Balfour Beatty - Highways Asset Management Highways Agency Area Map

Balfour Beatty Mott Macdonald - Area 10

Connect Plus Services (CPS) – Area 5 BalfourBeatty/Atkins/Egis JV

Balfour Beatty Mott Macdonald - Area 4

2 M25 – An introduction M25: in the beginning...

M25 the Beginning......

1937 1960 1973 1973 1975 1986 1990 2004 2009

Secretary Contract First 2 GLC Official of State Awarded Original Work sections of Contract developed Ringways opening of announced for Idea of an began on the M25 Awarded the London Plan the M25 by widening to widening Orbital Ringroads were To Connect Ringways Cancelled Margaret 4 lanes works road 3 & 4 opened Plus Plan Thatcher (J11-15, (J11-15, J23-24 J7-10) J7-10)

4 The Facts... The M25... • 200 km long - one of the world’s longest orbital • Carries 15% of all UK motorway traffic motorways plus 200 km of ‘stubs and tails’ • Hub of UK’s motorway network • One of Europe’s busiest motorways • Ring road around London & local • Not a continuous loop (Dartford Crossing) commuter route • 5 tunnels and the QEII Bridge • Access to 2 of the world’s busiest airports The HA and Connect Plus

• The largest ever contract with the HA (£6.2bn) - awarded to Connect Plus (May 2009): o To widen the motorway (Sections 1 and 4) & refurbish Hatfield Tunnel o Operate and maintain the network for 30 years Contract Award in uncertain financial markets Designed to meet the demand and plan for growth – working towards journey time reliability and improved road user safety

Lenders & Shareholders

Highways Agency

Connect Plus Lenders Balfour Beatty 40% Skanska 40% 28 Commercial Banks + EIB Atkins 10% Egis 10%

Skanska Balfour Beatty Connect Plus Supply Chain Connect Joint Venture Plus Skanska 50%, Tarmac Lafarge Services Balfour Beatty 50% Aggregate Industries Balfour Beatty 52.5%, Balfour Beatty Atkins 32.5%, Egis 15% Atkins (Design) Jacksons Civils

Widening Works Lifecycle works Operation & Maintenance The Works M25 – Additional capacity

• Carries 200,000 vehicles per day • Initial widening (IUS) (against an expectation of 88,000 per day) – Section 1 (J16-J23 )

– Section 4 (J27-J30)

• Congestion causing unreliable journey • Subsequent widening (LUS) times & risk of accidents – J5-J6/7 and J23-J27 Operation and Maintenance

Lenders & Shareholders

Highways Agency

Connect Plus Lenders Balfour Beatty 40% Skanska 40% 28 Commercial Banks + EIB Atkins 10% Egis 10%

Widening Works Lifecycle works Operation & Maintenance Operations & Maintenance

South Mimms RCC

South Mimms Blunt’s Farm

Denham

Scratchwood

Dartford Crossing Scope Key Facts • Routine Maintenance • £60m annual contract with CPS • Incident Response Sunbury • 650 staff / 7 depots including Dartford • Asset Management (linear assets) • 2 control centres (CPS) interfacingSwanley with HA RCCs • Winter MaintenanceLeatherhead • 400km network • Charge Collection (Dartford) • 5 tunnels and QEII bridge • Network Occupancy Management • Meeting over 300 KPIs and 5 ‘Paymech’ Godstone RCC components

12 12 Dartford Crossing

Bridge (1991) Tunnels Key Issues 137m long cable-stayed • West Tunnel (1963) • Dangerous Goods 2004/S4/EC • East Tunnel (1980) • Over height vehicles Over 150,000 vehicles per day • EU Regulations tunnel use the crossing improvements include equipment, £70m per year revenue signage & emergency exits • Move towards Free Flow charging 30% revenue collected (2014) electronically (Dart Tags) Asset Management

Lenders & Shareholders

Highways Agency

Connect Plus Lenders Balfour Beatty 40% Skanska 40% 28 Commercial Banks + EIB Atkins 10% Egis 10%

Widening Works Lifecycle works Operation & Maintenance Definitions & Requirements • 400 linear KM • 13 Asset Categories • Circa140,000 Assets • 56 Strategic Assets (Key Bridges and Tunnels) Asset Management Challenges

£60 • Inherited aging asset (‘brown filed site’) in 2009. £50 Assets will continue to deteriorate over 30 year commission Miljoenen £40 £30 £20 • Fixed £1.1bn (2007 prices) budget for renewals over 30 years based on tender assumptions– £10 cannot spend more than we have and some £0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 assumptions may not hold Year

• Changes in climate, traffic volume and population / demographics will impact on asset deterioration

• Tender assumed that we would innovate & implement a whole life approach

• Strict rules for governing Handback at year 30.

Renewals Expenditure Profile

(All Renewals excl DI) All Renewals (Excl DI)

50,000,000 Tunnels Civil (DBFO Co) Tunnels M&E & Dartford Tolling (O&M Co) 45,000,000 QE2 Bridge Pavements Structures 40,000,000 Ancillaries (O&M Co) Ancillaries (DBFO Co) 35,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Annual Spend £

Handback

• Countless different scenarios for achieving Handback across 140,000 different assets (condition, expenditure and lane closures)

• Our challenge is to…

• Optimise forward work plan within these constraints and others (i.e annual draw down and performance requirements)

• Manage aging asset and changing network and environment

• Take the HA and shareholders on the journey

Innovation Innovative survey techniques to understand asset condition New techniques to address challenges – Energy Reduction New delivery techniques – fine milling and asphalt preservation New delivery techniques – Maurer Joints

26 Any Questions?

Questions