Portsmouth PFI roads contract with Colas will cost taxpayers £56m more than predicted

FUNDING a ground-breaking deal to maintain Portsmouth’s roads will cost almost £56m more than was first thought, The News can today reveal.

Tuesday, 15th October 2019, 7:00 pm
Updated Wednesday, 16th October 2019, 10:52 am

Figures obtained by JPIMedia – publishers of this paper – have shown the 25-year deal between Portsmouth City Council and private contractor, Colas has soared in price and is now expected to cost at least £642.4m.

Signed off in 2004, the trailblazing private finance initiative (PFI) was hailed as the first of its kind in Britain.

However, figures released by the council through a freedom of information request have shown the predicted overall cost has grown by £55.7m from £586.7m to £642.4m – a 9.5 per cent hike.

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In Portsmouth Colas is responsible for road maintenance including gritting, cleaning rubbish from public land, drain clearance and streetlight maintenance

The surge comes just days after the Department for Transport slated the current state of the city’s highways, claiming 38 miles of Portsmouth's council-run roads suffered ‘considerable deterioration’ in 2018/19.

The situation has shocked the city’s highways boss, Councillor Lynne Stagg, who branded the agreement a ‘bad deal’ from the start.

‘It’s not as wonderful a deal as it could have been,’ Cllr Stagg said. ‘It might have been a good opportunity at the time but when you come to the fine detail you realise it’s not been a good deal.’

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The lost billions

Initially, the arrangement appeared promising. An early £63m splurge saw Portsmouth’s appalling road conditions overhauled over five years.

However, costs began to creep up from an initial part-year payment of £2.1m in 2004/5 to £25.1m 13 years later. The final payment in 2030 is predicted to be a whopping £36.4m.

Council officials insisted no services had been affected and that the financial model agreed with Colas ‘took account of the fact that inflation would increase’ over the 25 years but conceded: ‘Inflation has been higher than was originally forecast.’

The news has concerned travel campaigners in the city, who feared the PFI deal was hindering efforts to introduce new road safety measures.

Ian Saunders, chairman of Portsmouth Cycle Forum, said schemes like the widening of pavements in Southampton Road had taken far longer than expected and suspected wranglings related to the PFI contract were to blame.

‘There appears to be a block in investment in the cycle network because of the PFI contract,’ he said.

Cllr Stagg said the deal hadn’t been all bad and praised Colas’s work maintaining city roads.

However, she claimed there were occasions when the council had balked at charges given by Colas.

She said: ‘When I was a cabinet member 10 years ago we were getting quotes for zebra crossings (from Colas) that were astronomical.

‘We decided to put it out to tender. We got three zebra crossings done for half the price predicted by Colas.’

Colas said it has repaired more than 100,000 defects in city roads and pavements since 2004.

As well as road upkeep, the contractor also oversees street cleansing, drain clearance and street lighting maintenance.

In the first five years alone, Colas said it resurfaced 1.3m square metres of highway and replaced 9,700 lamp columns.

The city council added the authority was working to address ‘various issues’ with Colas, having agreed ‘cost savings’ in the PFI.

Speaking of the deal, a council spokesman said: ‘The contract is funded by PFI credits from the Department for Transport which are £9.8m a year.

‘No services have had money taken from them as a result of the increase in PFI costs.’