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£15million Cost Savings For Highways Project

31 May 2011

Costain has helped to deliver £15million worth of cost savings for a major road project in Port Talbot through managing innovative client specific solutions and Value Engineering, which ensured the project went ahead and continued to receive funding from the Welsh Assembly.

The Early Contractor Involvement (ECI) phase of the Port Talbot Peripheral Distributor Road (PDR) Stage 2 project, between April 2009 and October 2010, led to £15million of savings against the original tender.

This was delivered through having a dedicated team from Costain and the client, Neath Port Talbot County Borough Council, reviewing the scheme’s objectives.

Value Engineering involves developing the same or better product while using fewer resources. Some of the solutions included changing the carriageway foundations from piling to reinforced earth together with surcharge and settlement periods, and amending road layouts to reduce carriageway areas.

“Working with the client, we used a three-stage Value Engineering process which focused our efforts on ideas that were more likely to deliver value without compromising on quality,” said Charlie Sleep, Planner for the scheme.

Sleep said potential savings were initially brainstormed at a Project Team workshop. The second stage was to develop the ideas and come up with a budget cost and saving for each one within two weeks of the workshop. The third stage was to develop the selected ideas and outline the design before seeking stakeholder approval.

“The three-stage approach ensured that the amount of effort expended on an idea was proportional to the likely savings it would yield, and also that the appropriate level of stakeholder buy-in was achieved at each stage,” said Sleep.

“Throughout the process, we maintained a running total of the potential and achieved savings. This allowed us to determine which ideas were worth pursuing further at each stage of the process, whilst keeping a focus on the target savings required,” Sleep said.

The new proposals required the submission of a new planning application for the route in October 2010.  The actual construction budget for the scheme was £84 million but this was eventually brought down to £69 million.

“We’re delighted with the results which represent an excellent example of working together to find client-specific solutions,” said Rhys Griffith, Project Manager for Port Talbot PDR scheme.

“The Value Engineering delivered project savings which made the scheme affordable and ensured that Transport Grant funding was provided by the Welsh Assembly,” said Griffith.

The savings also delivered improved economical cost benefit assessment results for the scheme, which helped inform the award of a European Convergence grant of £59million for the scheme. This is believed to be the largest European grant to Wales for a Highways scheme.

The Port Talbot PDR will be an important catalyst for the regeneration and economic development of the industrial area of Port Talbot by providing direct access to the M4 Motorway and dock area. The three-mile link road will also remove local traffic from the M4 and reduce congestion in a restricted corridor.

Commenting, John Skentelbery, Project Manager on the Port Talbot PDR project, said: “The need to Value Engineer the project was extremely important in enabling the project to go ahead to the construction phase. The pre-construction Value Engineering involved all parties, including Neath Port Talbot CBC, Costain, our supply chain partners and key third parties, and this will continue through the construction phase. The exercise has resulted in a stronger “one team” approach focused on delivering a successful project.”