Bath & North East Somerset Council
Cllr Gerrish, Cabinet Member for Customer Services
On or after 20th September 2008
AGENDA ITEM NUMBER
Two Tunnels Project
EXECUTIVE FORWARD PLAN REFERENCE:
Westmoreland, Oldfield, Lyncombe, Widcombe, Combe Down, Bathavon South
AN OPEN PUBLIC ITEM
List of attachments to this report:
Appendix 1 : Plan of Two Tunnels Route
1 THE ISSUE
1.1 The Council has previously expressed its support to the Two Tunnels Greenway Project promoted by Sustrans and the Two Tunnels Group as part of the Connect2 lottery bid. This report sets out the role of the Council and extent of its financial contribution towards the project.
That the Cabinet Member agrees that:
2.1 The Council reaffirms its support in principle to the Two Tunnels Project, and contributes £100k from the Council's Local Transport Plan Integrated Capital Programme in each of the financial years 2008/09 and 2009/10.
2.2 The Cabinet Member is minded to allocate similar annual sums of £100k over the following 2 years 2010/11 and 2011/12.
2.3 The above sums and any funding to be advanced are subject to:
a) annual review of the Local Transport Plan Integrated Capital Programme and
b) receipt of satisfactory full business case and financial plan (capital and revenue) from Sustrans, including funding sources, to ensure sufficient budget allowance has been provided. These plans will be expected to include clear and satisfactory information relating to contingencies required and provided within the plans, fundraising sources, provision for ongoing maintenance liabilities and the funding thereof (including maintenance of Two Tunnels route, the cost of electricity supply to the tunnel lighting, CCTV costs etc.).
c) Relevant Council costs associated with the administration of its involvement with the project and documentation costs etc will be charged to Sustrans / the project.
2.4 In order to facilitate Sustrans' recovery of £315K VAT, the Council will agree to act as "commissioner" for the project. The Council then acquires at zero net cost the two tunnels and access rights over other land not in its ownership. The Project, however, must ensure appropriate provision is made to meet all ongoing costs.
2.5 The Divisional Director Planning & Transport Development, in consultation with the Cabinet Member for Customer Services, the Development and Major Projects Director and the Divisional Director Property Services, negotiates the necessary agreements between the Council and Sustrans.
2.6 These agreements to be on a fixed fee basis, at no additional cost to the Council and to be subject to review of Sustrans' full business case and financial plan as aforesaid.
3 FINANCIAL IMPLICATIONS
3.1 The total cost of the project is estimated by Sustrans to be £1.8m excluding VAT. Subject to annual review of the Council's Transport capital programme, it is proposed to contribute £100k from the Council's capital programme in each of the financial years 2008/09 and 2009/10 with further amounts in the following 2 years, subject to the project's performance and subject to annual review of the Council's Transport Capital programme.
3.2 Sustrans has now requested that the Council acts as "works commissioner" for the project in order to reduce their VAT liability by £315k. As a charity, Sustrans are normally unable to recover VAT. The recommendations in para 2 will enable recovery of all the VAT incurred in constructing the works. The Council will not be making any further commitment to the project, or be responsible for any other liabilities or risks.
3.3 Subject to the necessary agreements being in place, an exemption from Council's Contract Standing Orders will be sought to appoint Sustrans as the main contractor to undertake all work on the Project. This will be on the basis that market conditions dictate they are the main funding partner through the Big Lottery and they have completed the detailed design work. Sustrans have also negotiated relevant land deals.
3.4 The project will be let in a series of fixed price contracts for different elements of the scheme, such that the risk of any cost-overrun in relation to each contract is and will remain with Sustrans.
3.5 Sustrans will be responsible for ensuring that the project remains within the funding they have available and to the extent that the costs exceed those projected, Sustrans will need to make savings in future programme phases.
3.6 Project management and delivery responsibility for the scheme rests with Sustrans. However, it is intended that the Council's Major Projects Division will monitor the Council's involvement in the project in order to ensure the Council's risk exposure remains, at all times, consistent with its commitment.
4 CORPORATE PRIORITIES
- Building communities where people feel safe and secure
- Sustainable growth
- Addressing the causes and effects of Climate Change
- Improving transport and the public realm
5 THE REPORT
5.1 The Two Tunnels Project consists of some 5km of pedestrian and cycle paths, with connecting routes, along the former Somerset and Dorset railway, between Bellotts Road (Bath) and Midford. The route connects with the National Cycle Network (NCN) route 24 to Radstock with the NCN 4 between Bath and Bristol and crosses two roads, Dartmouth Road and Monksdale Road, where two bridges are proposed to maintain the continuity of the traffic free route.
