Birmingham Highways
Maintenance and Management Service
CIHT Northern Ireland
21st November 2011
Birmingham Highways Maintenance and
Management Service (PFI)
Mike Notman
AMEY
PROJECT DIRECTOR
Amey Today
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Founded in 1920
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Part of Ferrovial since 2003
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Leading public services company
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Award winning consultancy
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Approx. 90% of business in public sector
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Over 200 locations across the UK
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11,000 strong workforce
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2010 turnover £1.2bn
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¼ of the UK population use at least 1 Amey
service each day
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Investor in People
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One of the ‘Top 100 Companies that Count’
in the BITC Corporate Responsibility Index
Birmingham Highways PFI – Considerations
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Birmingham City Council (BCC) – Leader’s vision to be
‘world class city’ by 2026
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Large maintenance backlog right across city – wrong
image
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Public demand – ‘something must be done!’
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Outline Business Case – Best Value solution – outsource
to Service Provider
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PFI only way to get extra funding to deal with
maintenance backlog:
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£600M PFI credits – a ‘grant’ from central government
But some concerns still existed:
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Issues around change of control
ring-fences BCC revenue and part of capital budget
Potential concerns from staff and trade unions over TUPE
Overview of Birmingham PFI
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Birmingham – 2nd largest city in the UK
with 1 million people living there and
500,000 people working in the city
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Birmingham City Council annual budget
of over £3.5Bn – largest in Europe
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The project value of c£2.7 Billion over
25 years
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Amey responsible for every street,
footway and associated assets in
Birmingham
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Financial Close 6 May 2010
BIRMINGHAM
London
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Service Commencement Date 7 June
2010
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Almost 18 months into live Project
Project Overview
‘Capex’ in Core Investment Period (CIP) Years 1 - 5:
• 2,547 km of carriageway – 40% treated
• 4,923 km of footways – 15% treated
• 95,107 street lights – 50% replaced in CIP
• 27 structures strengthened in CIP
• 3 tunnels refurbished
• Upgrade UTC to UTMC standards
‘Opex’ in Years 1 - 25
• Surveys and inspections
• Routine, cyclic, emergency and winter maintenance
• Running UTMC
• Dealing with customers via Help Desk in Operational Control Room
• Lifecycle programme to maintain network to ‘performance standards’
• Replacing up to1,000 trees each year
Project structure
AVAHL/Uberior/
Equitix
Facts & Figures
• Approx £330m of capital funding borrowed
• Amey receive increasing monthly (unitary)
payments as capital works are delivered
£100m
• Receiving full payment each month is dependent
on achieving specified performance targets
Capex cost
CIP
100% UC
£55m
Lifecycle
60% UC
Opex cost
5
Years
25
CAPEX Programme Development
• Network condition survey
•pavement (carriageway, footway etc)
•Lighting
•Structures
•Tunnels
•Signals
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Network Needs / prioritisation
• UKPMS model run for pavements
• other asset models
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Draft Programmes
• 5 year indicative
• 1 Year detailed
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Consultation
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Authority Consent
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Works sequencing and coordination
Opex Works – Routine Maintenance
• Works continue to progress in all areas with no significant problems or issues:
• Emergencies/Cat 1’s
• Winter Maintenance
• Street Lighting
• Drainage
• Trees and Weeds
Monthly Reporting of Opex Performance
Over 1,300 Performance Items
• Derived from Output Spec Clauses
• Initially manual data entry
• Ultimately approx. 2/3 automated data (MIS)
• Exception report where failures identified
• Pay deductions via Payment Mechanic
• Service point calculator
Highly complex – resource intensive
• Individual rectification periods per clause
• Individual adjustment periods per clause
• Multiplier [ratchet] mechanism by time (5min, 24hrs, 5days etc)
Authority Audit Team
• Records interrogation
• Limited moratoria agreed
• Mitigations considered but ‘no horse trading’
Opex Works – Inspections and Surveys
• Surveys and Inspections continue in line with programme requirements:
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Deflectograph
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DVI
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Grip Tester
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Scanner
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Bridges and Structures
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Safety Inspections
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Service Inspections
Milestone 10 Targets for Districts 1 - 11
Service Stream
Service Requirement
Carriageways (Hierarchy 2)
Network Condition Index
Amount
Required
NCI = 9.9
(NCI = SRI + SCI)
Carriageways
Network Condition Index
(Hierarchy H3 and H4)
(NCI = SCI)
Footways
Footway Condition Index
NCI = 6.6
FWCI = 6.6
(FWCI = SCI)
Verges
Verge Condition Index
VGCI = 6.6
(VGCI = SCI)
Kerbs
Kerb Condition Index
KBCI = 6.6
(KBCI = SCI)
Cycle Track
Cycle Track Condition Index
CTCI = 6.6
(CTCI = SCI)
Street Lighting
Number of old columns removed
31,170 no.
