Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 1

Magor Rest Area objections

Objection Refs OBJ0026 (Roadchef) & OBJ0292 (Rontec)

File Refs WG/REB/OBJ0026 +OBJ0292-BWo

Response to Objectors’ Evidence: Roadchef – Construction Cost Aspects

Rontec – Construction Cost Aspects

Adran yr Economi a’r Seilwaith Department for Economy and Infrastructure

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 2

Author 3

Scope and Purpose of this Proof of evidence 4

SCHEME and ALTERNATIVES REBUTTAL 6

3.1. Introduction 6

3.2. Scheme and Alternatives Cost Estimates 6

3.3. Commercial in Confidence 7

3.4. Costain Vinci Joint Venture Pricing Approach (Published Costs) 7

3.5. SPON’s Civil Engineering and Highways Works Price Book 2016’Limitations 8

3.6. Vectos Cost Estimate 9

CONCLUSIONS – SCHEME AND ALTERNATIVES REBUTTAL 15

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 3

AUTHOR

1.1 I am Barry Woodman. I am a Director of Costain who are a major United

Kingdom Contractor and the Project Director of the Costain Vinci Joint

Venture. My professional qualifications are set out in my main proof of

evidence and are not repeated here.

1.2 The evidence which I have prepared and provide in this proof of

evidence has been prepared and is given in accordance with the

guidance of my professional institution and I confirm that the opinions

expressed are my true and professional opinions.

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 4

SCOPE AND PURPOSE OF THIS PROOF OF EVIDENCE

2.1 This proof of evidence addresses matters raised by objectors concerning

the rest area or motorway service area at Magor just off junction 23A of

the existing and proposed new motorway.

2.2 Roadchef and Rontec have submitted Statements in Evidence in relation

to the draft statutory Orders associated with the Welsh Government’s

proposals for the M4 Corridor around Newport (the Scheme), which has

been received via the Programme Officer.

2.3 The evidence of Roadchef and Rontec is provided in several volumes

from different witnesses as follows:

i. Mr Simon Turl, Roadchef (OBJ0026) - – Main and Supplementary evidence dated February and June 2017

ii. Dr Ian McKay, Roadchef (OBJ0026) - – Main and Supplementary evidence dated February and June 2017

iii. Mr Mike Axon, Vectos, on behalf of Roadchef (OBJ0026) – Main and Supplementary evidence dated February and June 2017

iv. Mr Henry Church, CBRE, on behalf of Rontec (OBJ0292)

2.4 This evidence will respond to the points raised in the evidence of

Roachef’s Mike Axton where it relates to the construction costs for the

Scheme: the M4 Corridor around Newport (hereafter referred to as the

Scheme), comprising a proposed new dual three lane motorway to the

south of Newport and complementary measures.

2.5 My evidence will also respond to the construction cost aspects of the

alternative routes that Roadchef has proposed.

2.6 Aspects of my evidence interface with the evidence of other witnesses

including Matthew Jones (WG1.1.1, WG 1.1.6), Bryan Whittaker

(WG1.2.1, WG 1.2.6), Stephen Bussell (WG1.3.1, WG 1.3.5), Ben Sibert

(WG 1.5.5), Dr Peter Ireland (WG1.7.1, WG 1.7.4) and John Davies (WG

1.23.1 and WG 1.23.4).

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 5

2.7 For simplicity of reference, throughout my evidence I will refer to the

following abbreviations:

a) ECI Early Contractor Involvement

b) Scheme M4 Corridor around Newport

c) DJV Design Joint Venture (Arup and Atkins)

d) SPON’s SPON’s Civil Engineering and Highways Works

Price Book 2016

e) PLI Public Local Inquiry

f) CVJV Costain Vinci Joint Venture

g) SU Statutory Utilities

2.8 My evidence is presented in the following structure, with a detailed

contents provided at the start of the document.

1. Author

2. Scope and Purpose of this Proof of evidence

3. Scheme and Alternatives Rebuttal:

4. Scheme and Alternatives Rebuttal - Conclusions

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 6

SCHEME AND ALTERNATIVES REBUTTAL

3.1. Introduction

The objectors’ evidence makes several statements about the cost

estimation of their proposed alternatives, westbound on slip and the

proposed eastbound off slip.

In the following sections of my rebuttal evidence, I will address specific

points raised by the objectors in their evidence where they are within

my area of expertise.

3.2. Scheme and Alternatives Cost Estimates

Mike Axon’s Supplementary Proof of Evidence dated June 2017 raises

the following points;

Page 2 Point 8

‘WG has provided construction cost estimates for elements of Junction 23 and Junction 23A6. WG is not able to provide the evidential basis for those costs for reasons of “commercial in confidence.’

