Hounslow Highways PFI www.hounslowhighways.org Outline How the - - PowerPoint PPT Presentation

Housing and Environment Scrutiny Panel

16 January 2017

Hounslow Highways PFI

www.hounslowhighways.org

Outline

• How the project works
• End of Year 4 Update
• Inspections and Maintenance
• The Network Hub and Performance Measurement
• Contract Performance
• Future Issues/Opportunities
• Summary and Conclusion

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Hounslow Highways PFI

How the Project Works

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Hounslow Highways PFI

Special Purpose Vehicle (SPV) Operating Company Client Authority Funders

The LB Hounslow authority and Client Contract Monitoring Team. Traffic Officer Team, Transportation Planning Team etc. all retained within the authority, together with other strategic contracts such as Waste Management

50/50 Equity

The SPV is the organisation that contracts directly with the authority and the funders. This is a funded equity partnership (50/50) that carries guarantees to the authority and funders. Stability comes from the sharing of equity The Operating Company has a detailed sub-contract with the SPV, reflecting all elements of the Project Agreement. This

• rganisation carries out all of the works

and is supported by parent company guarantees and other direct agreements

Independent Certifier Funders Advisers

Infrastructure plc

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Infrastructure Condition and Investment

• 3 years of procurement and competitive dialogue followed with the

award of Preferred Bidder in March 2012:

• A 25 year contract
• £100 million of new investment (in first 5 years)
• A high level of specification
• Wider scope of network management
• Delegated powers and associated risks making the

Service Provider accountable for the risks within their powers to mitigate

• Refinancing took place in November 2016 saving LBH

£80k per annum

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Infrastructure Condition and Investment

• The Department for Transport and HM Treasury committed:
• £350 million of PFI credits or grant funding
• £14 million per year for 25 years
• This based on the recovery of infrastructure quality and

integrity and its long-term whole-life cost and benefits

• A fixed and known investment to supplement the

revenue and capital budgets of Hounslow

• This investment is not paid back to HM Treasury

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Infrastructure Condition and Investment

• VINCI Concessions, Ringway and 3i committed to:
• Providing the £100 million up-front investment to

rehabilitate the infrastructure

• The transfer under TUPE of 159 Council employees and

their employment rights

• Accepting the risk of; public liability, utility damage, cost

fluctuations outside of RPIx, and all network condition issues for 25 years

• A fixed price for the contract plus indexation. No RPIx is

applied to the core investment works (5 years)

• Performing to the requirements of the Output Spec.

LB Hounslow Client Team Performance Management and Responsibilities

Frequency Performance management activity Why

Daily

• Active

performance target monitoring for activities involving CIP, Cleansing, Cat 1 defects amongst others

• Contractual

requirement for Hounslow Highways to meet a number of target within timescale and to high standard Weekly

• Regular updates between PFI Client Team

and the SPV on various issues relating to performance, contractual requirements, and scheduled work.

• To

ensure

• ptimum

performance and contractual requirements are being adhered to Monthly

• Paymech

Meeting to discuss failures in meeting performance targets

• Monthly Monitoring meeting with Contractor

to discuss

• To hold the contractor to account against

required standards Annually

• Review

Annual Service, Performance, Operational and Policy Plans

• Continuous

improvements into service standards and to implement new best practices and better working procedures

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Progress across the borough

End of Year 4 (Milestone 8)

End of Year 4

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Condition Improvement Progress so far

Milestone 8 (4 Years) – Borough Wide Carriageways

• 952 Schemes
• 186 Km of roads (network – 430 km)

Footways

• 822 Schemes
• 205 Km of footways (network – 762 km)

Street Lighting

• 14,357 new Street Lights replaced
• 700 remaining lights to complete, including Heritage lighting

Network Performance Gap

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• The LBH road infrastructure asset value increased by £71 million to £778

million in the last financial year.

• Road and Footway works continue through year 5 to achieve the required

level of compliance at the end of the Core Investment Period.

• Capital works will also take place in the following 20 years based on the

condition of the network each year

• Day to day repairs that qualify for immediate action will continue to be

assessed and actioned.

• Hounslow Highways remains responsible for all streets and their condition

through until 2037

Investment Programme

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Inspections and Maintenance

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Managing the Infrastructure

• Highway Safety Inspections
• Inventory
• Policy setting and Audit
• Management of planned maintenance
• Condition Surveys and specifications

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Defects Repaired to Date

• There are 1,603 individual streets in the Borough
• Of these, 1,355 streets have received some day to day

maintenance (83%)

• Each road on the borough has been visited for

highways maintenance on average 4 times a year over the last 4 years.

• Litter and Detritus
• Graffiti removals
• Fly-posting removals
• Fly-tips removals
• Spillages
• Staining at key areas
• Deep Cleanse in hot-spots
• Weed growth
• Challenges through domestic and

trade waste management 16

Street Cleansing

2016 Street Cleansing scores below target

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Fines Issued for Highways/ Environment

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Hounslow Highways PFI

The Network Hub and Performance Measurement

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Contract Performance

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Enquiries per month increasing

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99.6% of all enquiries completed on time in 2017

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Performance adjustments are applied against 294 performance targets

Community Engagement

• Provided support to 2 major elections (Mayoral & European Referendum)

involving procurement of 15 temporary polling stations and response to flooding on the day.

• Investing in young people:

– We sponsor the Junior Citizens events and Enabling Enterprise – 50 apprentices in the last 4 years

• We hold Joint Action Days with Police and LBH educating residents,

issuing FPN’s where required

• Apprenticeship programmes in place
• Recruited 4 more Lay Assessors in the last year (total of 12)
• Held 4 rounds of Councillor wardabouts

Energy savings for the borough

• HH have reduced the energy consumption for our Street Lighting assets by

55% since the contract started. HH are by far the leading London Borough in this aspect, and in turn we are reducing our carbon footprint.

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Future Issues/Opportunities

Hounslow Housing

• Take over 50km of additional roads and footways:

–1,500 streetlights, cleansing and highways maintenance –3 to 5 year capital investment programme (mini CIP)

• Possible start of July 2017 with some works from April 2017.
• Recognition that the quality of what we do is high and well

received.

• Bring continuity of service to residents and reduce the gaps in

service experienced by our customers.

• Improve the borough and behaviours across the borough

Contract Savings

• PFI contract was refinanced in 2016.
• Discussions are ongoing with RHH/ LBH team to identify

future cost savings within the PFI contract.

Summary & Conclusion

• Operational performance is strong
• Core Investment Programme in the final phase
• Hounslow Housing network being considered in detail
• Future changes & opportunities need to be clearly identified
• Underpinned by a strong relationship between Hounslow Highways &

LBH colleagues

• Current & future emphasise on enforcement and behavioural change

initiatives

• Working together on the challenges for 2017.