Non-Standard Street Lighting
Number of lanterns upgraded
2,297 no.
Milestone 10 Targets for District 12
Strategic Routes
Service Stream
Service Requirement
Carriageways (Hierarchy 1)
Network Condition Index
Amount
Required
NCI = 18.6
(NCI = PCI + SRI + SCI)
Footways
Footway Condition Index
FWCI = 6.6
(FWCI = SCI)
Verges
Verge Condition Index
VGCI = 6.6
(VGCI = SCI)
Kerbs
Kerb Condition Index
KBCI = 6.6
(KBCI = SCI)
Cycle Track
Cycle Track Condition Index
CTCI = 6.6
(CTCI = SCI)
Street Lighting
Number of old columns removed
10,341 no.
Non-Standard Street Lighting
Number of lanterns upgraded
1,034 no.
Pumping Stations
Number refurbished
15 no.
Traffic Signal Controllers
Replace if >15 years old
448 no.
Structures and Bridges
Strengthen decks
18 no. complete
Structures and Bridges
Strengthen parapets
55 no. complete
Tunnels
Upgrade to new standards
3 no. complete
How Independent Certifier (IC) certifies the Work
•Schedule 15 sets out detailed process
•For Milestones 1 and 2, following applies:
Carriageways, Footways, Verges and
Kerbs, Districts 1 – 11 – area (m2)
Confirm area treated by desk-top
study
Inspect 10% of streets treated to
check work has been done
Carriageways, Districts 12 - NCI
Validate data entered into Pavement
Management Model
Check calibration of survey machines
and accreditations of DVI staff
Footways, Kerbs, Verges, Districts 12
and Cycle Tracks Districts 2,9,11&12
Validate data entered into Pavement
Management Model
Check accreditations of DVI staff
Street Lighting
Desk-top study to count number of
columns removed. 10% audit of
design certificates and electrical test
certificates
Inspect 10% of streets to count
columns removed
Non-Standard Street Lighting
Desk-top study to count number of
lanterns upgraded. 10% audit of
electrical test certificates provided
No site visit required
Pumping Stations
Desk-top study to compare designs
with Asset Survey Reports. Validate
test certificates provided
Visit each site to check work has
been done
Traffic Signal Controllers
Desk-top study to verify number of
Controllers replaced. Validate test
certificates provided
Inspect 5% of streets to count
Controllers replaced
Challenges - allocation and transfer of risk
• Contract assesses risks carefully and has allocated to party best
able to manage
• Transferring risks gives incentives for Service Provider to improve
delivery through innovative and more efficient ways of working
• Optimum risk transfer reduces cost and gives greatest value for
money
• Payments aggregated into single lump sum contract
• Risks that cannot be managed attract a premium
• Asset, pricing, energy, weather and inflation risk all passed to
Amey
Risk transfer on Birmingham Highways
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Output specification – defines ‘what’ is required – Amey decides ‘how’
Payments aggregated into single lump sum payment – Amey risk
Inflation uplift linked to RPI – we predict actual contract cost increases
Productivity – Amey manages team to deliver affordable services
Failure to deliver services reduces payment to Amey
TUPE governs Ts and Cs and pensions of 240 people who transferred
Amey takes risk of accidents and third party claims related to the highway
Amey takes weather risk for winter maintenance in lump sum
Statutory Undertakers performance affects network condition
Energy:
- Amey responsible for consumption in kWh – hence LED street lights
- City Council keeps risk of unit price in £/kWh
Birmingham’s World Leading Street Lighting
•PFI enables long-term investment
•Global leading LED solution
•New technology/remote monitoring –
flexibility
•Improved visibility & community safety
•Approx 50% energy/carbon savings
•Dimming, trimming and harvesting
•Delivering council’s carbon reduction
targets
Innovation; Benefits of LEDs
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Energy and carbon reduction through
- Increased optical control
- Ability to dim street lights
- Efficient light source
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Energy savings of 50% (£2m p.a.)
