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 2

Hounslow Highways PFI How the Project Works 3

Hounslow Highways PFI The LB Hounslow authority and Client Independent Client Authority Contract Monitoring Team. Traffic Officer Certifier Team, Transportation Planning Team etc. all retained within the authority, together with other strategic contracts such as Waste Management The SPV is the organisation that Funders Special Purpose contracts directly with the authority and Vehicle (SPV) 50/50 the funders. This is a funded equity Equity partnership (50/50) that carries Infrastructure plc guarantees to the authority and funders. Stability comes from the sharing of equity The Operating Company has a detailed Funders Advisers Operating sub-contract with the SPV, reflecting all Company elements of the Project Agreement. This organisation carries out all of the works and is supported by parent company guarantees and other direct agreements 4

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 5

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 6

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. 7

LB Hounslow Client Team Performance Management and Responsibilities Frequency Performance management activity Why Daily • Active performance target monitoring for • Contractual requirement for Hounslow activities involving CIP, Cleansing, Cat 1 Highways to meet a number of target within defects amongst others timescale and to high standard Weekly • Regular updates between PFI Client Team • To ensure optimum performance and and the SPV on various issues relating to contractual requirements are being adhered performance, contractual requirements, and to scheduled work. Monthly • Paymech Meeting to discuss failures in • To hold the contractor to account against meeting performance targets required standards • Monthly Monitoring meeting with Contractor to discuss Annually • Review Annual Service, Performance, • Continuous improvements into service Operational and Policy Plans standards and to implement new best practices and better working procedures 8

Progress across the borough End of Year 4 (Milestone 8) End of Year 4 9

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 10

Network Performance Gap 11

Investment Programme • 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 12

Inspections and Maintenance 13

Managing the Infrastructure • Highway Safety Inspections • Inventory • Policy setting and Audit • Management of planned maintenance • Condition Surveys and specifications 14

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. 15

Street Cleansing • 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

2016 Street Cleansing scores below target 17

Fines Issued for Highways/ Environment 18

Hounslow Highways PFI The Network Hub and Performance Measurement 19

Contract Performance 20

Enquiries per month increasing 21

99.6% of all enquiries completed on time in 2017 22

Performance adjustments are applied against 294 performance targets 23

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.

Future Issues/Opportunities 26

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.