approach roads, one of the most expensive structures of its type ever conceived. The bill for the taxpayer comprises a construction cost of £777m, on top of which is an extraordinary £1.14bn “uplift”, comprising the “annual managed expenditure” (a Treasury-prescribed accounting requirement to show the cost of capital), plus inflation seemingly calculated at about 7% a year over the proposed five and a half years of the construction. There is also an additional £95m “risk allowance” and £178m “optimism bias”.
The proposed cost has come in for increased scrutiny as the project nears the tendering process, with only two international consortia competing to bid. The economist Professor John Kay, a member of the Scottish government’s Council of Economic Advisers, last week described the price of the bridge as “very high and extremely hard to justify”.
A comparative study recently claimed the average cost of major road bridges around the world worked out at less than £200,000 per metre, whereas the proposed Forth Bridge is priced at around £750,000 per metre.
However, Transport Scotland has hit back at critics of the price, describing their analysis as “superficial” and “misleading”.
A spokesman for the agency said: “The requirements of the bridge mean it will feature large spans, significantly larger than other comparable structures, which have to be constructed in a marine environment across important shipping lanes. These and other important factors -- such as inflation, land costs and the amount of new connecting roads -- all contribute to the cost, making superficial comparisons with other bridges misleading.”
The agency says it derived its price using “cost data” from international comparisons. However, the only relevant comparator -- Stonecutters Bridge, due to be completed this year in
Hong Kong -- has an estimated total build cost, including approach-road infrastructure and “risk” elements -- of HK$3bn, or £245m. The Stonecutters Bridge also has far longer spans than the proposed Forth Bridge, crosses one of the busiest shipping lanes in the world and is approached via land priced at around 10 times the cost of land in Scotland.
Transport Scotland’s figures appear to take the total completed costs of the other structures as construction-only prices, onto which massive additional charges are then added. This inflates the Scottish bridge, in the case of the Hong Kong comparator, by roughly eight times. Sceptical experts have noted that, because the comparison structures have been completed or are near completion, their costs already contain such additions -- and accuse the agency of double-counting by adding the additional charges to an all-inclusive construction cost, justified on the grounds of a tendency for appraisals to be overly optimistic.
One civil engineer told the Sunday Herald: “If you take Stonecutters Bridge, the actual cost was in the region of £245m. This is a delivered price that contains profit, contingencies, financing, risk and any Hong Kong Government taxes. The bridge is a three-lane structure, like the Forth Replacement Crossing, and is only about 400m shorter.
“They have only one price from a comparable bridge. They have taken that cost and for some unknown reason they have doubled that figure. Then they now want to add all of these sums in again by way of risk, optimum bias, VAT etc to arrive at an out-turn price, and then they want to double it for finance, fees and Treasury tax.”
Transport Scotland has produced a “whole-life cost” for maintaining the bridge, in the region of £3bn based on the controversial build costs, though the agency does not specify the intended lifespan of the structure.
With only weeks to go before the relevant bill is presented to the Scottish Parliament, Transport Scotland is belatedly advertising for a project director for the Forth Replacement Crossing, on a salary of £110,000 -- seen as relatively small for a project of such technical, financial and political complexity.
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