The Welsh Government claims that Costain is exposed to the majority of the financial risk arising from a forecast 23% cost increase in a road project.
Dualling the A465 between Gilwern and Brynmawr was previously expected to cost about £220m.
Work began on site in early 2015 and expected completion has been deferred from spring 2019 to autumn 2019. One option under consideration is opening the eastern section in October 2018, a year or so before completion of work amid the challenging topography of the western section.
Welsh transport secretary Ken Skates said the Early Contractor Involvement process was used for the project to minimise the Government’s exposure to risk. Costain could have walked away without penalty when the project reached a hold point, had it decided that its cost projections were unrealistic.
‘Costain went ahead regardless, and I am determined that we will do everything we can to protect taxpayers from the additional costs, which we are assessing currently,’ said Mr Skates.
His officials have taken commercial and legal advice.
‘The contractor is currently exposed to a greater level of financial risk from the overspend than Welsh Government,’ he said. ‘Their financial exposure should motivate them to reduce their level of risk. We are satisfied that we have exercised the appropriate level of management and supervision on this project.’
A Costain spokesman said: ‘We do not comment on specific commercial discussions in relation to our clients but continue to work closely with the Welsh Government to deliver this complex project.’
