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Councils battle for £630m for 45 transport schemes

Local government transport projects are in doubt after councils applied for £600 million more than the funding available from the Department for Transport.

Construction News analysis shows that 45 schemes in the DfT ‘development pool’ are seeking twice the £630 million set aside by the department.

This comes after transport secretary Philip Hammond announced government plans to devolve funding decisions to newly established local transport consortia.

The department will make a decision on which schemes will receive funding in December. More than 30 road, bus and tram projects are among the 45 seeking funding.

In February, Mr Hammond announced an expanded development pool of 45 local major transport schemes.

Each local authority was asked to submit a best and final bid this month. The total cost of the 45 schemes is more than £1.8bn - £480m less than under the original bids.

Outside DfT funding, authorities hope they can secure capital through PFI and Tax Increment Financing.

Each council has submitted final bids based on feasibility studies and on the benefit-to-cost ratios, which vary across the development pool.

Maintenance schemes attract a high ratio, as they are building on projects with established benefits.

Norfolk County Council says its £112.5m Northern Distributor Road is a crucial piece of infrastructure that will facilitate other construction work including building more than 30,000 new homes and extensions to Norwich International Airport.

The local authorities have also proposed to set aside hundreds of millions in funding contributions to the 45 schemes, with Devon and Torbay councils more than doubling their contribution to the Kingskerswell Bypass scheme from £12m to £26.5m.

The South-west councils say they will not use PFI funding and will seek early contractor involvement under a traditional design and build contract for the scheme.

The DfT is advising the local authorities not to go out to tender while funding decisions have yet to be finalised but schemes which get approval could move to tender stages as early as 2012.

Each local authority sets out demands it will place on contractors to ensure both cost and community benefits are secured.

Schemes include the Crewe Green Link Road, described in the application process as Cheshire East Council’s number one infrastructure priority.

The council said it had started discussions with Network Rail to appoint a contractor to carry out both rail and road works in the area in an attempt to save costs. The work includes a 1.1 km-long standard two-lane dual carriageway with a central reserve.

A number of councils also highlight ways in which they will attempt to reduce environmental impacts, such as Portsmouth City Council’s application to build a new Northern Road Bridge, following concerns with the existing structure.

The council said it expected its construction contractor to maximise its use of recycling and reuse in construction as well as sourcing plant, labour and materials locally to reduce the carbon footprint of the construction phase.

Derby City Council’s proposal for a replacement for its London Road Bridge has the highest cost-to-benefit ratio outside of maintenance schemes.

The bridge is more than 130 years old and carries 14,000 vehicles every day. The council is in negotiations to bring forward Housing, retail and office developments on land surrounding the bridge which is prioritised for regeneration.

The DfT says it does not have a predetermined set of weighted criteria to judge the relevant strengths of the bids but that a reduction in DfT contribution and percentage contribution will both be important factors.

The greatest cost saving by any council was £91m, in an exercise by South Gloucestershire Council. On average, councils have cut the overall costs of the schemes by more than £10m since February.

 

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