Page 2 Point 9

‘Vectos has refined its cost estimates for the eastbound and westbound slip roads at Junction 23A based on publicly available industry standard evidence. It has revised its estimates for Objectors’ Suggested Alternatives (OSA) 8 to 11. These are set out in Appendix MAS 1.’

Page 2 Point 10

‘The Vectos cost estimates are, in the main, substantially lower than the WG estimates. They estimate the cost of the eastbound slip road in the order of £1.0 to £2.2m, and the westbound slip road in the order of £5.0 to £8.0m’.

Page 23 Point 13

‘The cost of providing both eastbound and westbound slip roads could be as little as ‘less than £5.4m’ over and above the Scheme cost of £1.093m (0.5%).’

Page 23 Point 14

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 7

‘Even on the basis of the WG’s assessment, the evidence for which is not consistent with the industry rates, and has not been made available for me to test, the cost is ‘less than 14.5m’ (1.3%).’

Appendix MAS 1, Cost Summary Note

‘The Works Cost calculations for each of the RoadChef alternative

options are calculated using the Approximate Estimating Rates from

SPON’s Civil Engineering and Highways Works Price Book 2016’

The principal points from the above will be address in the following

sections as follows;

Commercial in Confidence

Costain Vinci Joint Venture Pricing Approach

SPON’s Limitations

Vectos Cost Estimate

3.3. Commercial in Confidence

The rates and prices used to assess the cost of the alternatives

proposed by Vectos have been obtained in open competition from the

supply chain who will deliver the various elements of the scheme

should it proceed to construction. It would clearly be inappropriate to

publicly disclose these rates at this time as it would prejudice the

commercial position of preferred suppliers in future negotiations. The

public interest is served by maintaining confidentiality in relation to such

matters.

3.4. Costain Vinci Joint Venture Pricing Approach (Published Costs)

The Costain Vinci Joint Venture were awarded the ECI contract to take

the Scheme through the Publication of Draft Orders, Local Public

Inquiry and construction if the scheme proceeds. This Tender was won

in 2014 competitively against a range of national and international

contractors bidding for the tender. The tendered rates have been used

to price the Scheme as well as the alternatives proposed by RoadChef,

including the suggested westbound on slip.

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 8

The alternatives proposed by RoadChef including the suggested

westbound on slip have been quantified from the outline design

information provided from the DJV detailing the key structures,

earthworks, drainage, carriageway and finishes additions and

omissions from the base Scheme.

The prices for the proposed RoadChef alternatives and westbound on

slip have been independently challenged, reviewed and validated by

the Welsh Government advisor’s Arcadis.

I note however that at the time of writing there is ongoing discussion

with Vectos in regard to the design for the west bound on slip provided

by the DJV after it became apparent that the CVJV and Vectos were

preparing costings from different plans and I hope to update the inquiry

in that regard in due course.

3.5. SPON’s Civil Engineering and Highways Works Price Book

2016’Limitations

Vectos have relied upon SPON’s in preparing their costings.

As noted in Mike Axon’s Supplementary Proof of Evidence (OBJ0026-

096a-IN) ‘SPON’s is an industry-wide recognised method to provide a

range of rates for estimating purposes for highways and structural

elements of work’. However, the use of an estimating source such as

SPON’s has limitations in so far as it is a generalisation of a pool of

data across a wide range of schemes. Where Scheme specific detail

and understanding is available a more accurate estimation of the cost

should be used in preference to the rates obtained from SPON’s.

SPON’s does not reflect the specific aspects of the Scheme as follows;

Programme and sequence of the works.

Interface with other activities and stakeholders.

Access and preparation of the works areas.

Contractors risk, although we consider this is currently

accommodated within the 44% optimism bias applied by

both Vectos and CVJV

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 9

Local market conditions, resource availability and skills

constraints.

Specific physical site constraints.

Specific scheme issues such as complex or extensive

Statutory Utilities works or on line working.

The Scheme presents a number of unique challenges

associated with the scale of the project in terms of access

and logistics.

The above factors will introduce inconsistencies and variations to the

prices derived using SPON’s and it is for that reason that costing on the

basis of Scheme specific detail and understanding is more appropriate,

where it is available.

In addition to the Scheme specific issues noted above the following

aspects of the Scheme are considered to be outside the scope of

works covered by the SPON’s rates:

Detailed design costs, typically estimated as a percentage of

the construction cost.

Costs prior to construction associated with the ECI Phase to

implement changes should they be recommended by the PLI

Inspector.

