Combined annual cost savings of £1.2Bn to deliver highways and rail infrastructure have been realised according to figures released by HM Treasury.

Its third annual ‘Infrastructure Cost Review’ published on Tuesday says that better collaboration and changed behaviours have helped to achieve £473M annual savings for highway schemes and £743M for rail projects.

The first Infrastructure Cost Review in 2010 set out a series of actions to support a 15% reduction in costs for project delivery across five sectors that also include energy, waste and flood defence activity. This year’s review shows that railways have achieved 15% savings and highways 12%. Total annual savings among the five sectors is £3.4Bn - a saving of 15%.

Report Steering Group chair Terry Hill said: “This latest Cost Review report gives me encouragement that by continuing to work together Government and industry can achieve the step change in behaviours through which reductions in the costs of delivering infrastructure can be sustained”.

Commercial Secretary to the Treasury Lord Deighton added: “The Infrastructure Cost Review programme has helped to establish a refreshed relationship and more open dialogue between Government and industry. However we cannot be complacent. As the economy recovers we will redouble our efforts to ensure that we have the necessary skills, capacity and innovation to embed cost and efficient delivery.”

Civil Engineering Contractors Association chief executive Alasdair Reisner said: “Industry has worked closely with Government to support the programme of delivering efficiencies across infrastructure sector in recent years. A lot of these savings have been achieved through a more efficient market, rather than coming out of margins.”

(Photo: Highways Agency)

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