Docklands' pounds 450m road tunnel 'should not have been built'

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Indy Politics

Transport Correspondent

The most expensive road in Britain, a 1.1-mile dual tunnel in east London's Docklands, cost nearly pounds 450m of public money to build, and was constructed despite appearing to have no economic benefit, a National Audit Office report published yesterday reveals.

The Limehouse Link, a tunnel under Limehouse basin opened by the Prime Minister in May 1993, was built by the London Docklands Development Corporation as part of the regeneration of the area. The construction costs were originally put at pounds 141.5m in 1988. However, the price steadily rose, and by the time tenders were accepted, the LDDC estimated the cost would be pounds 227.6m.

Because of difficult ground conditions, onerous noise restrictions and problems with design, costs rose again to pounds 293.3m. Some problems were a result of "deficiencies in the tender process" and poor management. The contractors were paid pounds 9m just for finishing on time.

In addition to construction, the NAO estimates there were further costs of pounds 155.3m for acquiring the land and rehousing local residents. The final cost of pounds 448.6m is about two-thirds of what BR invests annually.

If the project had been assessed under the normal cost benefit analysis used by the Department of Transport, it would never have been built. When its feasibility was first examined, the cost was estimated to be pounds 91m but even at that price it failed to show positive economic benefit. However, the LDDC pressed ahead because of the supposed regenerative effect of the road.

According to the NAO, the LDDC was under pressure from Olympia and York, developers of Canary Wharf, to build the link as the firm had made clear "their view that a delay in constructing would be unacceptable".