3.6. Vectos Cost Estimate

A review of the cost estimate provided by Vectos in Mike Axon’s

Supplementary Proof of Evidence dated June 2017 has been

undertaken by the CVJV. The approach adopted has been to apply the

Vectos rates derived from SPON’s to the quantities measured by the

CVJV estimating team for the proposed Vectos alternatives and the

proposed eastbound off slip. The estimated costs derived from this

assessment were found to be broadly in line with the costs published

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 10

by the Welsh Government for the Vectos proposed alternatives in the

Objectors’ Suggested Alternative’s Report.

Eastbound Off Slip

The drawing in Appendix A illustrates the alignment used by the CVJV

to assess the cost of the Eastbound Off Slip. This generally accords

with the drawings used by CVJV to assess the costs of the Eastbound

Off Slip

Details of the Vectos costs have not been provided in open

correspondence.

A summary of the CVJV costs approach to the Eastbound Off Slip is

set out in Table 1 below

Following a ‘without prejudice meeting with Vectos on 04/07/17 we

consider the cost difference between the CVJV costs and the Vectos

costs of the Eastbound Off Slip is explained by an underestimation of

the following;

Alterations to the SDR at the new roundabout.

Slip road quantities

Structures / SU Protection

New NMU access track

Allowance for land costs

Design Fee

Table 1

CVJV Quantities and Cost Summary – Eastbound Off Slip

Roadworks 1168 linear metres of carriageway

Structures / SU Protection Wall protection at transmission station

Preliminaries 20%

Land Cost included

Optimism Bias 44%

Design Fee Cost included

CVJV Total Estimated Cost using Vectos Rates

£5,035,107

Vectos Estimated Cost £2.200,000

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 11

Westbound On Slip (CVJV Cutting Alignment)

A summary of the CVJV costs estimate for the Westbound On Slip is

contained in table 2.

The drawing in Appendix A illustrates the alignment used by the CVJV

to assess the cost of the Westbound On Slip.

It became apparent during a “without prejudice meeting” with Vectos on

4 July 2017 that Vectos had estimated their costs from an alignment

that was very different to that used by the CVJV. I understand that the

Welsh Government has concerns about the Vectos suggested

alignment as follows:

additional widening necessary on Llandevenny Rail Bridge

(the width used in the WG iteration is already at maximum

due to Overhead electrification line spacing constraints)

substantial retaining walls are required to separate the on

slip from the mainline of the motorway

the bridge would be approx. 4m higher

the alignment is on embankment for parts of its length and

this would have greater landscape and visual impact

In contrast the WG alignment considers the existing topography, the

relationship with the M4CaN Scheme proposals and constraints such

as the Llandevenny Railway bridge. The vertical alignment was

prepared to avoid retaining walls and minimise landscape and visual

impacts, by assuming cutting rather than embankment, whilst still

providing necessary bridge clearances. WG consider this to be a more

optimal design for costing purposes.

Discussions with Vectos are continuing in order to resolve the issue of

whether the CVJV alignment or the Vectos alignment is more

appropriate to use for costing purposes.

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 12

The CVJV consider the cost difference between the CVJV and Vectos

is explained by;

Underestimation by Vectos of the size of the westbound slip

road bridge passing over the new M4.

Additional earthworks volumes required to form the cutting

from the bridge to the slip road tie in with the new M4 before

Llandevenny Bridge crossing the London to Swansea main

line.

Design Fees

Table 2

CVJV Quantities and Cost Summary – Westbound On Slip

Roadworks 700 linear metres of carriageway

Structures / SU Protection 810 m2 Bridge Deck

Earthworks 87,000 m3 of cut, 18,700 m3 fill

Preliminaries 20%

Land Cost included

Optimism Bias 44%

Design Fee Cost included

CVJV Total Estimated Cost using Vectos Rates

£15,169,782

Vectos Estimated Cost £8,000,000

Westbound On Slip (Vectos Suggested Alignment)

Notwithstanding the above, following the ‘without prejudice meeting

with Vectos on 04/07/17 we have considered the costs that would be

associated with the Vectos suggested alignment for the Westbound On

Slip, which as above we do not believe to be the most appropriate

alignment. A summary of the costs is set out in Table 3 below.

The CVJV consider the cost difference is explained by an;

Underestimation of the size of the westbound slip road

bridge passing over the new M4.

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 13

Underestimation of the length of the slip road extending onto

Llandevenny Railway Bridge

Omission of widening of Llandevenny Railway Bridge.

Adjustment to Network Rail Signal Gantry adjacent to

Llandevenny Railway Bridge

Design Fee

Table 3

Quantities and Cost Summary

Roadworks 770 linear metres of carriageway

Structures 891 m2 of bridge deck

Earthworks and Reinforced Structures

26,000 m3 fill and 675 m2 of wall

Preliminaries 20%

Network Rail costs and signal gantries

Costs included

Land Cost included

Optimism Bias 44%

Design Fee Cost included

CVJV Total Estimated Cost using Vectos Rates

£14,655,466

Vectos Estimated Cost £8,000,000

Alternatives 8, 9 and 10

A comparison of the costs used by the CVJV and Vectos in relation to

Alternatives 8, 9 and 10 is set out in table 4 below, which shows the

differences between the CVJV costs and the Vectos costs.

