street lighting & traffic signals private finance initiative
TRANSCRIPT
STREET LIGHTING & TRAFFIC SIGNALS PRIVATE FINANCE
INITIATIVE
INFRASTRUCTURE
• 16,500 Street lighting columns
• 2,050 Traffic signal points
• 1,500 Illuminated signs
• 800 Illuminated bollards
THE PROBLEM
• Asset condition
• Maintenance backlog
• Perceptions of crime
• Need for investment
• Shortage of funding
THE NEED
OPTIONS CONSIDERED
TYPES OF PROCUREMENT:
• In-House provision
• Traditional Term Maintenance
• Joint Venture
• Private Finance Initiative
PRIVATE FINANCE INITIATIVE
WHAT IS IT?
PFI
• Central Government Support (credits)
• Public Private Partnership where capital intensive investment required
• Transforms the Council from owner & operator to purchaser of a service
• Use of private sector expertise & efficiencies
PFI
HOW DOES IT WORK?
PFI
• 25-year contract
• 5-year Core Investment Period
• Ongoing maintenance
• Performance driven - Outputs
• Transfer of risk to most appropriate party
PFI
WHAT WILL BE DIFFERENT?
PFI
• Large-scale upgrade of street lighting and
traffic signals
• Column positioning
• Improved lighting levels
• De-cluttering
• Robust monitoring and maintenance regime
• Improved streetscape
EXPECTATIONS Typical Residential Street – Prior to PFI
Typical Residential Street – Post PFI
EXPECTATIONSDevonshire Road
Devonshire Road – Recent Scheme
PROCESS TO DATE
Total of £600 million credit – 15 Authorities bid
DfT announcement November 2005
Expression of Interest submitted February 2006
Business Case submitted January 2007
Pre Qualification of Bidders April 2007
Formal approval received September 2007
Procurement commences October 2007
PFI PROCUREMENT PROCESS
• New Rules - Competitive Dialogue
• Approx. 18-month process
October 2007 Outline Solutions
April 2008 Detailed Solutions
October 2008 Final Tenders
December 2008 Contract Award
April 2009 Contract commences
FINANCIAL INFORMATION
• PFI Credit Award - £31.9 million
• Total contract value - £141million
• Annual cost - £2 million
• Affordability gap - £450,000 pa
• Income Generation - £200,000 pa
THANK YOU!
ANY QUESTIONS?