PAPER E

Purpose : for Decision

REPORT TO THE EXECUTIVE

Date : 19 NOVEMBER 2003

Title : HIGHWAYS CAPITAL PROGRAMME

REPORT OF THE PORTFOLIO HOLDER FOR TRANSPORT - TAKEN UNDER RULE 15 URGENCY PROVISIONS

IMPLEMENTATION DATE: 1December 2003

SUMMARY/PURPOSE

1. To approve the following changes to the Highways Capital Programme:

· Delivery of a £600,000 programme of urgent safety works to mitigate the effects of subsoil shrinkage on the highway network

· Capitalisation of £100,000 of appropriate revenue works to allow sufficient revenue budget for the remainder of the year.

· A £400,000 contingency requirement for the increased cost of Ventnor Haven Works.

· Deferral of a number of capital schemes within the Highways Capital Programme to next financial year 2004/2005. The deferred schemes will all receive high priority for 2004/2005 and will have first call on the capital budget available.

· A bid to the Government Office for the South East for additional funding allocations for the exceptional circumstances created by the weather conditions in the summer of 2003.

URGENCY

2. This report does not appear on the forward plan and is being taken as an urgent item under Rule 15 Access to Information Procedure Rules. It did not appear on the forward plan for November 2003-February 2004, published in October 2003 because the severity and magnitude of the shrinkage cracking has increased significantly over the last few weeks. It cannot wait until the publication of the next forward plan (for December 2003-March 2004) because urgent repair works are needed to restore highway safety and prevent accelerated deterioration of the road structure.

CONFIDENTIAL/EXEMPT ITEMS

3. None.

BACKGROUND

4. Shrinkage Cracking

Several sections of the Island’s highway network have suffered extensive

shrinkage cracking and deformation arising from the drought conditions of the 2003 summer. The dry conditions have reduced the moisture content of underlying shrinkable clays, resulting in subsoil shrinkage and damage to carriageway surfacing.

The scale of the problem has been assessed at £1.6 m and a large number of remedial schemes are necessary to mitigate the effects of the clay subsoil shrinkage across the Island. The works have been prioritised in view of the shortage of available funds and costed. Budget estimate for the urgent high priority remedial work which can be achieved is £600,000.

Further remedial work will be necessary at several other sites next financial year. This is likely to have an adverse effect on the Council’s LTP obligations. Representatives from the Government Office for the South East (GOSE) have been invited to the Island to view the scale of the drought damage to the highway network and to discuss the Council’s requirement for additional capital funding.

5. Capitalisation of Appropriate Revenue Schemes

The highways maintenance revenue budget has historically always been set at a low base, although it must be acknowledged that the Council is still spending at 13% above the highway maintenance FSS of £3.818m in the current financial year. This year the high demands on the budget have made it necessary to capitalise £100, 000 of appropriate work to ensure the availability of revenue funding for reactive maintenance to the end of the financial year.

6. Ventnor Haven Project

The Ventnor haven project was completed in early August 2003. The original estimated cost of the project was £2,070,000. Funding for the project was obtained from the government’s Single Regeneration Budget Round 2 (£1,240,000) together with a fixed contribution from Defra as coast protection grant aid (£235,000) with the remainder being funded by the Council.

The final cost for the project, comprising construction works, investigations and studies and contract supervision is £2,476,953; this follows the conclusion of negotiations with the contractor this week. The budget shortfall is £406,953, which takes account of the sharing of the additional construction costs over and above the ‘target cost threshold’; a condition of the contract. However a significant part of the scheme required environmental and geotechnical investigations which will aid the development of the IW Undercliff Coastal Defence Strategy Study which is grant-aided by Defra. This will save consultancy fees to the value of £30,000 on the Study and will allow a reduction in the fees expenditure on the haven project of the same amount. The net additional expenditure is, therefore, £376,953.

As part of the Council’s contribution to the capital cost of the sum a sum of £100,000 was approved from land sales / leases achieved by 31 March 2004. A lease for regeneration of a site on the Eastern Esplanade has been made for the sum of £100,000 but this will be paid in five annual instalments of £20,000.

The principal additional items of expenditure were :

· The payment of a 20% tax on rock armourstone as part of the government’s Aggregate Sustainability Levy; this amounted to approximately £88,000; an increase of 4.2% on the overall project cost.

· Additional rock armourstone required due to depressions and soft areas of seabed; it was not economic to arrange barge transport for the additional rock and, therefore, it had to be imported by road at a higher unit cost; weather-related costs, removal of accumulated silt during construction phase and other minor amendments to contact specification - £194,548 (net tender cost increase of 10.5%); an increase of 9.3% on the overall project.

· Additional costs for technical studies and environmental mitigation work required by English Nature and the subject of planning conditions - £124,405 (less £30,000 described above) leaving £94,405; an increase of 4.5% on the overall project budget.

The Ventnor haven scheme was first approved for SRB funding in 1996. Protracted negotiations over environmental issues following the designation of the coastal waters off Ventnor as part of the South Wight Maritime Special Area of Conservation meant that the scheme was held up for nearly four years pending resolution of these issues to the satisfaction of English Nature. Environmental mitigation was finally resolved in early 2002 / 03. Resulting planning conditions required the translocation of reef boulders from beneath the footprint of the harbour arms and within the haven to an alternative location in order that the various species of seaweed and lichens could be adequately safeguarded; the Council is required to monitor performance of the environmental scheme for the next five years. The project supervision and environment management elements required a significantly greater input than envisaged.

If the scheme had not proceeded last autumn the Council would have been required to repay to the Government’s Challenge Fund the costs of technical investigations, environmental studies and detailed design fees totalling nearly £400,000, incurred between 1995 / 96 and 2002 / 03. The haven scheme is already making a significant contribution towards the regeneration of the town of Ventnor.

