Agenda item

The report was noted.

Jonathan Burnes gave members an overview of the Construction Impact Assessment Review report.

 

Members were advised that the construction impact assessment is a is a quarterly report that officers produce.

 

Members were informed that there's no change from the previous quarter in terms of the construction impact assessment.

 

Officers explained that the overarching funding gap is £43.5 million and there has been a series of mitigations to plug that gap.

 

Officers advised that it is now down to £12 million residual gap, which is again being worked on by projects.

 

Members were advised that there is only one risk being added for Pentre Awel, which relates to delays to construction.

 

Officers reminded members that the key mitigations are either to identify additional sources of funding to the gaps, to revisit the design brief or the scope and to enter longer negotiations with Tier 1 and supply chain contractors around increasing costs.

 

Members asked if there had been any value engineering done as well?

 

Officers advised that fabrication of buildings has been one of the mitigations along with the choice of the location of where the buildings are sighted and the size of the buildings.

 

Members were advised that in terms of the scope, officers have identified that through any change brief, change of design brief or scope changes, it doesn't change the outcome of what will happen consequently.

 

Officers used the example of the SWITCH production facility, the decarbonisation steel facility within Neath Port Talbot and Swansea University. The size of the building is smaller because it was an approximate size, but it can still house what they have planned to house originally. Officers explained that they are cutting the fat without affecting the delivery outcomes.

 

Officers also gave the example that Pentre Awel having a facade of glass on the plan that they have halved in size to reduce the cost of producing and transporting the glass to site. The matrix project also changed their fabrication.

 

Members were reminded that materials, costs, fuel and energy prices are higher than when the business cases were developed. While there will be an increased cost, through the mitigations, officers are reducing that and closing that gap.

 

Members were advised that the Programme Board had asked officers to reassess and reshape the Construction Impact Assessment and asked them to look at 4 areas.

 

•         Value for money when allocating public funds.

•         Flexibility in procurement, especially in frameworks.

•         Informing a review for the regional procurement strategy.

•         Partnership solutions to address the skills issues affecting the Construction industry.

 

Members stated that in relation to procurement they aren’t a big supporter of having a list of contractors to call from to assist in the programmes. Members asked if there is any loading done to local companies?

 

Officers explained that in relation to tier 1 contractors they are unfortunately hampered by the number of tier one contractors that reside within Wales, let alone within the region.

 

However, they always try within the frameworks to have a more preferential treatment towards local supply chain that sometimes works well because there are local suppliers of steel and timber, but other times like in the case of Pentre Awel, the timbers that they needed for that, nobody could produce them in Wales, and they had to be acquired from elsewhere.

 

Officers explained that there are certain specialist materials that aren't many suppliers of even across Europe, let alone within the region but they will always try push towards using local.

All the tier 1 contractors are required to work with lead delivery partners to identify and summarise how much went through local supply chain and they use SA post codes to identify how many businesses and how many contracts were awarded to local supply chain.

 

Members noted that there isn’t any cement manufacturers left in Wales now and cement often has to come from elsewhere and explained that in Swansea there is a beyond bricks and mortar scheme which has been implemented right across the region. Members were glad to see the way that officers are pushing forward on procurement.

 

Officers added that if the region is developing and building, then that should attract more people, particularly around tier one contractors and supply chain to start looking at how they supply them from Wales or from the region across the UK, Europe as well.

 

Officers showed that this links to part of what the skills and talent programme will do which is to look at new construction methods, sustainable construction methods and upscaling people to work in those areas so that there is a talented workforce which is working within and outside of the region for future building construction needs.

 

Members noted that with the building of highly energy efficient houses that city deal has built needs a lot of the insulation materials and some of the windows etc. are to be brought over from the continent because they won't be made in the UK. Members hoped that at some stage that somebody locally or in the UK will start doing it.

 

Officers noted this and gave the example that when members visited the HAPS site, they were talking about using wool for insulation and using local supply chains for that.

 

Officers acknowledged that it is a mix between always needing to import and bring things in but balancing that with what they can use with local natural resources or workforce as well.

 

The report was noted.