PART 2
ITEM NO.
REPORT OF THE DIRECTOR OF DEVELOPMENT SERVICES
TO THE LEAD MEMBER FOR DEVELOPMENT SERVICES AND
TO THE LEAD MEMBER OF CORPORATE SERVICES
ON 23rd AUGUST 2004
TITLE: CADISHEAD WAY STAGE 2 – ACCOMMODATION WORKS TO BRIDGEMERE SITE
(formerly owned by Clariant)
RECOMMENDATIONS:
1. That approval in principle is given to a package of measures as detailed in paragraph 2.8 of
this report to enable the continued construction of Cadishead Way Stage 2.
2. That an exception be made to Part 4:Section 7 (Contractual Standing Orders) of the
Council’s Rules of Procedure to enable a negotiated price to be accepted.
3. That the Director of Corporate Services be instructed to complete the legal formalities
EXECUTIVE SUMMARY: Lead Member approved on the 15th December 2003 the award of
contract for the construction of Cadishead Way Stage 2 to Birse Civils Ltd. An important
factor for the successful construction of the scheme is the accommodation works to the site
formerly owned by Clariant, but now owned by Bridgemere Properties Ltd
BACKGROUND DOCUMENTS:
Reports to the Lead Member for Development Services as follows
Block 3 Transport Capital Programme 2003/04 and Structural Maintenance Revenue Programme
2003/04 - 12th May 2003
Approval of Contractors – 2nd June 2003
Appointment of preferred contractor – 3rd November 2003
Approval of award of Contract – 15th December 2003
Approval of Accommodation works to Univar – 22nd December 2003
(Available for public inspection)
ASSESSMENT OF RISK: Low
THE SOURCE OF FUNDING IS: The Transport Capital Programme (Block 3)
LEGAL ADVICE OBTAINED: Cobbetts Solicitors
FINANCIAL ADVICE OBTAINED: D McAllister
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CONTACT OFFICER : D A Dean – Extension 3866
WARD(S) TO WHICH REPORT RELATE(S): Irlam, Cadishead
KEY COUNCIL POLICIES: Safer Salford, Stronger Communities
DETAILS (Continued Overleaf)
Updated : 19/07/2002
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1.0
BACKGROUND
1.1
Government Office for the North West in their letter of the 25th November 2003
have confirmed funding of £19,905,000 for Cadishead Way Stage 2 as indicated
in the LTP expenditure settlement of December 2002.
1.2
Lead Member approved that the construction of Cadishead Way be awarded
Birse Civils Ltd., for the sum of £11,344,775.00.
1.3
The form of contract for the works is the Engineering and Construction Contract
(ECC) Second Edition published in 1995 by the Institution of Civil Engineers
using Option C Target Cost Contract with Activity Schedule. In this form of
contract, the contractor tenders a target price, but is paid actual cost. The target
price is adjusted as a result of compensation events. The difference between
actual cost and the adjusted target price is shared between the contractor and
the employer under a predefined mechanism.
1.4
The line of Cadishead Way required the acquisition of private land. A public
inquiry was held in May 2003 that resulted in the Compulsory Purchase Order
being confirmed in August 2003.
1.5
The report to Lead Member on the 15th December detailed that extensive
accommodation works were necessary to the Univar site (formerly Ellis and
Everard) on Martens Road and at the Bridgemere site (formerly Clariant) on
Hayes Road.
1.6
Accommodation works to the Univar site have been agreed and the expenditure
approved by Lead Member on the 22nd December 2003.
1.7
In the report to Lead Member dated 15th December 2003, reference was made to
extensive discussions with Clariant which addressed the effect of the construction
of Cadishead Way Stage 2 on the existing ground contamination, anticipated
remediation and future use of their site. Clariant’s consultant Celtic technologies
had been commissioned to produce a detailed design for the accommodation
works required. Their detailed design was valued at approximately £1,600,000.
This design however was not considered to be entirely satisfactory and a further
period of negotiation and discussion took place early in 2004.
1.8
In April 2004 the City Council received notification that the Clariant site had been
bought by Bridgemere Properties Ltd. Initial discussions with the new owners
suggested that the accommodation works that had been negotiated with Clariant
were not in accordance with Bridgemere’s proposals and requirements for the
site.
1.9
New discussions have produced an alternative strategy that will satisfy the
requirements of both Bridgemere and the City Council.
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2.0
DETAILS
2.1
Clariant used to treat and store a wide variety of hydrocarbon based chemicals,
and it is accepted that the site had become contaminated. In 2002, consultation
with the Environment Agency identified a risk to Controlled Waters and Clariant
undertook to develop a remediation strategy for the clean up of their site.
