Q121 Chair: Have you got confidence in this assessment?
Graham Dalton: I agree that the figure of £193 million should be a net present.
Q122 Mr Bacon: The whole point is that, if it were, it would be-it is difficult to say exactly-significantly lower. Gosh, it might even be £53 million lower and you would have, at best, nought at the bottom, or you would have it going the other way. In other words, this chart was designed to give you the answer you wanted, wasn't it?
Graham Dalton: This chart-it's quite right-has an error.
Q123 Mr Bacon: Did you just say, "quite right"?
Graham Dalton: It was not designed just to give the answer that we wanted. There is an error in the chart about the figures at the time, which the NAO has pointed out, and that is right.
Mr Bacon: But the error is so significant that it completely alters things. You've got £330 million in capital costs and you say, "We'll bung in all the maintenance costs spread over 30 years, we'll stick in £193 million there-that is a nice big chunk off £330 million", and lo, you suddenly find it is more expensive to do the smaller project than to do the bigger project. It doesn't make any sense.
Q124 Joseph Johnson: It is the other way round. You would have produced the negative number, which would have meant that the forecast saving would have been greater. Either way, it's a bogus table, because they're not using net present added figures, but it doesn't mean that it was boosting its own case, I don't think, because the number was in the wrong direction-it has a negative sign on it.
Ginny Clarke: That is what I was going to point out. Some of these are negative signs, so they work in the opposite direction.
The figure at the end is not a summation of widening against hard shoulder. It is about the costs at the time in 2008-
Q125 Mr Bacon: It is the net additional costs of doing hard shoulder running.
Ginny Clarke: No. It is not just the net additional costs. It is the whole cost-
Mr Bacon: That is what it says.
Ginny Clarke: It's the whole cost to the Government of stopping the procurement at that stage, because it took into account the advice that said, "If you change to hard shoulder running, you'll have to stop the procurement and start again." So it included those costs as well. That was the only point that I was going to make. It is, in that sense, trying to look at the whole picture of costs, not just the narrow aspect of the comparison of hard shoulder running versus widening, where quite clearly we had said, "You can deliver hard shoulder running or widening on the same stretch of road for up to 40% cheaper".
Q126 Chair: So have you got confidence in this table?
Ginny Clarke: Yes, I have.
Q127 Chair: I will tell you the other figure that absolutely astounded me was the presumption that if you stopped this suddenly everybody else would charge you more-the £90 million and the £50 million. You believed that at that time, in the middle of the credit crunch, when absolutely everybody was absolutely desperate for construction work, they would shove up their charges. It just seems unrealistic to me.
Ginny Clarke: But that was the view taken about how the market would respond.
Q128 Chair: Your view.
Ginny Clarke: The Department's view, with our financial advisers.
Q129 Chair: Who?
Ginny Clarke: The Department's corporate finance team took that view, because it had a view across lots of projects.
Q130 Chair: Which advisers on this one?
Graham Dalton: That was the corporate finance specialist employed as a member of staff within the Department for Transport.