North Yorkshire Council
Executive
15 July 2025
Harbours Infrastructure - West Pier
Inner Sheet Pile Strengthening
Award of Contract
Report of the Assistant Director
– Regulation and Harbours
1.0 PURPOSE
OF REPORT
1.1
To inform the Executive of an
ongoing former Scarborough Borough Council legacy harbour project
to repair a section of the inner West Pier in Scarborough and
consider a proposal to award a construction contract to Neom
Engineering Limited.
1.2
To request Executive to approve a
capital budget of £1,840k to carry out the repair
works.
1.3 To
request the Executive to approve the award of the second stage
construction contract to Neom Engineering Limited.
2.0
SUMMARY
2.1 The
report informs the Executive about the ongoing harbour project for
the inner West Pier in Scarborough and proposes awarding the
construction contract to Neom Engineering Limited.
3.0
BACKGROUND
3.1 West
Pier is the main fishing area in Scarborough where catches are
landed, and fishing vessels are moored. The pier has been formed
using steel sheet piling which dates back to the late
1980s.
3.2 The
steel sheet piles have suffered from corrosion including loss of
thickness and holes but are not beyond their serviceable life. The
piles can be repaired, which will extend the life of the piles by
10 years.
3.3 The
repair proposal is to weld sheet steel plates to the piles and then
provide a cathodic protection system below water and a protective
paint coating above water.
3.4 In
October 2023 the Council employed Neom Engineering Limited through
an open tender process. This is a two-stage design and build
procurement where the contractor is awarded the contract in two
stages.
·
The first stage was awarded on a
NEC4 Professional Services Contract to conduct further
investigations, design the works in detail, seek all necessary
consents, and provide a price and programme for the second
construction stage.
·
The second stage is the construction
of the works, subject to the satisfactory performance of the
contractor in the first stage.
·
The contract for the first stage
makes legal provision for the award of the second stage at the
discretion of the Council.
3.5 The
intention to award the second stage to Neom, based on an NEC Option
A Engineering and Construction Contract prepared by Legal Services,
is clearly stated in the Scope of the first stage contract, but the
Council is not obliged to award.
3.6 The
costs proposed by the contractor have been competitively tendered
as sub-contract packages and, as per the first stage contract, have
been subject to an independent audit by a chartered quantity
surveyor to ensure best value.
3.7 Any
changes or additional project costs during the works will be
managed through a comprehensive change control process within the
contract. A project risk register assigns clear ownership of
each risk, ensuring a structured allocation of risk and
responsibility throughout the project's duration.
3.8 The
project currently has a budget of £212k allocated for stage
one only.
4.0 DETAILED
PRESENTATION OF THE SUBSTANTIVE ISSUE
4.1
Deterioration of the sheet pile wall.
4.1.1 Over the 40
years since construction, the piles have suffered with corrosion
because of the harsh saltwater environment and a phenomenon known
as accelerated low water corrosion (ALWC). ALWC is a particular
form of microbiologically-induced corrosion which significantly
accelerates the deterioration of a steel pile and thus greatly
reduces the structure’s lifespan.
4.1.2 These
defects if left untreated would reduce the overall capacity of the
structure to support loading applied to the pier - the loading
being a combination of the weight of land that the wall retains as
well as the weight from buildings and activities conducted on the
pier.
4.1.3 The stage
one design phase and survey results have shown that repair works to
the piling is essential to extend the life of the asset and
maintain a safe and continuous operation of harbour
activities.
5.0
CONSULTATION UNDERTAKEN AND RESPONSES
5.1
Consultation has been undertaken with the following statutory
consultees.
5.1.1 Marine
Management Organisation – The application for the works has
been assessed and a licence has been issued to undertake the
works.
5.1.2 Local
Planning Authority – The Council have received confirmation
that the scheme does not require planning permission, however due
to the Grade II listed status of the Pier, it does require Listed
Building consent. A Listed Building application has been submitted,
we await the outcome of this application prior to commencement on
site.
5.2
Consultation has been undertaken with the Harbour Master and the
Scarborough Harbour Operations Manager regarding the nature and
phasing of the works. Both parties have agreed to the proposed
approach, ensuring alignment on how the project will
proceed.
5.3 The
Scarborough Harbour User Group have also been regularly updated as
the project has progressed.
6.0
ALTERNATIVE OPTIONS CONSIDERED
6.1 At the
outset of the project, Scarborough Borough Council considered the
replacement of the piles with new piles, but this was rejected on
cost grounds, and because the structure was not yet at the end of
its serviceable life and could be repaired.
6.2 The only
alternative if the second stage of the project is not awarded to
Neom Engineering Ltd is to re-procure the works via a new tender.
There would be a number of issues with this approach:
6.2.1 In Stage one
(Design), Neom have worked through and resolved issues relating to
the delivery of the scheme with the Council and the benefit of this
would be lost.
6.2.2 The contract
is a design and build contract. Neom retain the risk liability of
the design which would be lost if an alternative contractor were to
be procured.