2.2
The existing site has a high proportion of impermeable concrete cover. A
drainage system collects surface water from these areas and delivers it through a
network of underground pipes to a drop shaft where it is pumped to storage in
three large above ground tanks at the south east corner of the site. The tanks act
to separate any oils, tars and solids from the water, which is then pumped around
the site to the United Utilities public sewer on Hayes Road.
2.3
Construction of Cadishead Way has a considerable impact on this drainage
system. The land acquired under the CPO process for the construction of the
highway contains two of the three large storage tanks and much of the pumping
system. Removal of the tanks can only be achieved if either an alternative
drainage layout can be provided, or a remediation package for the main site can
be developed to render the tanks redundant.
2.4
Initial discussions with Clariant explored both of the above options. However,
whilst the timescale of the highway construction became clearer, the remediation
and future end use of the main Clariant site remained less defined. As such the
emphasis was placed on providing an alternative drainage layout that would be
designed to free the CPO land for construction of the highway.
2.5
The City Council commissioned Clariant’s consultant Celtic Technologies to
design an alternative drainage system. Celtic’s design was based on providing
new underground storage tanks at the western side of the site adjacent to Hayes
Road. This system was designed to be gravity fed which removed the need for
much of the current pumping system, however, at a cost of £1.6m it was
considered to be very expensive.
2.6
As detailed in paragraph 1.8 above, Bridgemere Properties Ltd bought the
Clariant site in April 2004. Discussions with Bridgemere suggest that they have a
clearer plan for the future redevelopment of the site for the purposes of housing
and as such are more committed to undertaking a remediation process within the
near future.
2.7
The discussions with Bridgemere have been focused on developing a strategy for
the removal, rather than the diversion of the existing drainage system. However,
the economics of both strategies have been compared to ensure the most
advantageous for the City Council is chosen.
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2.8
The package of measures proposed below will allow the removal of much of the
existing drainage system from the Bridgemere site and clear the land acquired
under the CPO for the construction of Cadishead Way. A ‘Heads of Terms
document is currently being prepared and will form part of a legal agreement
between the City Council and Bridgemere Properties Ltd. Bridgemere will also be
undertaking extensive remediation works to their site at their own cost.
a) The City Council will construct at their expense alternative surface
water and foul water sewers and connections onto Hayes Road for the
future use by Bridgemere. – (These works will ensure Bridgemere remain
connected to the public sewer system and provide development potential for
their site. It is considered appropriate for these works to be carried out during
the reconstruction of Hayes Road. Bridgemere will provide to the City Council
confirmation that permission has been granted from United Utilities for any
connections required into the public sewers. Furthermore, Bridgemere will
enter into Section 104 agreements with United Utilities for the future adoption
of these new sewers. However, the City Council will undertake to construct
the sewers in such a manner as to enable their adoption.)
b) The City Council will break up the concrete slabs and building
foundations, crush to 6F2 material and stockpile for reuse and remove
the existing drainage from a defined proportion of the Bridgemere site.
(This work is important in making the existing drainage system redundant.)
c) The City Council will pay Bridgemere the sum of £225,750.00 as
compensation for the removal of contaminated hot spots from the site.
(The removal of contaminated hot spots is necessary to Bridgemere’s
remediation strategy and will reduce the risk of pollution once the drainage
system has been removed. Bridgemere anticipate having to remove in excess
of 10,000 cu,m of contaminated materials from their site and originally
requested that 5,000 cu.m, be removed by the City Council as part of these
accommodation works. Current rates for excavation and disposal value
Bridgemere’s request at £350,000. Changes to the Landfill Regulations 2002
became operational on the 16th July. Whilst the full implications of these
changes are as yet unknown it is probable that tipping charges for
contaminated materials will rise. Negotiations with Bridgemere have
concluded that Bridgemere will carry out all excavation and disposal of hot
spots from the site but that the City Council will pay the sum of £225,750 equivalent to 3225 cu.m at current rates, as compensation.
d) The City Council will construct at their expense an appropriate
interceptor trench for Bridgemere at the southern boundary of their site.
(The purpose of this 5.0m deep trench is to intercept any oil based
contamination in the groundwater and prevent pollution of the Manchester
Ship Canal. The City Council will ensure that the trench is suitable for
purpose but Bridgemere will be responsible for future operational and
maintenance costs.)
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e) Bridgemere will provide an appropriate letter of indemnity from any
future liability for the City Council as a result of the works carried out by
them and written confirmation that the proposals form part of a
remediation package which has the approval of the Regulatory Bodies.
