Inflated inflation? A465 service payments set to rise on RPIx

04/12/2020
Rhodri Clark

Annual Service Payments (ASPs) for the new A465 dualling contract are set to rise substantially in real-terms because the Welsh Government will apply the Retail Prices Index (RPI), which the Office for National Statistics urges officials not to use.

The ASPs are fixed at £38m in current prices, totalling £1.14bn over 30 years, excluding VAT and inflation.

However, inflationary increases will be pegged to RPIx (the RPI excluding mortgage interest payments), which has increased by 59% more than the official Consumer Prices Index over the past five years.

And the gap between RPIx and CPI inflation appears to be widening. It was 48% when measured over the last 10 years.

Total A465 ASPs over 30 years are on course to be tens of millions of pounds higher than had CPI been used. Explaining the use of RPIx instead of CPI, a government spokesman said:

‘Historically RPIx has more accurately reflected the inflation exposure of the types of activities undertaken in road construction, operation and maintenance and is the market recognised/expected inflation measure based on other PPP road projects in the UK.’

The scheme will add a fourth lane to 11 miles of road between Dowlais and Hirwaun.

The estimated construction cost of the scheme has risen to £590m, compared with ‘in excess of £550m’ last month.

The Government spokesman said it was more difficult to isolate construction cost within the design, build, finance, operate contract than in a traditional design and build contract.

‘Additional work has been undertaken to complete this exercise which has identified the £590m figure.’

Latest Issue

latest magazine issue

Inside

  • The £2.5bn Surrey partnering contract
  • The politics of protest
  • Stoke's roadworks league
View the latest issue


Highways jobs

Environmental Health/Environmental Protection Officer - Noise

£41,607.00 - £44,598.00
This post attracts an essential car user allowance. The post holder is able to take part in the Council's flexible working scheme. Tower Hamlets, London (Greater)
Recruiter: Tower Hamlets London Borough Council

Engineering Manager

£46,756 - £54,238 per annum
The Engineering Team is responsible for the management of the Council’s fleet of vehicles (circa 330), ensuring... Camden, London (Greater)
Recruiter: Camden London Borough Council

Street Care Operative

Grade 3 - Starting at £18,657 per annum, rising to £19,905
The Council’s Street Care service is responsible for the cleanliness of the whole borough and undertake a range of street cleaning and street care ... Chelmsford, Essex
Recruiter: Chelmsford City Council

Neighbourhood Highways Officers (Western Team)

£28,672 - £32,234 per annum
We are seeking to recruit two Neighbourhood Highways Officers, to be based in Okehampton. Devon
Recruiter: Devon County Council

Demand Responsive Transport Officer

£32,234 pa - £34,728 pa
The role sits within the Integrated Transport Unit. Hertfordshire
Recruiter: Hertfordshire County Council

Head of Highways

£68,640 - £76,148 per annum
We are absolutely delighted to announce that Cheshire West and Chester are looking for a Head of Highways. Chester, Cheshire
Recruiter: Cheshire West & Chester

Highways Team Leader

£25,481 - £25,991
Are you a hard-working and experienced Highways operative, looking for the next step in your career? Cumbria
Recruiter: Cumbria County Council

ICT Field Engineer

£29,577 - £30,451
This is an exciting and challenging time to join us, as throughout the organisation we are... Cumbria
Recruiter: Cumbria County Council

Senior Structural Engineer

£45,768 per annum
The role involves managing the Structural Engineering Team and the budget for structural engineering consultants.   Lambeth, London (Greater)
Recruiter: Lambeth Council

Street Works Manager

£45,594
Are you a self-starter who takes ownership of problems and takes pride in finding solutions? Lambeth, London (Greater)
Recruiter: Lambeth Council

Highways Network Officer

£31.346 - £32.234
Are you looking to progress your career within the Highways and Transport sector? Cumbria
Recruiter: Cumbria County Council

Bridge Engineer

£35,745.00 to £36,922.00
We are currently seeking to recruit an experienced and enthusiastic Bridge Engineer. Kendal, Cumbria
Recruiter: Cumbria County Council

Highways Team Leader

£25 481 - £25 991
Are you a hard-working and experienced Highways operative looking for the next step in your career? Workington, Cumbria
Recruiter: Cumbria County Council

Inventory Technician

£19,312 - £20,493 per annum
We have an exciting opportunity available within the Highways Service at Sandwell Council.  Sandwell, West Midlands
Recruiter: Sandwell Metropolitan Borough Council

Shopmobility & Public Convenience Attendant

Grade 3 - Starting at £18,657 per annum, pro rata rising to £19,905
We are looking for an individual who works well in a small team to deliver an excellent level of service at our flagship Market Road Public Conveni... Chelmsford, Essex
Recruiter: Chelmsford City Council

Waste Collection Operative - HGV Driver/Loader

Grade 5 - Starting at £23,403 per annum, rising to £25,791
If you enjoy working outside and would like to make a positive contribution to the collection of both waste and recycling in the Borough, this coul... Chelmsford, Essex
Recruiter: Chelmsford City Council

Director of Climate Emergency & Behavioural Change

£95,000 to £109,000 per annum
At Waltham Forest we are developing an ambitious, transformative agenda to tackle the global Climate Emergency. Waltham Forest, London (Greater)
Recruiter: London Borough of Waltham Forest

Street Works and Permitting Manager

£44,863 - £51,817
Are you a qualified highways engineer who wants to make a difference to the efficient running of the highway network within Lincolnshire? Lincolnshire
Recruiter: Lincolnshire County Council

Highways Officer

£27,741 to £30,451
Are you someone who is looking to progress their career with one of the most highly regarded highway services in the country? Brompton, Northallerton
Recruiter: North Yorkshire County Council

Highways Officer

£27,741 to £30,451
Are you someone who is looking to progress their career with one of the most highly regarded highway services in the country? Boroughbridge, York
Recruiter: North Yorkshire County Council

Highways Presents

Highways on Fridays

Register now!

Latest Video