A major highways improvement scheme on the A38 in Somerset is facing a six-month delay after North Somerset Council decided to put part of the project back out to tender following a construction price that exceeded its budget.
The council is preparing to retender the £24 million A38 highways package after the construction price submitted by appointed contractor Octavius proved too high.
Octavius was appointed in 2025 under a two-stage design and build arrangement to develop the scheme and agree a Stage 2 construction price. However, council papers reveal that its estimate significantly exceeded both the original budget assumptions and the approved funding position.
An independent benchmarking exercise by cost consultant Rider Levett Bucknall found that the difference could not be fully accounted for by inflation, utility diversions, traffic management, design changes or supply chain pressures.
North Somerset Council had anticipated around £18 million for construction in its original tender assumptions. Its latest benchmarking puts the construction cost at £23.7 million, with total forecast delivery expenditure rising to £33.4 million once utility diversions, project management, council costs and contingency are included.
The council is now proposing to abandon the target-cost approach and retender the construction works under a fixed-price NEC4 Option A contract.
A break clause in the original agreement with Octavius allowed the council to retender the construction phase if the agreed price proved unacceptable.
A new procurement exercise is expected to begin in January, with bids assessed in April and a replacement contractor appointed in May or June. Construction is now anticipated to start in summer 2027, around six months later than originally planned.
The wider A38 programme covers improvements at nine locations between Barrow Street junction at Barrow Tanks and Edithmead Roundabout, near M5 Junction 22, although the North Somerset procurement covers five locations, including areas around Bristol Airport, Langford and Sidcot.
North Somerset Council Leader Councillor Mike Bell said:
“I’d like to thank the UK Government for funding these A38 improvements. This comes after years of hard work developing our business cases and we now look forward to moving forward with the work.
“The improvements are part of plans to maintain and improve our transport network as the region’s population grows. Not only will the A38 project improve capacity on our roads, making journeys smoother, safer and more reliable, but the project also includes sustainable options for getting around such as the widening of walking and cycling paths and improvements to the existing crossings for the Strawberry Line.”
He added that creating capacity and providing more travel choices was essential as North Somerset prepared for future population growth and continued to invest in transport links supporting education, leisure and economic prosperity.
The programme also includes a number of improvements within Somerset Council’s area.
These include capacity improvements at Edithmead Roundabout, where traffic signals will direct the heaviest traffic flows through the centre of the roundabout, alongside a signalised cycle crossing on the B3140.
Safety improvements are also planned at Rooksbridge and Cross, while visibility and signage will be enhanced at the Strawberry Line crossing.
Somerset Council’s Lead Member for Highways and Transport, Councillor Richard Wilkins, said the programme was great news for Somerset and the wider region.
“The A38 is a critical transport artery and we have worked hard with colleagues at North Somerset over a number of years to secure the vital Government funding to make these improvements a reality. This helps to ensure our infrastructure is futureproofed for years to come, with improved connectivity across the region.”
He said the work at Edithmead would provide additional capacity to support economic and residential growth while helping to prevent peak-time queues on the M5, with important safety improvements planned elsewhere.
Roads Minister Justin Madders said the investment would make journeys more reliable, reduce congestion and improve safety for pedestrians and cyclists through wider paths and new crossings.
He added that investment in key routes such as the A38 was helping to strengthen local transport networks, improve connectivity and support growth across the region.
On the Somerset section, contractor Centregreat will deliver the Edithmead improvements, having been appointed through its contract for the recent Dunball Junction 23 scheme. The remaining Somerset works will be delivered by the council’s existing infrastructure partner, Octavius.
Despite the procurement setback in North Somerset, the wider programme remains an important investment in improving capacity, safety and sustainable travel along one of the region’s key transport corridors.
(Picture: Mapillary)
