2.23 DVTA's decision to procure new test equipment was influenced by a number of EU Directives that had either been issued or were pending (see paragraph 1.4). These contained requirements to test three key items (headlamp beam alignment, diesel smoke emissions and catalytic converters) to increasingly stringent standards. Consequently, bidders for the PFI contract were required to demonstrate that their proposed testing solutions met all the standards and requirements of both EU and domestic legislation.
2.24 Although installation of the new equipment was completed at all test centres in September 2003, DVTA only introduced mandatory testing of headlight beam alignment in March 2005. Furthermore, it did not commence smoke emission and catalytic converter testing to the standards laid down by current domestic and EU legislation until March 2006. Consequently, until this date, DVTA was testing vehicles to a less stringent standard than the rest of the United Kingdom.
2.25 DVTA told us that it did not introduce headlamp alignment testing to the standards operated in Great Britain until March 2005, because early research had shown that the failure rate would be very high. DVTA said that this testing would not have been practical against the background of the 2004 industrial action (see paragraph 2.4 above), as it would place a further strain on waiting times, which were already at very high levels. The introduction of this testing had the potential to place considerable further strain on DVTA's capacity, as evidence from testing in the Republic of Ireland indicated that the initial failure rate was in the region of 65 percent, reducing to 12 percent as the testing standards required became more fully established.
2.26 However, DVTA said that preparatory steps it took, including publicity and extensive liaison with the garage trade, had resulted in the failure rate for the new headlamp test increasing by only three per cent (to 26 percent compared to 23per cent for the previous test), minimising the impact on its capacity. DVTA also told us that improvements introduced by the contractors had allowed it to identify potential failure rates and plan accordingly for them.
2.27 Although currently required by domestic legislation4, the introduction of mandatory testing of smoke emission levels and catalytic converters on a pass/fail basis was deferred, pending resolution of specific problems associated with the first stage of the vehicle test, and with the lengthy times being taken to complete the overall test. Although these are still unresolved, DVTA introduced the test fully in March 2006.
2.28 DVTA told us that, although the contractors had offered to make some amendments to the first test stage (i.e. smoke emissions and catalytic converters - see Appendix 3), the extent to which these would deliver the improvements required was not apparent, and stringent conditions had been attached to this offer (see paragraphs 4.11 and 4.12). While there is the potential that considerable additional expenditure will be required to resolve the problems encountered (see paragraph 4.14), the financial implications for DVTA and the contractors will not be fully apparent until negotiations are concluded.
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4. Statutory Rule No 517 (2003).