Part of 3. Topical Questions – in the Senedd at 3:12 pm on 29 November 2017.
I'd like to thank the Member for his questions. I've already said to Members previously that I'd welcome any referral of businesses, or indeed individuals or self-employed people, who are suffering as a consequence of the roadworks on this particular stretch to be brought forward to Government with a view to us assisting.
I can say that the moment I was informed of costings problems in delivering this hugely ambitious scheme I ordered an immediate and comprehensive commercial review, which has now reported back. I can confirm as well that officials took specialist, commercial and legal advice on these matters, and the resolution and negotiation of such issues is a confidential and commercially sensitive process. But the contract is absolutely clear: the contractor is currently exposed to a greater level of financial risk from the overspend than Welsh Government. Their financial exposure should motivate them to reduce their level of risk.
I'll outline the process by which we entered into a contract with Costain. This is a hugely significant engineering and construction project, but I don't think there's any hiding my disappointment at the contractor's overspend and programme delay. We used the early contractor involvement process and also industry standards, terms and conditions in order to ensure that Welsh Government's exposure to risk was reduced as much as possible. The ECI approach is intended to bring in at a very early stage a contractor's expertise on buildability, ability to innovate and approach to effective management of risk in order to influence design development.
I think it's fair to say that a complicated scheme such as section 2 of this project is in theory very well suited to an ECI contract. But there was also a hold point in the contract between parts 1 and 2, which enabled either Welsh Government or the contractor to terminate the contract without penalty. It enabled Costain not to enter into the construction contract without penalty should they have felt that, based on all of the information that they held, their projected outturn cost would not be realistic. That said, 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.
I think it's worth saying that we are satisfied that we have exercised the appropriate level of management and supervision on this project. Construction has already seen 2 million tonnes of earth and rock moved, 2.5 km of retaining wall built, 44 service diversions completed, over 6,000 soil nails installed and 4,000 trees planted. And whilst significant, these short-term impacts need to be balanced against the longer term benefits of this incredible project. I would encourage Members as well to attend the public exhibitions that commenced on 27 November, and to take part in site tours, where more questions can be asked and where they will be answered.