Cost of the proposed LTC

We all know what the true costs are to our lives, health, homes, communities, green belt, ancient forests, agricultural land, wildlife, countryside etc.  What about the financial cost in figures! What is the estimated cost per mile of LTC?

Well, the cost just keeps rising, and according to the Funding Statement, one of the many newly released LTC DCO application documents, shows that the official estimated cost of the proposed LTC is now up to £9bn. However, many predict the cost would actually be over £10bn+, if the LTC goes ahead.

The National Audit Office have also voiced concerns about value for money issues on various road projects, including the LTC.

And this is tax payers money, and we’ll be charged to use it too if it goes ahead!

And that’s not even the true cost!

As we all know projects of this size and scale never run to budget, so we can safely presume that the overall cost for LTC will be over £9-10bn.

In addition to the cost of the actual project in monetary terms there is of course also the cost to our lives, health, communities etc. The environmental cost with the loss of greenbelt land, ancient woodland, grade 1 agricultural land, countryside, impacts to wildlife and their habitats.

How do you put a price on all of that?  How much will end up being spent in NHS costs as a direct result of the air pollution related illness caused by the LTC Toxic Triangle?

Thurrock Council have published a report that states at least £150m in loss to Thurrock as a direct result of LTC if it goes ahead, and that was back in 2020.  If one impacted local authority reports this kind of impact then surely it can be considered that the other impacted areas will also be impacted in a similar way?

Not forgetting that the Dartford Crossing will still also be over capacity even if LTC goes ahead, so more money will need to be spent trying to fix that.  So all this cost in so many ways and forms, yet the original issue that the LTC was meant to address will still not be solved.

National Highways had been keeping the ever rising cost as quiet as they can, not even mentioning it in consultations.  It has only been since the DCO application documents were published that we saw their latest estimate, which many still find hard to believe and expect it to rise further.

In February 2024 the Infrastructure and Projects Authority published their Analysis of the National Infrastructure and Construction Pipeline 2023 report, which highlights that construction material prices are over 40% higher than in January 2020. Since the current estimated cost for the proposed LTC is as at August 2020, this suggests that the estimates are likely to be inaccurate.

To date there is only an Outline Business Case for the proposed LTC.  The Full Business Case is not produced until after permission for large projects is granted (if it is granted).  We believe this to be akin to signing a blank cheque, as the project would be given permission based on an outdated estimated cost, and we all know historically large project soar in price.

Find out more about the ever rising cost and ever dropping Benefit Cost Ration, False Economy, and other cost related info

The estimated cost keeps rising, and the Benefit Cost Ratio keeps dropping

Over the years since 2016 the cost of the proposed LTC has risen from £4.1bn up to £9bn (as at Aug 2020. And is predicted by many, including MPs, to end up being £10bn+++.

Since 2016 the adjusted Benefit Cost Ratio (BCR) has dropped from 3.1 to 1.22 (as at Aug 2020).

But these figures are as at August 2020. This is evidenced in the fact that Figure 8 of the National Audit Office Road enhancements: progress with the second road investment strategy (2020 to 2025) Report – 25 Nov 2022 stated that the current estimated cost was between £5.3 billion and £9 billion as at August 2020.

Additionally, it states that there had been a cost increase since March 2020 of c.£1.9 billion. This suggests that the cost between March 2020 and August 2020 was around £1.9bn. The cost according to RIS2 announced at the Spring Budget on 11th March 2020 was £6.4-£8.2bn. If you add £1.9bn onto that it would be £8.3-£10.1bn.

Yet clearly in August 2020 (the point that the cost has increased by c£1.9bn) the lower end of the cost bracket alone is £5.27bn so had actually dropped compared to the lower end of £6.4bn that was stated in March 2020.

These numbers simply do not add up, and we feel are misleading to say the least.

Not only that but if the cost rose c£1.9 between March 2020 and August 2020 then how much must the estimated cost have risen following around a two year delay in the resubmission of the DCO application, and the 2 year rephasing that was announced by Government in March 2023?

