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Winning Construction Work: Wales

Valleys are game for regeneration as nearly £4 billion could be spent in the next five years tackling one of the UK’s most deprived areas. By Karen Thomas

For two hundred years, the Welsh Valleys were an industrial powerhouse with coal and iron ore employing thousands in mining and smelting. Today, the area is an employment black spot. In the Lower Valleys, just 69 per cent of people of working age have jobs, falling to 64 per cent in the deprived Heads of Valleys. The Welsh national average is 71 percent.

But this is being partly tackled by Wales’ largest economic regeneration scheme: the £1.9 billion West Wales and Valleys convergence programme across 15 local authority areas. The money has been allocated from 2007-2013 and match funding could boost spend to £3.8 billion. The priorities are strategic infrastructure and regeneration of town centres.

With the Valleys among the most deprived UK regions, regeneration funding drives significant construction. Several European, UK and National Assembly Government-backed projects are underway. The European Regional Development Fund’s £140 million, 15-year Heads of Valleys programme has allocated £34 million to date.

Other funding comes from the £7 million Social Enterprise Support project, a five-year programme to identify gaps in services. Funded by the Welsh Assembly Government (WAG) and the EU, it aims to create more than 50 small businesses. Another fund supporting SMEs, to include construction firms, is the EU’s £13 million Business Growth project.

One of the largest regional regeneration projects is The Works, a £300 million joint venture between Blaenau Gwent council and WAG to redevelop the former Corus site in Ebbw Vale. The plans include the £53.7 million hospital, Ysbyty Aneurin Bevan (see below).

Work under way

The Glenigan database values the top 100 active construction projects in the Welsh Valleys in March 2009 at £1,108.1 million. The top 30 projects are worth £927.2 million, concentrated in road, healthcare and residential construction.

Transport and roads – £464 million

Five major road and transport projects, for clients the WAG, Rhondda Cynon Taff County Borough Council and Caerphilly County Borough Council, have a combined value of £464 million. Not included is the Port Talbot peripheral distributor road (PDR) scheme. In March, Neath Port Talbot council appointed Costain to oversee its third phase (see box).

Other forthcoming transport projects include a WAG pledge of £39 million to improve roads and cycle paths in the borough of Rhondda Cynon Taf. This includes £37 million for the Church Village bypass.

Healthcare and medical – £201.1 million

Under the Welsh Health Estates Framework, WAG will allocate £170 million to healthcare construction across the 15 NHS trusts in Wales over the next decade. Initiatives are under way to fast-track procurement for Welsh public healthcare projects to 2015. Designed For Life comprises some 25 priority hospital projects.

With a third of the people in the Valleys diagnosed with at least one long-term illness, improved healthcare provision is a key regional priority. Glenigan lists six major regional projects.

North Glamorgan NHS Trust is spending £63.1 million on a community hospital with 126 beds at Merthyr’s Prince Charles Hospital. The main contractor is Norwest Holst. The trust also has three refurbishment projects at Prince Charles Hospital. Gwent Healthcare NHS Trust is building the 96-room, 10,000-sq metre Aneurin Bevan Hospital on the former site of Ebbw Vale’s Corus steelworks. BAM Construct UK is the main contractor on the £48 million project.

BAM is working on a second new hospital for the Trust. Not yet listed, Ysbyty Ystrad Fawr in Caerphilly is a £170 million project to deliver 255 beds by 2011.

Housing – £116.3 million

Housing accounts for a third of the Valleys’ 30 top construction projects by number, but just 12 percent by value – despite a chronic regional housing shortage. Wales saw a 76 per cent drop in construction of new homes in the last quarter of 2008. WAG is unlikely to meet its national target of 6,500 affordable new homes by 2011. However, it has allocated a record £500 million a year to social housing from 2009-2012, injecting £42 million from the Strategic Capital Investment Fund.

Local authorities must improve and refurbish run-down public housing to Welsh Quality Housing Standard (WQHS) by 2012. Where they lack the funds or will to upgrade housing stock, they must transfer ownership to housing associations.

Bridgend has transferred its stock to Valleys To Coast Housing, Rhondda Cynon Taf to RCT Homes, and Torfaen to Bron Afon Community Housing, which has £22.3 million of work underway. Merthyr Tydfil transferred its stock to Merthyr Valley Homes in January. Caerphilly is reconsidering its options after new surveys, and Neath Port Talbot expects to ballot its tenants this autumn.

Blaenau Gwent tenants are being balloted on a transfer to Tai Calon Community Housing, which promises to spend £111 million on refurbishment over five years. The council says a ‘no’ vote will force it to cut jobs and services to claw back £83 million to meet the WQHS targets.

Energy – £34 million

Sustainable energy is high on the list of priorities for both WAG and Whitehall, and Wales is positioning itself as a centre for alternative energy. Three wind farms are under construction according to Glenigan; two at Ferndale and one in Pontypridd. And still more are under discussion.

One of the largest and most disputed is Nuon Renewables’ proposal to build 100 wind turbines, each one 475 ft tall, along a 105,000 sq km stretch of hillside between Tonmawr, east of Neath, and Maerdy. Public consultation began in March.

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