The Coastal Manager is actively pursuing opportunities for additional funding to assist in mitigating the shortfall but further resources cannot be guaranteed at this stage. For this reason the Head of Engineering Services is seeking contingency funding from the Capital Programme.

7. Deferral of Capital Schemes

In order to accommodate the unforeseen pressures on the highways capital budget as outlined above, the delivery of a number of capital schemes within the Highways Capital Programme will need to be deferred to next financial year 2004/2005. The deferred schemes have been identified in accordance with the Council’s Priority Ranking Assessment methods and will all receive high priority for 2004/2005 .

STRATEGIC CONTEXT

8. Private Finance Initiative for Highways Asset Management

Even before considering the recent and ongoing effects of subsoil shrinkage due to the drought conditions, the condition of the Island’s highway assets was well below standard. Current levels of funding will not make it possible to achieve the national objectives of arresting the decay of the network by 2005 and removing most of the maintenance backlog by 2011.

There is a high national demand for conventional capital funding for highway maintenance, as all responsible local authorities endeavour to address their maintenance backlog. It is considered essential that areas of additional funding are identified, with the potential to deliver better value for money in order to halt the deterioration of the Island’s highway assets.

Many local authorities are now exploring areas of additional funding for highways management projects, particularly PFIs. In this context, an outline PFI business case is currently being prepared for the Isle of Wight Council by consultants Mott MacDonald and this is being funded from existing budgets then a full business case will need to be part of a tendered exercise.

CONSULTATION

9. Specialist advice has been obtained from other similarly affected Local Authorities and from contractors experienced in highway remedial works. This is in order to establish the full range of remedial works being undertaken elsewhere, and whether there are any innovative and cost effective solutions or proprietary treatments that will provide appropriate solutions to the problems being experienced.

FINANCIAL/BUDGET IMPLICATIONS

10.

Additional Requirements £

Urgent Remedial Works 600,000

Ventnor Haven Contingency Requirement 400,000

Capitalisation of Revenue Work 100,000

£1,100,000

Sources of Funding

Deferral of Capital Schemes 880,000

Military Road Savings 220,000

£1,100,000

LEGAL IMPLICATIONS

The council has a duty to maintain the highway and can be liable for failure to so do. The recommended amendments to the capital programme are the result of applying a risk analysis to existing planned works and the newly emerging need to repair cracking.

The contingency for Ventnor Harbour represents contractual obligations to the various contractors necessary to deliver the scheme.

OPTIONS

11. (a) To approve the proposed changes to the Highways Capital Programme.

(b) To amend the proposed changes to the Highways Capital Programme.

EVALUATION/RISK MANAGEMENT

12. It is recognised that an alteration to the approved 2003/2004 Highways Capital Programme involving deferral of a significant number of capital schemes to the following financial year might affect the Council’s ability to achieve the targets and objectives set out in the LTP. This in turn might adversely affect future LTP capital settlements. As previously mentioned, representatives from the Government Office for the South East (GOSE) have been invited to the Island to view the scale of the required remedial works and to discuss the Council’s requirement for additional funding.

RECOMMENDATIONS

13. That option (a) is approved.

BACKGROUND PAPERS

14. Report to Informal Executive. 30 July 2003.

ADDITIONAL INFORMATION

15. Appendix A. List of urgent remedial schemes for sites affected by clay shrinkage and heave.

16. Appendix B. Required adjustments to the Capital Programme to accommodate urgent remedial schemes

S MATTHEWS Head of Engineering Services

E FOX Portfolio Holder for Transport

APPENDIX A

REMEDIAL WORKS
ROAD NAME	TOWN	AREA	CLASS	BUDGET ESTIMATE
Ashey Road	Ryde	2	C	75,000
Beaper Shute	Brading	3	A	2,500
Brading Road	Ryde	3	A	7,000
Carters Road	Ryde	2	C	10,000
Clarence Road	Wroxall	5	B	20,000
Fairlee Road	Newport	8	A	5,000
Forest Road	Newport	8	A	5,000
High Street	Whitwell	5	C	18,000
Leeson Road	Ventnor	5	A	7,000
Main Road	Brighstone	6	B	15,000
Main Road	Havenstreet	2		95,000
Medina Way	Newport	8	A	7,000
Newport Road	Godshill	5	A	5,000
Newport Road	Ventnor	5	B	15,000
Quarry Road	Ryde	2		5,000
Rew Street	Gurnard	1	C	20,000
Rowborough Lane	Brading	3	A	15,000
Sandown Road	Bembridge	3	B	5,000
Smallbrook Lane	Ryde	2	C	37,500
Station Road	St Helens	3	B	5,000
Stroud Wood Road	Ryde	2	C	17,000
Whiteoak Lane	Porchfield	7	C	12,000
Whiterails Road	Newport	1	C	60,000
Yarmouth Road	Shalfleet	7	A	120,000
Park Road	Wootton			17,000
TOTAL				600,000

APPENDIX B

POTENTIAL CAPITAL SAVINGS

Structural Maintenance of Carriageways

Sandown Road, Lake

Bridges and Structural Maintenance

Horringford

Ponda Rosa Bridge

Park Road, Wootton

Pedestrian Improvements

Rights of way signing

High Street, Wootton

The Mall, Brading

High Street, Ventnor

Safety Schemes

A3055 Lake Hill/Fairway

Upton Road, Ryde

Canteen Road, Whiteley Bank

Public Transport Provision

Hunnyhill-Parkhurst Road Bus Link

Unallocated less over commitment

Adverse Weather Works

Chimney Steps/Leeson Road

Other Schemes

Baring Road Traffic Calming

Advance Design Unallocated

Design, Ryde High Street