Organisations representing utilities and their contractors have expressed serious concerns about plans by the Department of Transport (DfT) to introduce harsher penalties for utilities who overrun their time limits on disruptive road works.

The organizations were responding to the announcement by Transport Minister Sadiq Khan MP that utility companies who do not finish their road works on time will face increased charges under the new plans.

The current maximum daily charge is £2,500, but the Department of Transport has proposed that in order to encourage companies to complete works on time, “increases to as much as £25,000 may be justified”.

Also proposed are lane rental schemes for those companies wanting to carry out works on the busiest roads and good practice guidance for councils and utility companies.

The new plans were drawn up after the Department for Transport hosted a street works summit with road user groups, utility companies, bus operators and local authorities in October 2009.

Sadiq Khan MP said:

"Everyone knows that road works are necessary to keep essential infrastructure in good order but councils and utility companies need to keep disruption to a minimum for the travelling public.

"Each year road works cost our country £4.2 billion - this is unacceptable and unaffordable.  Some contractors are showing a blatant disregard for the needs of road users which is why I am proposing to increase the maximum fines for utility companies who let their road works overrun as well as putting forward proposals to charge companies for carrying out work on the busiest routes where disruption affects the most people.

"We want to ensure that utility companies and local authorities are doing everything they can to reduce disruption whether this means working with bus operators to ensure they have enough notice to plan alternative routes or improving communication with commuters and local residents affected by road works."

Utilities concerned over harsher penalties

In a statement, the National Joint Utilities Group (NJUG) whose members include Water UK (representing water and waste water companies), the Energy Networks Association (representing electricity and gas companies) and many of the UK’s leading construction companies, said it was disappointed that the Government was planning to impose further regulatory changes upon the utility industry.

The NJUG said that there continued to be a focus on penalising utilities and little effort to drive improvements in works carried out on behalf of highway authorities - which it said were responsible for half the disruption attributed to street works.

Les Guest, Chief Executive Officer of NJUG, said:

“NJUG fully recognises that utility companies, like highway authorities, have a key role to play in reducing the unfortunate disruption that street works can sometimes cause."

"NJUG does not object to the principle of overstay charges as a way of incentivising utilities and their contractors to finish street works on schedule. However, no evidence has been provided to demonstrate the need for such a massive increase in charges”.

NJUG has called for a robust cost benefit analysis to be carried out to determine whether the new proposals announced by the Department for Transport (DfT) would deliver net benefits, over and above improvements expected from measures that are already due to be implemented over the next few months, such as street works permit schemes.

Government "pre-judging outcome"

The organisation also expressed surprise that the government appeared to be prejudging the outcome of the consultation on their proposals since the DfT announcement today declared both an intent to consult and implement regulatory measures.

NJUG  said it was not aware of any research commissioned by Government to support a lane rental policy, and that the last trials commissioned by Government in 2003/04 had indicated large increases to consumer bills for very little reduction in the duration of works. The Government had also not given any indication that it had involved economic regulators in their decision to pursue a system that would increase the operating costs of utilities, and ultimately raise consumers’ bills.