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Increased reliability, less outages
leading to reduced maintenance costs
and better service
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Uniform lighting appearance leads to
improved visibility and feeling of safety
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Ability to amend lighting regime in the
future, future proof and flexible
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Reduction in sky glow and obtrusive light
Headcount – Resource Plan
Full establishment headcount
= 580 November 2011
H
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TUPE Transfer
7/6/2010 – Total
number of
employees 276
2010
2011
Worklessness Agenda and Apprentices
• Amey, Birmingham City Council, Skills Funding Agency
and Jobcentre Plus working together in partnership to
engage local workless people to promote access to jobs
and training
• Monthly steering group work together to ensure local
people benefit from training and employment
opportunities
• All recruited locally from young people unemployed for
over 6 months
• Future Jobs Fund scheme has already prepared young
people for work
• Developed an assessment centre to select trainees
• Assessment includes a number of processes such as
written, numerical, team exercises and a structured
interview
• All apprentices have access to gold award of the Duke
of Edinburgh scheme
Supply chain - key statistics – strategic supply
partners
Birmingham PFI Supply Chain Partner
Location
Total %
Birmingham
53.48%
West Midlands
33.23%
Other
11.24%
East Midlands
2.06%
Total
100%
• 90% of the total contract spend
is focused with strategic supply
base
• 88% of focused spend targeted
with suppliers in Birmingham and
the West Midlands
Birmingham
West Midlands
Other
East Midlands
Community Engagement
We have started several community engagement projects including:
Engaging with the ‘Midnight Bus’ to reduce crime whilst working at night
Turves Green Leisure Centre Community Day
LED Street Lighting Launch
Lord Mayor’s Birmingham PFI visit
Councillors drop-in sessions; 7 December 2010 & 12 January 2011
Presentations to Constituency Committees
Highway Stewards embedded in the communities
Health Safety and the Environment
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Target Zero Every Day
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Visible Felt Leadership
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Behavioural Safety
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Near Miss Reporting
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Alcohol and Drugs
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Personal Highways Safety
Achievements so far – one year on
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Full highway network survey
covering 2,500km of roads
• Full tree survey identifying
76,000 trees
• 250km of roads resurfaced
• 300km of pavements resurfaced
• 30,000 trees pruned
• 10,000 street lights installed
• 7,000 potholes repaired
Achievements so far – one year on
• 300 new jobs have been created, including
80 Apprentices and Trainees
• Up to 80 highways emergencies responded
to each day within an average of 28 minutes
• Over 60,000 calls and enquiries received
from members of the public
• 130,000 utility and highway works coordinated
• 1,200km of roads gritted each night during
bad weather
• 1,200 grit bins filled and placed around the
city
• Total of 48,000 miles of roads gritted
Media
Awards Won
• Project Finance Journal Awards - European Services PPP
Deal of the Year
• Jane’s Transport Magazine - European Road Finance
Deal of the Year
• Project Finance International Magazine - European PPP
Deal of the Year
• Considerate Contractors Award 2010
• Partnerships Bulletin Awards – Best Transport
Maintenance Project
• ICE West Midlands Awards - Sustainability Award
Forward Planning:
• Submission for a Personnel Today award – Award for Best
Original Employment Initiative
Summary
• Cost certainty and lowest whole life costs are built into the contract
price
• Smarter and more innovative ways of working are encouraged to create
lowest whole life cost
• Long term investment decisions will deliver best value approach
• Allocation of risk to party best placed to manage it
• New ways of working can be shared across the highways industry
• Birmingham will have best Local Authority roads in UK