Four local authority Private Finance Initiative (PFI) projects moved a step closer after over 21% of cost savings were identified, Transport Minister Norman Baker announced today (24 March 2011).
Central and local government have worked in partnership to save £209 million within the spending review period. This will now allow an extension to the Nottingham tram, together with highways maintenance improvements in Sheffield, Hounslow and the Isle of Wight, to continue to the next stage of the funding approval process.
Norman Baker said:
This government is committed to delivering an effective, sustainable and high quality transport network across the country despite the tough economic conditions.
By vigorously pursuing cost reductions we can invest in a greater number of key local infrastructure projects which help boost the economy and jobs, thanks to the benefits these projects provide in their local areas.
Following the spending review last year, we challenged the four local authorities to look again at the cost of the PFI projects they are promoting to ensure we get maximum value for every pound we spend.
The department has been working closely with the authorities involved to ensure these projects are affordable. I am pleased that they have been able to rise to the challenge and have identified savings of 21% from the original estimated costs.
By finding these savings, I can confirm that we are today allowing these projects to move a step forward within our funding approval process.
The projects can now continue their procurement processes and, subject to approval of a final business case, be able to award the service contracts.
Notes to editors
The Department for Transport press notice issued on 26 October 2010, following the spending review, set out the government’s intention to proceed with a number of local authority PFI projects in procurement, subject to ensuring affordability and value for money.
Today’s announcement allows the following projects to move forward to the next stage in the funding approval process: Nottingham Express Transit Phase 2; Isle of Wight Highways Maintenance; Sheffield Highways Maintenance; and London Borough of Hounslow Maintenance. Here are the details:
Nottingham Express Transit phase 2
This scheme is being procured as a Design, Build, Finance, Operate and Maintain (DBFO) PFI scheme. The first line of Nottingham Express Transit (NET) opened in March 2004 running from the main rail station through the city centre to Hucknall to the north of the city. This project would involve two new extensions:
- the 9.6 km Chilwell and Beeston route would run from the railway station to the south west of the city, serving the ng2 development site, the region’s main hospital at the Queens Medical Centre, the University of Nottingham, Beeston town centre and Chilwell before terminating at a new park and ride site serving the A52 and close to junction 25 of the M1.
- the 7.3 km long Clifton route would run from the railway station to the south of the city - it would serve residential areas such as the Meadows and the Clifton Estate before terminating at a new park and ride site serving the A453 (to capture commuters from the M1 south).
Isle of Wight highways maintenance
This scheme will allow Isle of Wight Council to improve the island’s infrastructure including roads, footways, street lighting and other aspects that are related to the highway. It includes almost 499 miles of road with 477 miles of footway. The project also includes 12,000 street lights, a number of bridges and other structures.
Sheffield highways maintenance
The project proposed by the council is a comprehensive highway maintenance project designed to achieve a co-ordinated approach to the highway and street scene. The project which the council has called “streets ahead” will encompass the entire highway network in Sheffield, including 1,200 miles of carriageways and 2,000 miles of footways and or bridges and streetlights.
London Borough of Hounslow maintenance
With 458 miles of pavements and 259 miles of roads, Hounslow has a duty to maintain its streets in a safe condition. This project would revitalise the borough’s roads, pavements, bridges and other street furniture.
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