Agenda item

Paul Dransfield presented a report which provided an update on the Wolverhampton Interchange Project (WIP), the current funding package and the forthcoming reports to WMCA Governance. He reminded the Board of the history behind this scheme, on the production of an integrated business plan and that the Benefit Cost Ration (BCR) had improved as a result of the integration of the various elements. He assured the Board with regard to the financial costings which included contingency sums. He advised that, subject to the approval of funding, work on the new station building would commence on site in December 2017. He explained the financial breakdown and commented on the number of regulatory issues from the involvement of a large number of partners in the scheme.

Phil Hewitt reported that the financial costings of the original Metro elements had been under estimated significantly but that the Midland Metro alliance (MMA) had now provided a formal price: these costs had been audited by the Client and by independent auditors.

The Chair expressed concern with regard to the variation and suggested that lessons needed to be learnt. She outlined a series of steps which she wanted to be undertaken to offer comfort to this Board that this situation would not be repeated. Councillor Robert Hulland commented on the need for rigorous monitoring of this project to ensure costs were controlled. He enquired which parties would be responsible for meeting any over expenditure. He also enquired as to the affect on the Investment Board’s portfolio.

Linda Horne advised that the Board’s portfolio had been re-profiled but that there was no capacity for any new schemes. Gary Taylor queried whether this meant that the ‘headroom’ had been lost. Linda Horne reported that in respect of ‘the current profile this was the case. Paul Dransfield advised that the intention was to deliver the project within budget but that any over spend would be divided between the Responsible Authorities. He advised on the steps taken by the City of Wolverhampton Council to take client control of the rail station element including employing a ‘rail expert’ and a Quantity Surveyor to assess costs. This employment might be continued through the delivery phase. A report to the Integrated Governance Board was planned for December 2017 outlining additional governance requirements.

Resolved:

1.    That the progress with the Wolverhampton Interchange Project (WIP) be noted;

2.    That the funding package for WIP as detailed in section 3 of the report and the submission of a report to the WMCA Board seeking authority to commit the funding of £49.3 million of which £21.9 million WMCA Contribution (borrowing) to be funded by the Department for Transport (DfT) deed approved previously by the former Integrated Transport Authority (ITA) be endorsed;

3.    That the submission of a recommendation to the WMCA Board to approve the delegation to the Metro Programme Director and Head of Governance to enter into the necessary legal agreements be endorsed;

4.    That a Learned Lessons Review to:

·         Understand the reasons for the increase and mitigations that have been and will be put into place across:

a.    This project;

b.    All other Investment Programme Project;

·         TfWM have commenced work in this area to deliver the review by 31 December 2017;

·         An interim Lessons Learned briefing has been supplied to the WMCA FD by TfWM to identify how the Target Cost process has been revised to immediately implement lessons as a result of this project across all TfWM related projects;

·         The Learned Lessons Review to be reported back to this Investment Board;

·         How the Assurance Framework picks these risks up; and

·         Updating of the risk register.