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NCE Live News Updates Tuesday 17 December 2013: Shale, rail and runways dominate today's news

Understandably the top billing story this morning is the revelation that a government appointed commission has firmly put a new runway at Heathrow back in the running to help deal with a looming capacity crisis. A longer double-runway is also under consideration at the airport alongside a new one at Gatwick. Boris Island, however, has missed the mark on this occasion. In other news, Network Rail continues its ramp up to CP5 with more contract wins.

5pm: A Deloitte Estate led consortium including Aecom and HOK has won a contract to assess the options for the restoration and renewal of the Palace of Westminster.

Publication of a study in 2012 showed that, unless significant restoration work is undertaken, major, irreversible damage may be done to the Palace, which is a Grade I-listed building and part of a Unesco World Heritage Site.

Upon review of the study, both Houses of Parliament asked for an independent, costed appraisal of the options which would allow them to make an informed decision on a preferred way forward.

Three broad approaches to the restoration and renewal work are being considered:

  • continuing repairs and replacement of the fabric and systems of the Palace over an indefinite period of time;
  • a defined, rolling programme of more substantial repairs and replacement over a long period, but still working around continued use of the Palace; or
  • scheduling the works over a more concentrated period, with parliamentary activities moved elsewhere to allow unrestricted access to the Palace for the delivery of the works.

“The Palace will require very significant renovation in the years to come,” said a written statement by John Thurso MP, spokesman for the House of Commons Commission, and Lord Sewel, chairman of Committees in the House of Lords. “The Commission and the House Committee recognised in 2012 that doing nothing is not an option. They accept their responsibilities as custodians of a great iconic building and the need to ensure its future. Selection of a preferred way forward is expected to occur during the course of the next Parliament, not this one.

“The contract for the assessment will set a maximum price of £2,019,295 and a fixed price (which may be lower but not higher) will be agreed two months into the contract once the consultants have become familiar with the extensive survey work already done on the Palace.”

The appraisal team will begin its work in January 2014, starting with a review of the three broad implementation options and a range of possible outcome levels.

The findings will be drawn together in a final report that will describe each scenario in depth and draw on all available evidence to describe its cost, timescale, risks and benefits.

Background to the Programme

The Restoration and Renewal Programme has been established to tackle the significant work that needs to be done to protect the heritage of the Palace of Westminster and ensure it can continue to serve as home to the UK Parliament in the 21st century and beyond.
Since its construction in the mid-1800s, many features have never undergone major renovation, and the heating, ventilation, water, drainage and electrical systems are now extremely antiquated. The roofs are leaking and improvements to fire safety are needed, and the cumulative effects of pollution and lack of maintenance is causing extensive decay to stonework. There has been significant under-investment in the Palace since at least the 1940s, when parts were renovated following bomb damage during the Second World War.
To date, all intrusive renovation work has been carried out around sittings of Parliament. This approach has permitted only the minimum essential maintenance and piecemeal replacement of systems at highest risk of failure. As with any heavily used building this is unsustainable in the long term and eventually a substantial renovation is needed.


4.55pm: Rutland County Council has awarded Lafarge Tarmac a major five-year highways contract worth up to £35M.

Valued at £3.5M a year, the five-year contract has an option of a further five-year extension. It will see Lafarge Tarmac’s Contracting business deliver a wide range of highways services for the County including resurfacing, reactive maintenance, gulley cleaning and winter maintenance.

The deal follows other wins for the company in 2013, including contracts with Norfolk County Council, Halton and Warrington Borough Councils and Nottinghamshire County Council.


3.25pm: The ICE is the latest respondent to the airports announcement.

Director general Nick Baveystock said: “This report is a welcome contribution – rightly recognising the need for prompt action to increase aviation capacity. Indecision, however, still blights this issue as questions around the need for a single hub remain unresolved, and the UK continues to slip behind its European rivals. The proposed actions to alleviate capacity restraints in the shorter term must be progressed swiftly, and the crucial role of regional airports should be considered thoroughly. Come 2015, when further detail on the feasibility of the shortlisted proposals is set out, brave political leadership will be required.”

3.15pm: The government has published a regulatory roadmap for shale oil and gas developers along with a Strategic Environmental Assessment report for consultation.

Large scale shale production by the 2020s could boost energy security and generate £1bn for local communities, acccording to the assessment by Amec.

In addition, the government has published a regulatory roadmap for shale gas which sets out the series of permits and permissions developers need to obtain prior to drilling for onshore oil and gas. This is to provide certainty to investors and local communities about what the permitting process entails.

The report sets out low activity shale production versus high activitiy. The high activity scenario assumes that a substantial amount of shale gas is produced during the 2020s, (4.32 to 8.64 trillion cubic feet), which is up to three times current gas demand in the UK.

Under this scenario, there would be beneficial impacts to the economy, jobs and communities. Employment in the oil and gas industry could be increased by 7% with 16,000 to 32,000 full-time jobs created.

Local economies would benefit from receiving an initial contribution of £100,000 per hydraulically fractured site, the Department for Energy and Climate Change said. Almost £1bn could be paid out across the UK under a high activity scenario.

However, it acknowledged that high levels of shale gas production could have some potentially adverse impacts on the environment and communities, including an increase in traffic congestion, emissions and more pressure on water resources.

“There could be large amounts of shale gas available in the UK, but we won’t know for sure the scale of this prize until further exploration takes place,” said energy minister Michael Fallon.

“It is an exciting prospect, which could bring growth, jobs and energy security. But we must develop shale responsibly, both for local communities and for the environment, with robust regulation in place.”

A consultation will now run until March to consider the findings of the SEA and how this affects shale gas production in the UK.

