Motorway telecoms procurement was three years late and five times over budget

Public Accounts Committee report reveals extent of over-run - but implementation project was a success

Highways Agency procurement costs over-ran

A procurement of telecommunications equipment to run alongside UK motorways took nearly three times longer and cost five times as much as the Highways Agency originally expected, according to a report from the Public Accounts Committee (PAC).

The agency aimed to complete the procurement in 21 months for a cost of £3m, but actual purchasing took more than five years to complete and cost £15.5m in advisers' fees.

Most of the additional time and cost was incurred in meeting the agency's requirements for high-quality bid documents, according to PAC chairman Edward Leigh.

"The procurement process itself was conducted with great attention to detail, contributing to a fall in the bid price paid by the selected bidder," he said.

"But the process dragged on for five years, rather than the two originally expected - an early casualty was competitive tension when well-qualified potential bidders opted out of the competition."

The high cost of advisors came about because Highways Agency staff did not have the time to check on what work was being done until it was too late.

In September 2005, the agency eventually signed a £385m, 10-year contract for the National Roads Telecommunications Services (NRTS) with Genesys Telecommunications.

From October 2007, following a two-year upgrade of the telecommunications systems, the new services became operational and benefits for road users from other agency projects dependent on the NRTS are beginning to be realised, the report found.