Agenda item

Further to minute 570 of 1 April 2014, the report updates Cabinet on progress to date and seeks approval to proceed to the next stage of the Enterprise Gateway Project.

RESOLVED

1)      Having noted the updated information relating to the capital cost of the project, the operating income and the return on the investment referred to in section 5.3 which is outlined in the Appendix, that the continuation of the project be approved, subject to consultation with the Cabinet Member for Commercial Services and her special adviser.

2)      That £88,500 of the allocated budget be released to appoint an architect and design team consultants to proceed to planning stage and to tender for the construction of the Centre; and that a further report is to be presented to Cabinet on the outcome of the construction tender process.

3)      Following the completed tender process for the operational management that contractor A in the appendix section three (exempt information) be approved as the operational management company, subject to the eventual delivery of the project.

RECOMMENDED TO COUNCIL

Having noted that the total estimated cost of the project is £6,245,860 (details in appendix section 1.0 (exempt information)), that the additional budget of £2,224,860 be allocated from capital reserves.

Further to minute 570 of 1 April 2014, the Cabinet considered the report circulated with the agenda (copy, excluding appendix of financial information, attached to the official minutes).

Mrs Keegan introduced the report. She reminded the Cabinet of the previous history of this project and drew attention to an increase in the total estimated cost of the project to £6,245,860 – an additional £2,224,860. This was largely due to inflation on building costs since the previous estimate was prepared. The proposal now was to proceed to appoint an architect and design team to deliver the Gateway by a single stage Design and Build Contract. To enable this appointment to proceed and take the project to planning permission and tendering of the construction the release of an estimated £88,500 was required. The tenders would be reported to the Cabinet for consideration.

Tenders had also been received for the operational management of the Gateway once built. Details were set out in the exempt Appendix. Contractor A was recommended for appointment and offered a guaranteed income for the first ten years of operation. This took out much of the risk (apart from the design costs) from the investment.

Mrs Keegan explained that she had asked Councillor Josef Ransley to act as special adviser to her on this project because of his particular expertise.

At the Chairman’s invitation, Mr Ransley explained that he had been a strong and consistent supporter of the project. He was, however, concerned at the increase in estimated costs and felt that the report did not contain all the information required for an informed decision. He suggested that a report should be made to Cabinet at design stage, before the construction was put to tender, in order that consideration could be given at that stage to the proposed design and its affordability. He estimated that this would result in a maximum of four weeks delay in the project.

Officers advised against this. It was intended to run the planning process in line with the design and tender process. The project programme was being kept as short as possible against a background of a rapid rise in building costs. Rather than require a further formal report to Cabinet, it was suggested that liaison with the Cabinet Member and her special adviser should establish whether the proposed design was an acceptable and affordable basis for tender, or whether modifications were required. If the Cabinet Member felt that the risks were disproportionate at that stage, she would be able to refer the project back to Cabinet.

RESOLVED

(1)    Having noted the updated information relating to the capital cost of the project, the operating income and the return on the investment referred to in section 5.3 which is outlined in the Appendix, that the continuation of the project be approved, subject to consultation with the Cabinet Member for Commercial Services and her special adviser.

(2)    That £88,500 of the allocated budget be released to appoint an architect and design team consultants to proceed to planning stage and to tender for the construction of the Centre; and that a further report is to be presented to Cabinet on the outcome of the construction tender process.

(3)    Following the completed tender process for the operational management that contractor A in the appendix section three (exempt information) be approved as the operational management company, subject to the eventual delivery of the project.

RECOMMENDED TO COUNCIL

Having noted that the total estimated cost of the project is £6,245,860 (details in appendix section 1.0 (exempt information)), that the additional budget of £2,224,860 be allocated from capital reserves.