3pm: Network Rail is to be reclassified as a central government body.

The Office for National Statistics (ONS) today announced a statistical change to its classification of Network Rail as a result of changes in European accounting guidelines.

As a result, Network Rail’s debt of around £30bn is to be reclassified as public sector debt for the purpose of government statistics. These new guidelines and the resulting reclassification come into effect on 1 September 2014.

Network Rail said its reclassification as a central government body was a statistical decision that does not alter the company’s structure as a not-for-dividend company, limited by guarantee, with Members rather than shareholders.

“The business acts and operates today as it did yesterday, and its job of delivering a safe, reliable and improving railway for 4M daily users continues,” it added.

Network Rail and the Department for Transport have also published today a Memorandum of Understanding (MoU) that outlines how they will ensure the company’s business continues as usual, it said. The MoU also acknowledges that some small changes will be necessary as the company becomes accountable to parliament for its finances.

At least initially, the company will continue to raise debt to fund its ongoing investment programme while the longer term funding options are considered.

Critically, it said as an example, the company will retain commercial freedom to work collaboratively with train operators and suppliers in delivering sustainable improvements in the railway under the well established regulatory framework that provides stability of funding through the five year regulatory review process.

2.30pm: Reactions to the Airports Commission decision to further investigate new runways at Heathrow and Gatwick have begun to roll in.

The House of Commons Transport Committee has revealed it intends to hold a one-off evidence session with Sir Howard Davies on 20 January 2014 to answer questions on his report.

London First chief executive Baroness Jo Valentine said: The government must now act on the Commission’s short term recommendations and all parties must back this process to its conclusion. The Commission must not join a long line of technocratic exercises spanning 50 years of inaction. Political leadership will be required to stay the course. The options for new runways must now be worked up so they can be compared, judged on a like-for-like basis and put to public consultation before the General Election.”

As for the decision to drop the Thames Estuary proposals Valentine warned “we must not start unpicking its rationale”. “Tough decisions have been made, and tougher decisions are to come,” she said. “Now is not the time to unravel the purpose of this Commission”.

The Association of Consultancy and Engineering welcomed the news. Chief executive Nelson Ogunshakin said: “This report is welcome and demonstrates the need for action on aviation, similar to what we have recently seen on energy, roads and rail. The UK needs to address the capacity issues we face, and we would urge all parties to come together and develop the necessary solutions. This will provide the much-needed confidence and ensure we can continue to access and compete with existing and emerging markets, and enable the UK’s economic growth to continue forging ahead without compromising on the UK’s international competitiveness as a destination for inward investment.’


10.30am: Network Rail has kickstarted its infrastructure investment plans for London and the south east for the next five years by nominating four preferred suppliers for contracts worth a total of £1.2bn.

VolkerFitzpatrick, Costain, Bam Nuttall and Geoffrey Osborne are the four suppliers who will work with Network Rail’s regional infrastructure projects business on the Anglia, Kent, Sussex and Wessex routes.

The framework agreements, which will come into force on 1 April 2014, will cover almost half Network Rail’s £2.5bn workbank for the 2014-19 funding period in the region, delivering longer platforms for longer trains on key commuter routes, station enhancements, new footbridges to improve accessibility and upgrades to bridges, embankments and tunnels to increase the resilience of the infrastructure in some of the most intensely-used parts of Britain’s rail network.

Costain said the initial anticipated value of the contract for the firm was around £60M.

Network Rail southern regional director for infrastructure projects Nick Elliott said: “The number of people travelling by rail has more than doubled in the last decade and is predicted to grow by a further 400m by 2020.

“To help meet this growth in demand, our plans for the next five years will help deliver a 20% increase in the number of seats into London at the busiest times of day. We’ll do this not only through big, high-profile schemes, but also by targeted investment to lengthen platforms, improve stations, increase accessibility and make our infrastructure more reliable across London and the south east.

“I look forward to working with our suppliers to build a bigger, better railway for passengers in and around the capital and to help support the region’s economic growth.”

The railway infrastructure owner and operator said the frameworks agreements have been designed to encourage increased collaboration between Network Rail and its partners, and will incorporate shared objectives to enable both sides to share in risk and reward and to incentivise safe, efficient project delivery. Safety accounted for 15% of the evaluation criteria for suppliers, which is a significant increase on previous frameworks and highlights Network Rail’s commitment to improving workforce safety.

Key facts

The four framework agreements have an agreed minimum contract value and cover enhancements, buildings and civils work on Network Rail’s Anglia, Kent, Sussex and Wessex routes. They will be in place for the duration of control period five, which runs from 1 April 2014- to 31 March 2019.

The client for these agreements is Network Rail Infrastructure Projects South, one of four regionally-based business units within Network Rail tasked with delivering capital expenditure projects to improve the railway. This regional structure was put in place in 2011 as part ofNetwork Rail’s devolution agenda, in order to encourage competition, innovation and closer partnerships with suppliers to deliver projects more competitively and efficiently.

10.15am: Plans for a new runway at either Gatwick or Heathrow and an extended runway at the latter have made the shortlist of those proposals being taken forward by the government commission charged with reviewing airport strategy over the coming decades. However, suggestions of a Thames Estuary airport – including the most famous dubbed Boris Island – have been dropped.

The Airports Commission, led by Sir Howard Davies, concluded there is a need for one additional runway to be operational in the south east by 2030.

Further study will now be made of the following three options:

  • Gatwick Airport’s proposal for a new runway to the south of the existing runway
  • Heathrow Airport Ltd’s proposal for one new 3.5km runway to the northwest
  • Heathrow Hub’s proposal to extend the existing northern runway to at least 6.5km, enabling the extended runway to operate as two independent runways.

Read the full story here.

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