This is also despite the LTC Development Director being quoted in Jan 2020 as saying that he was “confident” that changes would not result in the project going over £6.8bn. This clearly isn’t the case with the upper end of the cost bracket now up to £9bn, and the ORR since reporting an estimated cost of £8.3bn.

How are we supposed to believe it would still be within the estimated bracketed cost?

In fact, during the Issue Specific Hearing 1 Continuation Hearing of the LTC DCO Examination, one of the examiners actually quizzed National Highways on what rate of inflation was used for assessments, and concluded that she found the rate used seemed to be very much underestimated and wildly out of touch!



The table above highlights the estimated cost and BCR at key points in the process. Ref points for table can be found at the bottom of this section.

This clearly highlights that prior to the Secretary of State for Transport’s Preferred Route Announcement the estimated cost was between £4.1bn-£5.7bn, and is now up to £5.27-£9bn. The adjusted BCR has dropped from 3.1 to 1.22. As previously stated these figures are as at August 2020, and that bearing in mind the previous details above, even that is questionable, and is predicted by many (including MPs) to rise above £10bn, which would of course then lead to the already low BCR dropping even further.

Clearly the LTC DCO application is using out of date estimated costs as at August 2020. The Secretary of State will therefore be making a decision on whether to grant the DCO for the proposed LTC based on outdated information, as the Full Business Case won’t be made available until after a DCO is made. How can this not be considered anything other than a huge risk, particularly when we are talking about a project with such a huge and complex expensive project?


4 - https://highwaysengland.citizenspace.com/ltc/lower-thames-crossing-consultation/user_uploads/lower-thames-crossing-consultation-summary-business-case.pdf
5 - https://www.gov.uk/government/news/new-lower-thames-crossings-to-cut-congestion-and-create-thousands-of-jobs
6 -https://highwaysengland.citizenspace.com/ltc/consultation/supporting_documents/LTC%205%20The%20Case%20for%20the%20Project.pdf
7 - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/871978/road-investment-strategy-2-2020-2025.pdf?fbclid=IwAR1zVjsJCNRm824tsmPU5poQUem2hpMmoQ9OtoDsrJ_U6Uvj3J2qD5P_Qls
8 - https://nationalhighways.co.uk/media/w3rlnonz/ltc-obc-2022-foi-3385-ic-182335-r3f3_redacted.pdf
9 - https://infrastructure.planninginspectorate.gov.uk/wp-content/ipc/uploads/projects/TR010032/TR010032-001251-4.3%20Funding%20Statement.pdf
10 - https://infrastructure.planninginspectorate.gov.uk/wp-content/ipc/uploads/projects/TR010032/TR010032-001321-7.7%20Combined%20Modelling%20and%20Appraisal%20Report.pdf
11 - https://www.nao.org.uk/wp-content/uploads/2022/11/Report-Progress-with-the-second-road-investment-strategy-2020-to-2025.pdf
12 - https://www.gov.uk/government/publications/government-major-projects-portfolio-accounting-officer-assessments/lower-thames-crossing-accounting-officer-assessment-december-2022#regularity
13 - https://www.orr.gov.uk/sites/default/files/2023-07/annual-assessment-of-national-highways-performance-2023-web.pdf

False economy

NH/LTC have removed the Tilbury Link Road and Rest/Service Area from the LTC project, but both projects are now being considered as separate stand alone projects in their own right.  We would question whether this is being done to try and make the benefit cost ratio of the LTC look better than it really is. To be clear the Tilbury Link Rd is already featuring in the Road Investment Strategy 3 as a pipeline project, and we know the rest/service area is also still being discussed as a separate project.  If they are deemed worthy enough to still be considered in these ways, then why have they been removed from the LTC project?  Not that we want them of course, but the question has to be asked!

Other road projects like Kent County Council’s Blue Bell Hill improvements are being progressed as a direct result of the LTC, and again were originally part of the route options, since the connection was part of the route option known as Variant C.  The Port of Dover have also called for the dualling of the A2 from Lydden to Dover, if the proposed LTC goes ahead.  Again all at additional cost and all as a direct result of the LTC, if it goes ahead.