5.2 A particular feature of the project is that the route runs through the 400 m long Devonshire and 1500m long Combe Down Tunnels under Bath. Sustrans aim to make the tunnels themselves a popular tourist attraction by using innovative lighting techniques (following cyclists as they travel).
5.3 The Council owns a section of the route between the two tunnels and the section which forms the Linear Park to the north and west of the tunnels. Sustrans have negotiated with the remaining route owners (including British Rail Property, Wessex Water) to transfer remaining land to the Council at zero cost. Detailed negotiations will need to take place with Property Services to ensure the Council's ownership of this land is unencumbered.
5.4 In October 2006, the Council expressed its support in principle for the Two Tunnels Project, but also that the Council would not accept responsibility for any risks, liabilities and costs associated with either the design and construction or maintenance of the route.
5.5 In March 2007 the Council offered to support the Two Tunnels project financially, without indicating any sums involved. The Two Tunnels project was one of 79 Connect2 Big Lottery projects shortlisted.
5.6 Council officers from Transportation and Parks departments have provided assistance to the Two Tunnels Steering Group which is attended by representatives of the Two Tunnels Group, Cllr Crossley and Cllr Butters and Monkton Combe School and is chaired by former Councillor, Gitte Dawson. Monkton Combe School is one of two schools lying close to the route, whose pupils may benefit from safer traffic free paths, the other being Oldfield Park Junior School.
5.7 The Steering Group led the Connect2 bid process which ultimately proved successful with an award of £1m from the £50m Connect2 project to the Two Tunnels Project in December 2007. Sustrans estimated the cost of the Project to be £1.8m, but significantly these costs excluded VAT. In May this year Sustrans requested that the Council take on the "commissioning" role to enable the recovery of the VAT. The inability to totally recover the VAT which was not included in the project costs would be likely to prevent the project from progressing.
5.8 Planning permission was granted by the Council in May 2008. The Council's Transportation Policy Manager Officer attended the visit by the Big Lottery organised by Sustrans to promote both the scheme and their Connect2 Big Lottery bid. The scheme was subsequently promoted through Council media to encourage local residents to vote for the Project.
6 RISK MANAGEMENT
6.1 The report author and Cabinet member have fully reviewed the risk assessment related to the issue and recommendations, in compliance with the Council's decision making risk management guidance. Health & Safety advice has been sought; there will be a need to assess the safety of dark tunnels as a form of family travel, before it is opened for public use. In addition Sustrans may not raise the remaining £400K required to fund the project and / or the estimated capital or revenue costs may increase. These risks are for Sustrans to mitigate.
7.1 The Two Tunnels Project provides access to the city and green spaces for those who do not have access to a car or public transport and, by encouraging walking and cycling, promotes healthy living for all.
8.1 The rationale behind the recommendation is to provide financial support to the project but to limit the Council's exposure to risk and future maintenance liabilities as outlined in its original letter of support of 25th October 2006.
9 OTHER OPTIONS CONSIDERED
9.1 The Council has considered other project structures for managing the project and reclaiming VAT. Sustrans could take ownership of the tunnels and access across the southern paths. However they would be unable to recover up to £175k VAT to be incurred on work on these sections.
9.2 Alternatively the Council could control the whole route but grant Sustrans a legal interest in the route. There would be a risk that, under the current limits for local authorities, the Council would lose the right to recover VAT on the cost of this and other activities.
9.3 We have considered limiting our offer of support but this would result in Sustrans not being able to capitalise on the successful Lottery bid.
10.1 Cabinet members have provided comments on this report, as have other B&NES Services; Sustrans; Section 151 Finance Officer; Chief Executive; Monitoring Officer
10.2 The Two Tunnels Steering Group has been involved in the project initiation process.
11 ISSUES TO CONSIDER IN REACHING THE DECISION
11.1 Sustainability; Property; Young People; Corporate; Health & Safety; Other Legal Considerations
12 ADVICE SOUGHT
12.1 The Council's Monitoring Officer (Council Solicitor) and Section 151 Officer (Strategic Director - Support Services) have had the opportunity to input to this report and have cleared it for publication.
Peter Dawson, Group Manager, Planning Policy and Transport, Ext 5181
Sponsoring Cabinet Member
Cllr Charles Gerrish
Please contact the report author if you need to access this report in an alternative format