Issue - meetings

Recommendations

It is recommended that Members of Executive:

i)               note the contractual position being experienced in delivery of the A59 Kex Gill highway diversion:

ii)              approve release of additional project budget from the Capital Supply Chain Reserve totalling £11.7m, plus an allowance for a further risk contingency funding as described in confidential appendix A and delegate release of the risk contingency from the Capital Supply Chain reserve to the Corporate Director of Resources in consultation with Corporate Director of Environment and the Assistant Chief Executive Legal and Democratic Services.

Considered – A report of the Corporate Director Environment providing a contractual update on the A59 Kex Gill highway diversion works in progress.  An increased budget was requested for the project along with a further risk contingency budget.

The Executive Member for Highways and Transportation, Keane Duncan, presented the report which provided an update on the programme and costs, and made the following key points:

·       An additional £11.7m of Council funding was requested, plus an allowance for further contingency if required.  The value of the contingency was sensitive and detailed in confidential Appendix A to the report.  The additional funding would take the cost of the Kex Gill scheme from £68.8m to £82.5m.

·       The project comprised 4km of new road and presented complex engineering challenges due to the terrain and wildlife.

·       The section of the A59 being replaced was prone to landslips and there had been 15 closures since 2000, costing the Council £6m to keep the current road open to traffic.  Since the work started £3m had been spent.

·       The additional costs related to the delayed commencement of works, essential design changes and site conditions which could not have been foreseen.

·       Whilst the additional costs were unfortunate continuation of the scheme was essential to keep the key east west route open and avoid the repeat closures of the past years.

·       The council would continue to scrutinise claims for Compensation Events for extra works under the contract and would seek to recoup costs from third parties where there was a case.

In response to questions the Corporate Director advised that regular updates were provided to Members, local parish councils and businesses, a local liaison group had been established and the project was included in budget presentations to Members due to the financial risk. 

Members of Executive referred to the original decision to proceed with the project and noted that they were aware of the risk at that time.  Whilst central government was the largest funder of the scheme, government’s costs were fixed and any increase in costs would be borne by the Council. 

The Executive Member concluded by reporting that work on the road was progressing well and was on track to open in Spring 2025.

Resolved – that

i)               the contractual position being experienced in delivery of the A59 Kex Gill highway diversion be noted:

ii)              approval be given for release of additional project budget from the Capital Supply Chain Reserve totalling £11.7m, plus an allowance for a further risk contingency funding as described in confidential appendix A and delegate release of the risk contingency from the Capital Supply Chain reserve to the Corporate Director of Resources in consultation with Corporate Director of Environment and the Assistant Chief Executive Legal and Democratic Services.