Oh and then there’s the issue of all the other additional works that will need to take place to the existing road network as a direct result of LTC.  We all know that if the LTC goes ahead it will create the need for much more additional work on the connecting roads, because we know that NH/LTC are not factoring in adequate connections, and it is not fit for purpose.  The proposed LTC would also utilise local roads such as the Orsett Cock and surrounding roads to enable the LTC to operate, which would result in further funding being needed for management and maintenance of such roads.

Not forgetting that the Dartford Crossing will still also be over capacity even if LTC goes ahead, so more money will need to be spent trying to fix that.  So all this cost in so many ways and forms, yet the original issue that the LTC was meant to address will still not be solved.

 

More expensive per mile than HS2

What does that work out at per mile?
Even if we take £9bn, the cost of the proposed LTC per mile is over £629m per mile. At £10bn, the cost per mile would be over £699m per mile.

Compare that to the cost of the highly controversial HS2, which is being scrutinised over a cost sitting at at £307m per mile of track.

To be clear we are not commenting that one is any less impactful than the other, this reference is purely to highlight the fact that there is a lot of attention over the cost of HS2, and LTC is a lot more expensive per mile.

Misleading cost comparison to Norwegian tunnel

Pro-growth group Britain Remade have made comparisons between the LTC and the Laerdal Tunnel in Norway, stating that the Norwegian tunnel is the longest road tunnel in the world and is cheaper than the LTC planning application cost.

However, this is not a like for like comparison as the Laerdal Tunnel for example is designed for an hourly traffic flow of 400 vehicles, or on average 1000 vehicles per day.  Whereas it is estimated the proposed LTC is forecast to  take 8000 vehicles per hour.

Paul Chapman, Vice President of the Association for Project Management discussed this on BBC Essex Radio in an interview in January 2024.

How much has been spent to date (Aug 2023)

On 12 August 2023 then roads minister Richard Holden MP wrote to the Transport Select Committee regarding the costs of the Lower Thames Crossing.

In it he said:

"Over £800m has been spent on the Lower Thames Crossing project to date. This is not solely on planning costs and is across the project, including technical surveys and investigations, land purchasing costs as well as on the three major National Highways contracts to deliver the Lower Thames Crossing"

A Freedom of Information request was submitted to ask that National Highways provide a breakdown of how much of this "over £800m" has been spent on:
1) Planning costs (each of the two, separate DCO applications)
2) Consultations
3) Technical surveys and investigations
4) Land purchasing costs
5) The three major National Highways contracts

The response was:
Cost to Feb-23
1) Planning costs (each of the two, separate DCO applications) £245.3m (or £294.36m with VAT)
2) Consultations 27.0 (£23.4m)
3) Technical surveys and investigations 307.4 (£368.88m)
4) Land purchasing costs 97.7 (£117.24m)
5) The three major National Highways contracts 2.6 (£3.12m)
Total 680.1 (or £816.12m with VAT)

The biggest costs so far are for technical surveys and investigations, and evidently these costs are non-recoverable and known as "sunk costs", so will not be added to the final bill for the LTC, skewing its poor BCR.

Additionally, notice how low low in comparison the cost of consultation has been, and let's not forget the fact that two DCO applications were submitted was due to the first attempt not being adequate.

Ask yourself whether you really feel that spending £9-10bn+ of tax payers money is good value for money, for a project that doesn’t even fulfil it’s original task to solve the problems at the Dartford Crossing.

Related

LTC Value for Money issues – click here

New Civil Engineer – LTC DCO application cost £266.7m (Dec 2022) – click here

We added a new update in July 2021 after the Office of Rail and Roads released a new report that specifically comments on the rising cost of LTC – click here

New Civil Engineer – Lower Thames Crossing opponents claim £8.2bn price tag is ‘not realistic’  (Sept 2021) – click here

TCAG 2021 Spending Review Representation – click here

Road Investment Strategy 2 report was released alongside the Spring Budget 2020 – click here