1. Given the announced 23 per cent overspend on the project to dual the A465 between Abergavenny and Hirwaun, will the Cabinet Secretary confirm where the additional resource to fund this will come from? 73

The increased expenditure is spread over three financial years between now and the end of construction. Future budget profiles will reflect these increases. 

I thank the Cabinet Secretary for his answer. We've heard from businesses, of course, who will face financial difficulty due to delays. There are the obvious frustrations and inconvenience to residents. Can I ask: when did you become aware that the project would likely go into an overspend situation? What provisions were made by the Welsh Government to cover the potential cost overruns of the scheme? Also, if the Welsh Government is liable for a proportion of the total cost of the overspend, what is that proportion? If you don't know what that figure is, can I ask why not? How was a procurement contract agreed for a project of this scale without your Government protecting taxpayers from an overspend that they're not responsible for, if that's the case? In addition, I want to ask what independent technical advice was sought by the Welsh Government in relation to many of the complex challenges associated with the scheme, importantly before the tendering specification was drawn up.

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. 

Cabinet Secretary, no-one would disagree that this is a very challenging engineering project and that it will be a very fine stretch of road when it's complete, but nonetheless there are concerns across Wales and within this Chamber, but certainly locally with local residents I've met, and I think some of their fears would have been confirmed by the recent revelation about the 23 per cent overspend. For a long time now, there have been complaints made to me about Costain, the contractors, operating within a slacker fiscal regulatory environment than local residents would see fit. So, I think if you could revisit this and your arrangements for Costain—. I hear what you say—that they are more liable to bear more of the risk than the Welsh Government is, and that's to be welcomed if that's the case, but currently, certainly in the local area, there are real concerns that there doesn't seem to be the sort of tight hold on the finances of this project and, indeed, on the deadlines for completing the project that we would all like to see. So, if you could review that, that would be very appreciated. 

I'd agree with the Member. I've already asked for a lessons learned analysis to be conducted by officials. I think the call for tighter regulatory controls over the costs of this project are fair. And also I'd agree with the Member that this is a particularly fine piece of road; in fact, it's going to have the biggest concrete arch of its kind anywhere on the planet. It will be a project that we can be proud of. I do sympathise with all of those people who are suffering as a consequence of delays, but it will be a major construction project that Wales will be proud of.    

It does seem as if interest in this particular scheme is coming from these benches, given that it's the biggest capital spend that the department has at the moment, and that the cost overrun running into excess somewhere north of £50 million is something that has to be managed. I do welcome the Minister's engagement today, and it is sad that the didn't give an oral statement when this first became a problem. I would ask the Minister if he could confirm whether he is confident that whatever proportion of the overspend will have to be met by his department—and he's indicated that it will be spread over three years—that additional moneys will be secured from Welsh Government reserves rather than the existing budgets having to be hollowed out to make up this overspend, because other projects around Wales—and I look at my own area, South Wales Central, which has a consultation at the moment about improving links to the M4, and also proposals around the Dinas Powys bypass—such projects, if these many millions of pounds have to be spend for the completion of the road, could be called into question. 

Can I thank the Member for his question, and just remind Members again that this huge undertaking will open up the Heads of the Valleys for further economic development and prosperity? It's our intention, first of all, to minimise exposure to the Welsh Government and therefore to taxpayers as a consequence of the excessive costs, but once the level of Welsh Government's liability has been confirmed, decisions will then be made on how best to fund any shortfall, recognising what the opportunity costs of this increase will be. Future budget profiles will reflect these increases so that the impact can be considered as part of the ongoing delivery of the national transport finance plan. 

Thank you, Cabinet Secretary, and the next question is from Rhun ap Iorwerth.