Agenda item

(To receive a report from Sam Edwards, Head of Highways Infrastructure, which invites the Committee to consider and comment on a report that seek approval to enter into a two-stage design and build contract for the purpose of delivering the North Hykeham Relief Road (NHRR), prior to a decision being taken by the Executive on 5 April 2022)

Consideration was given to a report from the Head of Highways Infrastructure which invited the Committee to consider and comment on a report that sought approval to enter into a two-stage design and build contract for the purpose of delivering the North Hykeham Relief Road (NHRR), prior to a decision being taken by the Executive on 5 April 2022. The Committee were advised that following approval to seek funding for NHRR, the Council submitted an Outline Business Case (OBC) that was successful in securing a £110m allocation from the Department for Transport (DfT). It was identified that the design and build (D&B) form of contract would provide the greatest cost certainty, therefore a SCAPE framework appointment with Balfour Beatty was recommended. While a robust range of likely costs were identified, ranging from £179.3m to £212.4m, it should be appreciated that not significant factors that wouldn’t normally be accounted for were not included. As a result of inflation and constraints in the construction industry, the cost estimates were from 16.1% to 37.5% higher than the cost identified in the OBC. It was stressed that various clauses were included in the contract to enable termination with no further costs or liabilities if the project’s progression was untenable.

The Committee considered the report, and during the discussion the following comments were noted:-

• Members expressed concerns that, in a period of high inflation rates, it was not clear how costings would be affected. Officers provided assurance that, although their concerns were valid, inflation, price rises, and other cost pressures had been factored into the costs presented.  The cost element included for the accelerated construction inflation experienced over the last 18 months and also accommodated normal levels of construction inflation throughout the life of the project.  There was also a range of variance included in the forecast cost range to account for future normal levels of construction inflation running either slightly higher or lower than expected.  It was stressed that a further substantial spike in interest rates like had been seen in the last 18 months had not been factored into the price as it was too variable to estimate. Officers maintained that if the scheme forecast costs that would be regularly reported back to Members and if the Council felt the scheme has become too untenable then there were provisions within the contract to terminate at no further cost or damages and cease development of the project. The DfT were not going to increase their financial offer above what was already agreed; therefore, any cost overrun would have to be factored in through other forms of funding and funding bids that could be explored. Further assurance was provided that the benefit to cost ratio followed the Green Book basis of the business case; when DfT received the final business case which was programmed for 2025 a summary of costs (as these would have changed over the course of time as the scheme progressed) would be provided.
• Members expressed their satisfaction over the positive impact for local divisions such as Doddington, Hykeham East, North Hykeham, Waddington and the South of Lincoln and were pleased to see that this was a dual carriage way road, with cycling provisions.
• It was clarified by Officers that the commencement of the construction works was planned for November 2025, prior to this a further key decision report would be submitted to this Committee.
• Members echoed local residents’ concerns in relation to the nature and conservation measures being taken before and during construction of the North Hykeham Relief Road, and also around the archaeological investigations that were being carried out and what was expected to be found as part of these in this land. Officers confirmed that once appointed, Balfour Beatty, being the designer, would appoint consultants who would on their behalf, carry out a series of activities including data collection, environmental surveys, ecology surveys, as well as preliminary design of the works to be carried out. All these would feed into the next major milestone, which was to submit a planning application, part of which was an Environmental Impact Assessment that was a legal and statutory requirement; the application would demonstrate a level of mitigation throughout the process.  In terms of archaeological screening, Members were pleased to hear that the actual digging would not commence before November 2025 and that early indicators suggested that although there will be finds they were unlikely to be as significant as was found at the Lincoln Eastern Bypass.  The team remained in close collaboration with Heritage team.
• A point was raised in relation to disruptions caused by closed roads as part of the works scheduled and a question was asked about communications with residents through development stages. Members received assurance that the Council had already written to residents in affected areas and that there was a robust communications strategy in place to ensure residents and landowners remained informed at all stages and that road closures would be communicated promptly. Officers were not in position to comment on where the works would begin from but confirmed that they would be taking place in more than one location simultaneously in line with works requirements; equally the scheme will open across the whole length.
• In relation to the £38m allocated by Lincolnshire County Council to the North Hykeham Relief Road project, further clarification was requested on the determining factors for allocating funding for Highways Capital Programme schemes. The Executive Support Councillor for Highways, Transport and IT agreed to pass on to the Executive Councillor for Highways, Transport and IT.

RESOLVED

1. That the Highways and Transport Scrutiny Committee - recorded its support to the Recommendations to the Executive, made in the North Hykeham Relief Road report.
   
   
2. That the Highways and Transport Scrutiny Committee agreed that the comments listed above be forwarded on to the Executive in relation to this item.

Councillor S Roe re-entered the room.