Utility companies are facing higher charges of up to £10,000 a day for road works which take too long to complete.
Companies who dig up the road have to agree a time frame for works with the local council.
If work overruns and the client has not negotiated the additional time with the local council then they face an ‘overrun charge’ for each additional day they spend on the road.
The maximum daily overrun charge is currently £2,500.
From October that will rise on the busiest roads to £5,000 a day for the first three extra days, rising to £10,000 a day from the fourth extra day onward.
Transport minister Norman Baker said: “We know that utility firms need to dig up the road to maintain the infrastructure we all rely upon but sometimes this work takes far too long to complete, causing disruption and frustration for everyone using the road.
“Increasing these charges means that utilities will pay penalties which reflect the cost of the disruption suffered when works go on longer than they should.
“The increases will also provide an incentive for utilities to finish works on time and prevent people sitting in unnecessary traffic jams in the first place.”
The hike in charges has been attacked by leaders of the National Joint Utilities Group.
CEO Les Guest said: “Given the very high levels of compliance, NJUG challenges the Government to justify why such an increase is needed, particularly at a time when the Government is committed to reducing burdens on business.
“Higher charges could lead to a greater focus on money by local authorities and utilities, rather than everyone working together to reduce disruption through planned and co-ordinated works.
“Once again Government is targeting utilities, despite the improvements they are making, without tackling local authority works which account for around 50% of works in the street, but are not subject to the same incentives.”