Content

Salford City Council – Record of
Decision
 
I Paul Dennett, City Mayor, in exercise of the powers contained within the
Council Constitution
do hereby:
 

1. 
Approves the increase in the project budget for the
Liverpool Street Corridor project by £381,353.28.
 

2. 
Approves the increase in the value of the purchase
order to Eurovia Infrastructure Limited to allow a final account
payment totalling £2,445,862.00 to be made, subject to Bee
Network Committee approval, as detailed in the table
below:
 

Detail required

Answers

Contract
Reference

Title/Description of Contracted
Service/Supply/Project

Liverpool Street
Corridor

Name
of Contractor

Eurovia Infrastructure
Limited

Type of
organisation
(to be supplied by Corporate
Procurement)

Private Limited
Company

Status of
Organisation
(to be supplied by Corporate
Procurement)

Non-SME

Value of Contract Extension
(£)

£523,560.70/ full
project

Existing Contract
Term

15/03/2021 to 15/10/2021

Extension
Period

15/10/2021 to 30/12/2023

Contact Officer (Name &
number)

Matthew Mollart – 779
6184

Lead Service
Group

Place

Funding
Source

Grant

Ethical Contractor (EC):
Mayor’s Employment Charter

EC: Committed to sign the
Charter

EC: Accredited Living Wage
Employer

 

 
The reasons are:
Liverpool Street is one of three key transport routes into the
City Centre from the west of the conurbation along with the A6
Chapel Street to the north and A57 Regent Road to the south. As the
job opportunity and population within Salford and the rest of the
Regional Centre continues to grow, ensuring each corridor maximises
its potential is becoming increasingly important.
 
Liverpool Street sits in the middle of Regent Road and A6 Chapel
Street and needs to cater for a wider range of modes. For example,
alongside Regent Road, Liverpool Street is an important corridor
for car commuters travelling into the city centre as well as HGVs
serving the businesses located along the corridor.
 
In
addition, it is a key route into the Regional Centre for cyclists
from Salford Quays and the west of the City, as it aligns with
Princes Bridge over the River Irwell and it also has national
significance as it forms part of the part of National Cycle Network
(NCN) route 55, a 117-mile route connecting Salford to Preston to
the North and Ironbridge to the South.
 
Over
time as the wider Liverpool Street context changes with more
residential accommodation being built, it is anticipated that the
improvements made as part of the project to sustainable and active
travel modes on the corridor his corridor, will enable more
sustainable travel choices to be made.
 
Project
Challenges
The project
has experienced significant challenges and change throughout the
construction phase, many of which were outside of the control of
both Salford City Council and the contractor, Eurovia
Infrastructure Ltd.
 
The Challenges included: the impacts of COVID, Brexit and the associated material price
increases. Delays in Statutory Undertaker diversions being carried
out by the affected Statutory Undertaker’s contractor.
Uncharted utility apparatus impacting on the design and programmed
activities.
 
These challenges and changes to the works being
constructed, have resulted in the delivery of the project taking
longer to complete and costing more than had originally been
anticipated.
 
The
project delivery team as a whole (SCC and Eurovia) have held
specific meetings since early Mid 2022, around the financial
position of the contract, the additional costs incurred and their
causation, in an attempt to minimise the final outturn position of
the project for the City Council.
 
The
City Council has employed an independent contract specialist to
help support in reviewing the contractor’s claims for
additional costs.
 
Options considered and rejected were:
Consideration has been given
throughout the project to descope and wherever feasible, changes
and reductions have been made.
 
Assessment of risk:
Medium.
 
The source of funding is:
Grant Funding.
 
Legal advice obtained,
Yes. Tony Hatton – Shared Legal Services
Payment of the additional funds is required to enable the
project manager, in consultation with the supervisor and the
employer, to make payment for the increase in project costs as
compensation events which are payable under the contract terms with
Eurovia.
 
A
compensation event is a term used within the NEC suite of
construction contracts to mean an event which can increase (i) the
cost to the Council of the work being carried out, (ii) the time
when the works will be completed, or (iii) both. A compensation
event is the only way in which prices can be increased or the
completion date can be extended. As in this instance they are
events which are not the fault of the contractor. As a result, the
prices, key dates and/or the completion date have been reassessed,
and the contractor is entitled to more time to complete and
additional funds in order to do so.
 
Should the Council fail to make payment to Eurovia in accordance
with the contract terms, they will be in breach of contract and a
claim from the contractor will inevitably follow which would be
incredibly difficult to defend (if at all).
 
The value
of the construction contract is below threshold values for
procurement purposes and so strict compliance with the Public
Contracts Regulations (PCR) is not necessary and the Council may
approve the additional funds in accordance with its own
constitution. Having said that, the additional payments would be
permissible under the PCR which allow for modifications to be made
to existing contracts such that a modification (here a variation to
payment) may be made where the following cumulative conditions are
fulfilled:
 

1. 
The need for modification has been brought about by
circumstances which a diligent contracting authority
could not foresee;

2. 
The modification does not alter the overall nature
of the contract;

3. 
Any increase in price is not
higher than 50% of the value of the original contract or
framework agreement. (reg 72(1)(c)).

 
The
level of this additional spend falls into the latter category hence
any risk of a challenge is low, and the payment is being made in
accordance with the contract terms with Eurovia.
 
Financial advice obtained, yes. Hollie Faulkner – SCC
Finance
The
additional funding requirement for Liverpool Street Corridor of
£381,353.28 will provide sufficient funding to the project to
allow for final account payment to the contractor plus the
additional management and supervision costs.  These additional costs are largely as a result of
rising material costs and covid delays. 
Discussions are underway between TfGM and the Bee Network Committee
to agree the reallocation of grant funding to this
scheme.  If approval is given this will
reallocate grant funding from the Infrastructure Capital Programme
to fund these additional costs.
 
Procurement advice obtained: Yes, Heather Stanton – SCC
Procurement
The budget increase for this
scheme has been outlined in the above report with regards delays
and budget challenges. The project was originally procured through
Lot 2 of Manchester City Councils, Highways and Infrastructure
Construction Works framework which complies with standing orders
and PCR’s.
 
Procurement acknowledges the
rationale for the extra funding, although this could heighten the
risk of potential challenge from an aggrieved alternative provider.
The value, whilst significant, does fall within the threshold under
which the PCR’s allow for contract variations, however the
risk of challenge still remains. As part of the Council’s
Innovate program and budget challenges, ideally, any proposed
contract changes should provide details of efficiencies or enhanced
contract management arrangements.
 
HR advice obtained: N/A.
 
Climate change implications obtained, Yes. Matthew
Mollart
The
completed project helps enable more sustainable and active travel
choices to be made through the introduction of protected cycling
facilities and bus stops enhancements (shelters and raised
kerbs). 
 
These more sustainable travel choices will help reduce Co2
emissions, that are linked to global warming and reduce the number
of private vehicles on the roads, helping create a nicer
environment to walk and cycle.
 
That is in addition to the rain
gardens that have been introduced along the corridor, which help
improve the aesthetic of the corridor for its users, but act to
collect rainwater runoff and help in the reduction
flooding.
 
Documents used: N/A.
 
Contact details:
Contact Officer: Matthew Mollart
Telephone number: 0161 779 6184
 
 

Signed:    Paul
Dennett       Dated:   25 October 2023.
           
       
City Mayor
 

FOR DEMOCRATIC SERVICES USE
ONLY
 
*          
This decision was published on 26 October 2023
*          
This decision will come in force at 4.00 p.m. on 2 November
2023 unless it is called-in in
accordance with the Decision Making Process Rules.