8 Cost Information: Full Corridor and Managed Crossing Scheme 8.1 Full Corridor Scheme: July 2008 estimate 8.2 Full Crossing and Managed Crossing Schemes: October 2008 estimates

8 Cost Information: Full Corridor and Managed Crossing Scheme

8.1 Full Corridor Scheme: July 2008 estimate

A cost estimate for the Full Corridor Scheme was prepared in July 2008 for:

A 3 corridor cable stayed bridge with orthotropic deck and concrete approach viaducts.
A short length of motorway standard road to be constructed between the north bridgehead of the replacement bridge and the existing A90 to the south of Ferrytoll junction, upgrading of the existing A90/M90 northwards to Halbeath Junction, and associated junction improvements with free flow connecting roads to the Forth Road Bridge;
A section of motorway standard road constructed from the bridge to join onto the A90 at Scotstoun Junction, with a new junction for South Queensferry and new free flow connecting roads to the Forth Road Bridge.
An upgrade to Junction 1a on the M9 to provide east and west facing slip roads.

8.1.1 Cost Data

The primary sources of cost data used were:

Stonecutters Bridge Hong Kong - a 1596m cable stayed bridge (1018m main span and two 289m back spans), currently under construction.
River Usk Crossing, Newport, Wales - a 250m main span cable stayed bridge that forms part of the proposed New M4 project.
Chacao Project, Chile - a three tower suspension bridge.
Lake Mead, USA - contract awarded early 2008 for the design and construction of a deep water intake valve and associated rock tunnels.
Cheviot Offshore Platform, Scotland - concrete gravity structure for offshore oil production.
M1 Widening J6a-10, UK - £250m on-line widening of 17km of existing motorway under an ECI contract awarded in 2007.
M1 Widening J25 to J28 - £325m ECI contract awarded January 2007 (with rates at a base date of Q3 2007) for the on line widening of 23.5km of motorway from D3M to D4M.
M1 Widening J21 to J25 and J28 to J30 - cost estimates totalling around £2 billion at a Q2 2006 base, compiled with independent contractor input on buildability, construction sequencing and traffic management, for the widening of 60km of mainly D3M to D4M with major remodelling of specific junctions.
N11 Ashford Bypass, Ireland - a â‚¬105 million traditional re-measurement contract at a 2002 base for 14km of new D2AP involving significant earthworks volumes including excavation and processing of natural rock materials.
Spons Civil Engineering and Highway Works Price Books 2007 and 2008.

Where rates were taken from the above sources, appropriate consideration was given to differences in scope, procurement method, location, currency and base date in deriving the rates to apply to the Forth Replacement Crossing Project.

A benchmarking exercise was undertaken to validate the derived rates upon which the cost estimate was based. The rates were benchmarked as appropriate against other current Scottish design and build contracts and against the Transport Scotland Road Asset Valuation System.

8.1.2 Capital Cost Estimate: Risk and Optimism Bias

A risk management programme was established to identify the risks for the various stages of the Forth Replacement Crossing Project, including procurement, design and construction.

There are inherent risks and uncertainties in the costs of large civil engineering projects due to various unforeseen circumstances. To take these into account, a risk factor is used to uplift the scheme cost estimates.

It has also been demonstrated that there is a systematic tendency for appraisals to be overly optimistic. Evidence suggests that many parameters within a project can be affected by optimism. Benefits can be overstated, and timescales and costs underestimated, particularly in the early stages of project development. To offset this, the Scottish Transport Appraisal Guidance (STAG) recommends that an Optimism Bias is applied to the scheme costs.

The capital cost estimate prepared for the Full Corridor Scheme includes allowances for:

Risk: allowances of 17.27% and 22.39% respectively were calculated for the north and south connecting roads respectively and 9.4% for the main crossing.
Optimism Bias: the degree of design development was assessed to require an allowance for optimism bias of 25% for the network connections and 45% for the bridge.
VAT: only non-recoverable VAT is allowed for in the estimate. Overall, 45% of the value of roadworks and all of the replacement crossing costs were assessed to be subject of non-recoverable VAT.

8.1.3 Cost Estimate Summary: Full Corridor Scheme (July 2008 estimate)

The cost estimate at Q4 2006 prices (excluding inflation to outturn prices and the cost of capital) is shown in Table 8.1:

Table 8.1: Cost Estimate: Full Corridor Scheme (July 2008 estimate)

Element	Full Corridor Scheme £m
Network Connections North	299
Network Connections South	142
ITS and Supervision	41
Main Crossing (Option 1A)	613
Approach Viaducts (Option 1A)	108
Sub-total excl risk, OB and VAT	1,204
Risk allowance	160
Optimism bias (OB)	499
Sub-total excl VAT	1,863
Non Recoverable VAT	223
Total incl. Risk, OB and VAT	2,086

8.2 Full Crossing and Managed Crossing Schemes: October 2008 estimates

8.2.1 Design Refinements

A considerable amount of information from field surveys became available post-July 2008 including information from the topographical survey and the land based and marine ground investigations. This additional data facilitated design development, a better quantification of identified risk, and a review of the appropriate allowance for optimism bias.

