Decision details

That NYC, acting as Shareholder of NY Highways Limited (the “Company”), has approved the Company entering in to a lease for 31 gritters with anticipated effect from 1st September 2024.

Due to the Company being a “teckal” compliant company, the Company’s articles of association includes various reserved matters, which are decisions that must be taken by the Company’s shareholder. As NYC is sole shareholder of the Company, NYC’s approval was required to enable the Company to enter into the lease. In particular Reserved Matter 20 within the Company’s articles of association requires shareholder approval for “Agreeing to enter into or entering into agreements or arrangements in respect of the hire/purchase or acquisition or disposal of any material assets by the company the total value of which exceeds £250,000 per annum.” Due to the value of this lease, this falls within the remit of this reserved matter.

The winter gritting fleet is required to undertake the treatment of 57 Priority 1 gritting routes on the North Yorkshire road network to prevent the formation of ice and snow. The current 2023/24 fleet consists of 78 vehicles of varying ages, the two older vehicles leases have come to an end and have had lease extensions to maximise their efficient use. The two expired leases account for 40No vehicles, a review has taken place within NYC and NYH to enable a suitable level of resilience, it has been determined that only 31No new vehicles are required to replace these. The reduction in fleet size from 78No to 70No is due to a reduction in the number of gritting routes from route optimisation (same km treated as previously), also because the fleet is newer and more reliable with less downtime experienced with the newest vehicles on the fleet that were purchased in 2021.

Extending existing gritter leases – the existing leases have already been extended and the gritters provided under these leases are at the end of their reliable life for NYC. The maintenance costs of these vehicles are becoming expensive and their reliability is not at the required level to provide an effective service, therefore, it is not recommended to continue extending these leases.

Purchase vehicles – This option has been considered and due to the cost of new gritter vehicles (cira £200k each), it is not affordable for NYH to purchase the vehicles. An options paper was presented to NYH Board and it was agreed that NYH would lease the required vehicles.