6.2.3 An
alternative contractor would not accept the design risk of someone
else’s design, and the risk would then rest with the Council
for any design changes.
6.2.4 To have to
re-tender would cause a significant delay and mean works would not
start on site in 2025. There would also be a knock-on delay
on the regeneration scheme
6.2.5 Stage one of
the project requires the contractor to obtain all necessary
consents including planning permission and the Marine Management
Organisation (MMO) licences. The MMO Licence is method specific to
Neom and may be required to be resubmitted. The application
decision period is 13 weeks and could only be submitted following
procurement of a new contractor. The length of time lost would
again push the works into 2026.
6.3 For
these reasons, this approach is not recommended.
7.0
FINANCIAL IMPLICATIONS
7.1
The
estimated cost of the works is £1.279m. Any additional project
costs, including costs arising from compensation events due to
circumstances beyond the contractors control and inflation over the
estimated value allowed for, including construction cost inflation,
is at the Council’s risk. As such, a contingency of
£546k has been included, along with a £15k budget for
internal staffing costs associated with the project. Any costs
arising above this contingency would be an additional cost to the
Council.
7.2
|
Stage 2
|
|
|
Construction
|
£1,279k
|
|
NYC Staff costs
|
£15k
|
|
Project contingency
|
£546k
|
|
Total
|
£1,840k
|
7.3
There is no existing budget in the
capital plan for this scheme and therefore this report requests
approval for a budget of £1.84m to be established. In order to
ensure appropriate governance of spend, use of the established
contingency budget over £100k will be following approval by
the Corporate Director Environment in consultation with the
Corporate Director Resources. As these works are within the
boundary of Scarborough Harbour, the costs will need to be
accounted for within the separate ringfenced Harbour
account.
7.4
As the Scarborough Harbour has
limited ability to generate income there are insufficient immediate
reserves to cover these costs so the ringfenced harbour account
will therefore effectively be overdrawn. The project will be
technically underwritten by NYC’s other reserves and the
borrowing from the Council’s reserves will be repayable to
the Council when there are sufficient funds available within the
Scarborough Harbour account.
7.5
Based on the current forecast of the
ringfenced account, the repayment is unlikely to happen for some
time and so it is not proposed that interest is charged on the
overdrawn balance. The Council reserves the right to revisit this
interest assumption should there be a significant increase in
harbour revenues in the future.
7.6
Ongoing maintenance costs, after
completion of the works, will be funded from the existing harbour
maintenance budget as and when this is required.
8.0 LEGAL
IMPLICATIONS
8.1 The
proposed Scarborough West Pier works will be conducted using the
Council’s powers under the various harbour acts including the
Scarborough Harbour Act 1843. These acts grant the authorities the
ability to improve, maintain, or manage harbours, including the
construction and maintenance of harbour works.
8.2 Local
legislation also enables the Council to provide a loan to the
Harbour Authority for the purposes of the harbour undertaking with
money being repaid by way of annual instalments.
9.0
EQUALITIES IMPLICATIONS
9.1 There
are no significant equalities implications arising from this
report. Initial Assessment included at Appendix A.
10.0 CLIMATE
CHANGE IMPLICATIONS
10.1 There
are no significant climate change implications arising from this
report. Initial Assessment
included at Appendix B.
11.0 REASONS FOR
RECOMMENDATIONS
11.1 Proceeding
with the strengthening works not only ensures continued safe
operation of the harbour and will extend the life of critical
infrastructure serving Scarborough’s fishing industry, but
also underpins the viability of regeneration ambitions. Failure to
repair the wall at this stage would jeopardise the long-term
deliverability and investment potential of the wider regeneration
scheme.
11.2 The
appointment of Neom Engineering Limited for the second stage of
this design and build contract represents best value, continuity,
and the least risk to project delivery, having already demonstrated
satisfactory performance in Stage one.
11.3 The
risks and delays associated with re-procurement are significant,
and awarding the contract to Neom aligns with both the procurement
intent and the practical delivery requirements.
|
12.0
|
RECOMMENDATION
|
|
12.1
|
It is recommended Executive
approve:
i.
progressing with the scheme and
approves entering the second stage of the contract with Neom
Engineering Limited under NEC4 ECC Option A to conduct the works to
the inner West Pier in Scarborough and
ii.
approve a capital budget of
£1,840k to carry out the repair works and agree that use of
the contingency budget over £100k will be following approval
by the Corporate Director - Environment in consultation with the
Corporate Director - Resources.
|
APPENDICES:
Appendix A Equalities
Impact Assessment Screening Form
Appendix B Climate
Change Impact Assessment
BACKGROUND DOCUMENTS: None
Callum McKeon
Assistant Director – Regulation and
Harbours
County Hall
Northallerton
27 June 2025
Report Author – Chris Bourne, Head of
Harbours
Presenter of Report – Callum McKeon,
Assistant Director – Regulation and Harbours