For comparison purposes a costs estimate has also been prepared

using the CVJV quantities and the SPON’s rates used by Vectos. The

differences between the Vectos and WG costs (both using SPONs)

show that the quantities that have been used by the CVJV are different

to those used by Vectos. Vectos’ quantities are generally less than

CVJV’s and I believe they are underestimated, along with the omission

of design fees.

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 14

The differences between the WG estimates using tendered rates and

those using SPON’s rates indicate that the CVJV rates are generally

lower than SPON’s

Table 4

Vectos Estimate

using SPON’s

(£m)

WG Appraisal

Cost (£m)

WG Quantities

using SPON’s

(£m)

Objectors

Alternative 8

46.66 42.97 59.26

Objectors

Alternative 9

0.81 26.53 38.05

Objectors

Alternative 10

6.15 25.65 26.48

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 15

CONCLUSIONS – SCHEME AND ALTERNATIVES REBUTTAL

The CVJV assessment of the Vectos cost estimate has confirmed the

validity of the CVJV estimates and clearly indicate that Vectos have

underestimated the quantum of the works required using their

estimating methodology. The CVJV initial assessment considers

Vectos are likely to have underestimated their quantities. This could in

part be due to the costing estimates being prepared from different

plans. However, CVJV have developed a costs estimate based on the

plans Vectos appear to have been working from, and these still show

significant differences which are largely due to differnces in quantities

and inclusion of design fees.

The use of SPON’s rates by Vectos is a coarse cost assessment tool

likely to omit and therefore under estimate significant project specific

costs such as design fee, resource availability and local market

conditions. Therefore, we consider the cost estimates prepared by

CVJV as published in the Objectors’ Suggested Alternatives Report to

be an accurate estimate of the expected costs inclusive of the current

Scheme knowledge and Scheme specific factors noted in this

document.

We will continue to work with Vectos to resolve issues between us as

to the appropriate design on which costs estimates should be based

and will update the inquiry in due course.

I confirm that the statement of truth and professional obligations to the

inquiry from my main proof still applies.

Welsh Government M4 Corridor around Newport Rebuttal Statement

July 0217 Page 16

Appendix A Alignment used by the CVJV to assess the cost of the

Eastbound Off Slip

WTA 11b

20200

20300

20400

20500

20600

20700

20800

20900 21000

21100

21200

21300

B4245 (West)

B4245 (East)

A4810 (North)

A4810 (South)

EB M4 Diverge for service access

WB M4 Merge from service access

90m

M4 CORRIDOR AROUND NEWPORT

ROAD CHEF ALTERNATIVEAT JUNCTION 23

P01

S2FOR INFORMATION

1:1250 AjD

05/07/17

BEB

05/07/17

CCR

05/07/17

SM

05/07/17

P01 AjD BEB CCR05/07/17 First IssueM4CaN - DJV - HGN -

Z5_GEN - SK - CH - 0147

Date

Scale

Drawing Title

Project TitleDrawing Status

DO

NO

T SC

ALE

Date Date DateClient Original Size

Suitability

Milli

met

res

100

100

A1Drawing Number Revision

Location Type Role Number

Project Originator Volume

Designed / Drawn Checked Approved Authorised

Rev. Date Description By Chk'd App'd

Project Team

SAFETY, HEALTH AND ENVIRONMENTALINFORMATION

In addition to the hazards/risks normally associated with the types of workdetailed on this drawing, note the following significant residual risks(Reference shall also be made to the design hazard log).Construction(Enter "None" if applicable)

Maintenance / Cleaning(Enter "None" if applicable)

Use(Enter "None" if applicable)

Decommissioning / Demolition(Enter "None" if applicable)

© Crown Copyright and database right 2015. OrdnanceSurvey 100021874. Welsh Government.© Hawlfraint a hawliau cronfa ddata'r Goron 2015. RhifTrwydded yr Arolwg Ordnans 100021874.

KEY PLANGENERAL NOTES:

1. ALL DIMENSIONS ARE IN METRES UNLESS NOTED OTHERWISE.

2. ONLY WRITTEN DIMENSIONS SHALL BE USED, DO NOT SCALE.

3. FOR MAINLINE AND OTHER JUNCTION PLAN AND PROFILES SEE DRAWINGREFERENCES M4CaN-DJV-HGN-ZG_GEN-DR-CH-0071 TO HGN-ZG_GEN-DR-CH-0107.