Ken Skates MS, Minister for Economy, Transport and North Wales
Further to my last Written Statement in February 2020, I wanted to update members on progress with this project.
Construction is now substantially complete with the scope of work remaining relatively limited. A major traffic management switch was implemented in August 2020 which moved all traffic up onto the new elevated road at the western end of the scheme enabling work to start on the rebuilding the existing A465 road below. On the 7th December 2020 we re-opened the westbound on-slip road at Brynmawr which had been closed since August 2020 reinstating direct access along the A465 for traffic heading westbound.
As with almost every facet of life, COVID has had an impact on the programme although the project team has been exceptional in their management of the site to ensure the safety and well-being of their staff and the wider public and that any delay has been limited. The anticipated completion date is now autumn 2021 although this remains dependent on any future delays caused by COVID.
The cost increases and programme delays associated with the construction of the scheme have been well-documented including an interim report by the Auditor General and a session in September 2020 in front of the Public Accounts Committee. Welsh Government has been in a contractual dispute with Costain since 2018 about who should bear the cost of these increases. I can confirm that Welsh Government has now settled its dispute with Costain. While the details of the settlement will remain confidential the dispute process has been largely supportive of Welsh Government’s interpretation of the contract terms.
The final settlement with Costain allows the team to ensure their entire focus is on finishing the construction in the most efficient way possible. The timing of further payments to Costain is linked to them achieving identified programme milestones.
I remain grateful for the patience of road users and those living and working in the area while we complete the final construction works. I hope that this statement re-assures everyone that we are working to finish this scheme as soon as possible.
As the dispute resolution process has progressed Costain have made two regulatory statements, at the end of 2019 and again in September 2020, to update markets and adjust the level of revenue they expected to achieve from this contract. I understand that Costain plans to provide a further trading update to confirm settlement of the dispute.
In my February statement, I noted that my officials, along with local elected members, were requesting concepts of potential legacy projects for local communities along the route. Officials have finalised the list of concepts and are working with local stakeholders to develop and deliver meaningful and achievable Legacy Projects on the A465, either alongside the remaining construction or once construction is finished.
Members will also be aware that the contract to deliver the last two stages of the A465 Dualling between Dowlais and Hirwaun (Sections 5 & 6) was awarded to the Future Valleys consortium in October. Construction is due to start in spring 2021 and be completed by mid-2025.
As I have mentioned previously, sections 5 & 6 are being delivered by the Mutual Investment Model (MIM) which is a bespoke contract that is fundamentally different to that currently being used on Section 2. Under MIM, Welsh Government will not pay for this service until it is operational. The risks on this scheme sit largely with the appointed service provider with penalties if stringent operational requirements aren’t met. This will ensure Welsh Government is not exposed to the cost increases and programme delays experienced on Section 2.
Construction of Sections 5 & 6 will complete the dualling of the A465 and provide the continuous dual carriageway from the English Midlands and the M4, including the Ebbw Vale Enterprise Zone. When combined with the opening of Section 2, delivery of these schemes will ensure the full range of benefits are realised and deliver real social and economic transformational change to the Heads of the Valleys area. This is particularly important as the region which has been hard-hit recovers from the impacts of COVID.