(The City Council will be carrying out some of the works under instruction
from Bridgemere as part of Bridgemere’s overall remediation package for
their site. As such, Bridgemere will remain responsible for satisfying the
Regulatory Bodies as to the sufficiency of their remediation scheme.)
f)
The City Council will redesign and construct at their expense revised
access into the Bridgemere site. In return, Bridgemere will construct a
means of access into the land owned by Peel Holdings and transfer an
area of land to the east of Cadishead Way to the City Council. (The
access from Hayes Road onto the Bridgemere site was originally designed to
accommodate industrial traffic and the appropriate area of land was acquired
from Clariant under the CPO process. As Bridgemere intend the use of the
site to be residential, the access arrangements are considered to be an
uneconomic use of potentially developable land. It is proposed to redesign the
access arrangements and transfer the residual land back to Bridgemere. The
assumed value of this land has been factored into the calculations associated
with these proposals, so has the reduction in the reconstruction cost of Hayes
Road. There is also a plot of land between the Bridgemere boundary and
Cadishead Way that is owned by Peel Holdings but leased to Bridgemere.
This land had an access onto Hayes Road which was stopped up by the CPO
/ SRO procedure. It was a condition of the CPO / SRO procedure that access
to this Peel owned land is maintained. If access to this Peel land can not be
provided, the City Council would be obliged to acquire it. As part of the
proposals Bridgemere will construct an appropriate means of access from
their land, and guarantee the right of access from Hayes Road for Peel
Holdings. In addition, Bridgemere will transfer a further area of redundant land
to the east of Cadishead Way which the City Council would otherwise have
been obliged to acquire under the CPO / SRO process.
g) The City Council will facilitate access to the bypass prior to completion
for remediation traffic to the Bridgemere site (Bridgemere have been
advised by the Planning Officer that any traffic associated with the
remediation of their site must use Cadishead Way and not Hayes Road.
Details of their remediation traffic are expected to total approximately 20
vehicular movements per day. It is considered appropriate to allow this traffic
through the roadworks under supervision and thus enable Bridgemere to
commence remediation before the Cadishead Way is completed. Access will
only be permitted during the normal working hours of the Cadishead Way
scheme.)
h) The City Council will remove and dispose of at their expense the
existing drainage tanks, foundations and associated plant from the site,
as they become redundant by the completion of other works.
i)
The City Council will construct a close boarded timber fence along the
southern boundary of the Bridgemere site (Bridgemere have requested an
amendement to the concrete post and chainlink fence which was to be
erected around the former Clariant site as part of the highway scheme)
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j)
Bridgemere will grant approval for the City Council and their
Contractors to enter Bridgemere land for the purpose of carrying out the
works listed above.
3.0
FINANCIAL DETAILS
3.1
Government Office for the North West in their letter of the 25th November 2003
confirmed funding of £19,905,000 for Cadishead Way Stage 2 as indicated in the
LTP expenditure settlement of December 2002. The budget for the scheme as
identified at that time is set out below;










Costs already incurred and committed in 2003/04 Landscaping contract (post highway construction) Land Purchase estimated costs Accommodation works to Univar (E&E) Accommodation works to Clariant (now Bridgemere) Service Diversions Site Supervision costs
Works revised target sum
Available contingency for works
TOTAL SCHEME COSTS
£ 708,000
£ 500,000
£2,500,000
£1,307,000
£1,600,000
£ 252,000
£ 906,000
£11,345,000
£ 787,000
£19,905,000
3.2
The detail of the current proposals for the works to the Bridgemere site is still
incomplete, however, it is anticipated that the total cost to the contract will be in
the region of £855,000, offering a considerable saving to the scheme.
3.3
The construction of Cadishead Way is progressing well and the accommodation
works to the Bridgemere site are seen as the most significant unresolved element
that may affect the outcome of the project. Quotations from Birse have already
been used to assess the viability of the proposals and it is recommended that an
exception to Part 4; Section 7 (Contractual Standing Orders) of the Council’s
Rules of Procedure be made to enable Birse to undertake the civil engineering
works required above as a variation to the construction contract for Cadishead
Way. The variation will be treated as a compensation event as detailed in
paragraph 1.3 above and it is hoped that savings may arise when the works are
constructed. In accordance with the terms of the contract, any such savings will
be shared on a 50:50 basis between the Council and the contractor.
3.4
A significant element of the proposed accommodation works lies within the site of
the highway contract. The introduction of a contractor other than Birse would
create major contractual complications
4.0
CONCLUSION
4.1
The construction of Cadishead Way Stage 2 will both relieve the centre of
Cadishead of much through traffic and also provide better access to the
Northbank Industrial Estate. Completion of the accommodation works to the
Bridgemere site will enable construction to continue towards completion.
Malcolm Sykes
Director of Development Services
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