8.2.2 Scheme information

As described elsewhere in this report, the principal differences between the Full Corridor Scheme and the Managed Crossing Scheme are:

The incorporation into the Managed Crossing Scheme of:
- The Forth Road Bridge.
- A narrower cross section for the Forth Replacement Crossing and its connecting roads.
- ITS from Halbeath to M9.
The deletion of:
- Motorway widening and junction improvements of the M90 north of Admiralty to Halbeath.
- The removal of free flow connecting roads to the Forth Road Bridge.

For the Managed Crossing Scheme, a new series of options for the Main Crossing were developed based on a dual two lane motorway standard (D2M) carriageway with widened hard shoulders to provide future operational flexibility.

At the Option Selection Workshop held on 27 October 2008, the deck and tower options were assessed against a series of headings including cost, aerodynamic stability, aesthetics, construction duration, operation and maintenance, environmental impact and sustainability. Option 1A, a two corridor orthotropic single box girder deck with mono towers, was used as the basis of the cost estimate. The option has composite twin box girders on the approach viaducts.

When comparing the costs of the D2M crossing to the Full Corridor Scheme, it should be noted that various issues contribute to the main changes in cost in addition to the reduction in functional cross sections. These include:

Marine ground investigation indicates higher rockhead levels at south tower;
Reduced excavation required at Beamer Rock by raising foundation level; and
Reduced ship impact allowances due to more detailed risk assessment
Refinement of the calculation of preliminaries.
Reduction of statutory undertakers’ costs on cable stayed bridge.

8.2.3 Capital Cost Estimate: Comparison

Table 8.2 sets out the capital cost estimates for the Full Corridor Scheme (as at July 2008 and as modified in October 2008) and the Managed Crossing Scheme, all at Q4 2006 prices. Outturn prices allowing for the cost of capital and an estimated inflation range are also detailed.

Table 8.2: Comparison of Capital Cost Estimates

Element	Full Corridor Scheme (as defined July 2008) Costs (£m)	Full Corridor Scheme (as modified Oct 2008) Costs (£m)	Managed Crossing Scheme (Oct 2008) Costs (£m)
Network Connections North	299	254	124
Network Connections South	142	152	90
ITS and Supervision	41	26	26
Main Crossing	613	613	455
Approach Viaducts	108	108	82
Sub-total excl risk, OB and VAT	1,204	1153	777
Risk allowance	160	156	95
Optimism bias	499	247	178
Sub-total excl VAT	1,863	1,556	1,050
Non Recoverable VAT	223	217	145
Total incl. Risk, OB & NR VAT	2,086	1,773	1,195
Uplift to outturn costs:
Addition for Cost of Capital (Annual Managed Expenditure) and inflation to 2016	1,114 to 2,114	857 to 1,747	525 to 1,145
Total Outturn Cost Range (2016)	3,200 to 4,200	2,630 to 3,520	1,720 to 2,340

8.2.4 Whole Life Cost Estimate Comparison

In addition to the capital costs, operations and maintenance (O&M) cost profiles detailing the operating costs and the lifecycle refurbishment costs have been estimated.

For the network connections the O&M costs have been derived for the new-build network only, notwithstanding that this may be incorporated into a wider operational network. Costs for the existing bridge have been assessed based on information made available by the Forth Estuary Transport Authority (FETA). Under the Full Corridor Scheme these costs are for a ‘mothballed’ bridge, the O&M regime ensuring that the structural integrity of the bridge is maintained, but that it carries no vehicular traffic. Under the Managed Crossing Scheme, the existing bridge would carry light rail and buses only, a significant reduction in its present loading regime; the estimated O&M costs reflect this revised function.

A comparison of the whole life costs are set out in Table 8.3.

Table 8.3: Whole life cost comparison

Cost Element		Costs at Q4 2006 prices (£,000s)
Cost Element		Full Corridor Scheme (as modified Oct 2008)	Managed Crossing Scheme
Construction Costs excl VAT (from Table 1.1)
	1,556,000			1,050,000
O&M Costs
Network Connections		93,000	34,000
New Bridge		413,000	340,000
Existing Bridge		218,000	342,000
O&M sub total		724,000	716,000
Lifecycle Refurbishment Costs
Network Connections		103,000	39,000
New Bridge		430,000	392,000
Existing Bridge		208,000	556,000
Lifecycle cost sub total		741,000	987,000
Total		3,021,000	2,753,000