2.10 After the Government announced its intention to proceed with the widening of five sections of the M25 in July 2003 and asked the Agency to carry out further development work, the schemes entered the targeted programme of improvements in April 2004. The Agency's initial 2004 timetable anticipated construction of the first section starting in May 2007 which we consider was a reasonable timetable to aim for. When the Agency drew up its 2004 timetable it had not decided on the procurement strategy. The Agency then decided to widen four of the sections using private finance. It attempted to shorten the procurement timetable by avoiding additional stages in the procurement. However, it spent more time than it had expected preparing the procurement. By May 2005 when it was consulting industry, it had put back its expected construction start to May 2008. The contract was not let, however, until May 2009.
2.11 The procurement started in autumn 2005 around nine months later than the Agency's initial plan. From contract advertisement in November 2005 to award in May 2009 took 42 months compared with a targeted 29 months (45 per cent increase). This slippage, however, included around six months additional time needed to arrange financing during the credit crisis. The Agency's view is that its original timetable, which would have seen the contract delivered before the credit crisis, was demanding for a project of this size and the new issues which had to be addressed. These issues were letting a large road contract where the Agency would be the operator of the road, running a financing competition and developing a new payment mechanism. The Agency's advisers consider that the original timetable was very challenging; the bidders told us, however, that the original timetable was generally reasonable for them. We consider the initial timetable was reasonable bearing in mind the Department also had two years from Government approval in 2003 to work with the Agency to prepare for the procurement before it was advertised.
2.12 The Agency identified its Provisional Preferred Bidder in May 2008, nine months behind schedule. A number of factors contributed to this delay, most of which related to difficulties finalising complex tender documents. There were particular problems around pricing the later upgrade sections, and the operation of the Dartford Crossing (further details on the nature of the delays to the procurement can be found on our website).9
2.13 As a result of delays in both preparing and executing the procurement before the credit crisis, the Agency exposed the project to the risk of changing market conditions for around 18 months longer than its initial timetable, a timetable we judge as having been reasonable.
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