Agenda item

The report was noted.

Jon Burnes introduced the report to members of the committee.

Members noted in the report that the £43 million gap has been reduced to £12.75million on the mitigations and noted that the effect of inflation has been quite severe. Members asked how confident officers were of the £12.75 million gap across the whole of the projects being accurate.

Officers advised that these are estimates currently and it is a fluid situation which is why the report is updated monthly. Officers believe that the gap will only go up because there are still procurements to come on board and costs to be estimated for further planned procurements.

Members were advised that it is unlikely that there would be a significant reduction in construction costs and inflation in the next 2 years. Officers advised they need to manage and mitigate and reduce the gap as much as possible. They are confident that it is as accurate as it can be at this stage.

Officers explained that Pembroke Dock Marine, Supporting Innovation & Low Carbon Growth, Yr Egin and Digital Infrastructure are the four projects that make up that £12.75 million gap.

Members were also advised that when more procurements come on board, the gap could increase and some of the business cases were developed several years ago.

Members had questions relating to Yr Egin phase 2 and how the report talks about the revised delivery model, noting the new proposed provision of a virtual production facility in Carmarthen campus. Members wanted an explanation of why if it is a new or revamped project that was going to cost £10.3 million originally, that the current estimate is for £12.9 million and why they are not being told that it should be done within the original budget of £10.3 million?

Officers explained that even though this idea for Yr Egin has been put forward, it hasn't been approved and a change request would be required and submitted through the SBCD governance groups. The figure reflected their current thinking of what that phase two could cost. Officers also explained that all the projects are governed by the envelope of money that they had from City Deal, but also the contributions from private and public sector. There are also the outputs, (the delivery of a building);and the outcomes, such as jobs, wage uplift, increased land value. 

Officers noted that the new Vice Chancellor of the University of Wales Trinity Saint David and the senior management team is considering their future commitments for undertaking capital projects including Yr Egin Phase 2 and the Innovation Precinct in Swansea Waterfront. The business and organisational need for additional infrastructure is also being considered as part of this process.

Members clarified that the 25% increase is just a prediction of what any changes would cost but are not set in stone. Officers confirmed that it is just a delivery solution idea as opposed to something that's been put into practise.

Members also noted that the estimate of the cost was not all directly the City Deal money and was also included other partner funding contributions as part of the overall funding package.

The report was noted.