The Corporate Director – Communities submitted a report, the purpose of which was to   seek Council approval to consolidate the balance on the Cardiff Capital Region (CCR) Metro Plus Scheme capital budgets in the capital programme against the Porthcawl Metrolink scheme and vire funding from the Porthcawl Regeneration scheme, to meet the additional costs resulting from the tender process for the Metrolink Scheme, subject to Cabinet’s recommendation on this matter dated 7 February 2023.

She explained that the Porthcawl Metrolink project is the provision of a modern bus facility within the heart of the Porthcawl Regeneration area offering a multi bay, fully enclosed building with room for a concessionary stand.

           Cardiff City Region (CCR) through its Metro programme, together with Welsh Government (WG), provide the principal funding mechanism for large strategic transport projects within the region. This included the Porthcawl Metrolink bus facility which, as well as being an important regional strategic transport facility on the South Wales Metro, is also a key piece of infrastructure within the Porthcawl Regeneration site. Without the Metrolink facility the regeneration programme will not be able to proceed as per the approved strategy by facilitating more sustainable modes of transport. 

The Corporate Director – Communities reminded Council that there were currently two Metro schemes presently included in the Capita Programme, as detailed in paragraph as detailed in paragraph 3.4 of the report.

An informal agreement as expanded upon in the report, required that the contract for the Metrolink be let before the end of March 2023 and demonstrable progress be made, in order to retain the funding for spend in 2023-24 until the completion of the project.  As such, if the contract was not awarded by the end of March 2023 there is a significant risk that all unspent regional funding of £2,707,000 will be lost. 

The Corporate Director – Communities added, that remaining Metro funding allocated to the Penprysg project will also have to be spent by 31 March 2023, or this will also have to be returned to CCR.  This project was the subject of an unsuccessful Levelling Up Fund (LUF) bid in 2022 and further progress on this scheme is limited until further funding opportunities are investigated.  However, it is intended to submit the scheme for future CCR Metro programme funding in 2023-24.

She explained that through the tender process undertaken, the highest scoring bidder had submitted a tender with a value which is considerably above the original estimated costs.  The factors involved with the higher than expected bid, included significant increases in the cost of materials and labour since the estimated cost was calculated.

Procurement advice given, was that it is not possible to re-visit the tender evaluation or award the contract to a lower cost bidder, on the basis that there is no additional funding available as doing so would breach transparency and equal treatment requirement.  It would be unlawful to award the contract to anyone other than the bidder assessed to offer the most economically advantageous tender as evaluated against the published award criteria of this tender.  The only other alternative option would be to abandon this tender and re-tender with alternative award criteria and / or a revised specification should additional funding not be forthcoming, in which case, the current tender will be closed-down, making it invalid, and the process started again with a full new tender. For reasons shared in the report and explained to Members in the meeting, this was not considered to be a viable option for the Council to pursue.

The Corporate Director – Communities, advised that there were other additional costs associated with the scheme over and above those associated solely with the tender. This included a contingency fund of £500,000 and project management costs of £75,350. These costs are normal for a project of this nature and will also have to be met from the Capital budget. The total cost of the scheme is £3,836,834. The majority of this cost had been accounted for in the Capital Programme.

In summary therefore, the report requested Council’s approval to transfer all remaining funds for the Metro programme (£961,613 from Penprysg) to the live Porthcawl Metrolink project, in order to maximise the available CCR spend, and to vire £571,221 from the Porthcawl Regeneration capital budget, also to the Porthcawl Metrolink project, to fund this essential infrastructure project.

The Cabinet Members for Communities and Future Generations commended the report and the recommendations contained within it.

A Member advised that seemingly Council had no option other than to support the proposals detailed in the report, as the alternative was to lose a significant amount of monies that we currently have at our disposal, in support of the regeneration of Porthcawl. He asked that in terms of timing, if the Council has not learnt that sufficient time should be allowed for reviewing potential increases in tender processing and allowing for a decision to be reached, to look for an alternative tenderer before any timescale dictates making a decision on the scheme, through the procurement process. He added, what lessons could be learnt that the Council are having value for money for this and other schemes going forward in the future.

The Corporate Director – Communities assured Council that the bid in question was a good, high-quality bid that Cabinet and Management considered to be value for money and that this would not have been placed before Members today, if that was not the case. She pointed out however, that all schemes being put out to tender face an unprecedented risk in terms of price/cost inflation increases. All local authorities were faced with this not just BCBC, she added. This was due to a number of reasons, that included the cost of living crisis, increase in material costs and rising energy bills, amongst others.

She also assured Members that the tender process had been robust with the successful tenderer being a high-level, well regarded contractor.

Funding allocated to the Porthcawl Metrolink therefore had to be fully committed to this project by the end of March 2023, or this would be lost.

Therefore, in summary, this was a fully compliant bid considered as value for money, hence there being no requirement to re-tender for the works. Should the Council have retendered the work, there was a significant possibility that the tender sum would have increased further. In terms of lessons learnt, the Corporate Director – Communities advised that both BCBC and grant funders could look at any ways to improve situations regarding allocation of funding and the requirements around deadlines for when this should be spent, in the future.

A Member felt that that the project detailed in the report, would not only benefit Porthcawl, but it would also be a regional enhancement of improved facilities that others visiting the area would enjoy. He noted that it met the Net Zero Carbon criteria and that the scheme needed to be pursued both in its own right and so as not to lose close on £3m. He asked if there were any commercial opportunities linked to the facility, for example, naming rights and sponsorship and/or advertising hoardings, etc.

The Corporate Director – Communities confirmed that issues such as these could be considered as part of the works.

A Member sought assurance that the delay to proposed works at the Penprysg Level Crossing, Pencoed, due to the lack of LUF, would be pursued at the earliest opportunity.

The Corporate Director – Communities, gave an assurance that this project was a Council priority and therefore, work would be carried out in relation to the scheme (as alluded to in the report), when this was possible.

Details further debate in terms of other Members questions and the responses to these by the Cabinet and Corporate Management Board, can be found here

Following it being moved and seconded, Members agreed to conduct a vote on the recommendation of the report, the outcome of which was as follows:-

For (the recommendation)                        Against                   Absentions

                  38                                                 0                               6

RESOLVED:                                   That Council

agreed to vire funding within the Capital Programme, as outlined in paragraph 8.4 of the report, to enable the Metrolink scheme to progress.