1
Outline Business Case Template 24th March 2016
1 Summary Information
Project name Access to the Southampton Airport Economic Gateway (SAEG)
Delivery Location Eastleigh Borough
Lead applicant
organisation
Hampshire County Council
Postal address Strategic Transport,
The Castle,
Winchester
SO23 8UB
Email address [email protected]
Phone number 01962 846089
Project lead name Heather Walmsley
Partner names Eastleigh Borough Council
Southampton Airport
Project summary This Outline Business Case seeks funding for infrastructure improvements necessary
to:
open up the regionally significant strategic development sites at Southampton
Airport Economic Gateway (SAEG);
improve access to the Southampton International Airport;
complement and add value to the recently completed improvements to the M27
Junction 5; and
enhance access to the former Ford site, which is being developed by
Mountpark for logistics uses.
The key SAEG development sites are two greenfield sites on land owned by
Southampton Airport and Network Rail. The sites are largely located to the north east of
the airport runway and to the south of the Botley railway line and are currently land
locked with development frustrated by lack of access. There are also proposals to
redevelop the Barton Park Industrial site north of the Botley railway line, which is
accessed via the B3037 Bishopstoke Road and the Chickenhall Lane cul de sac.
Access to Southampton Airport is frustrated by the existing single carriageway road over
rail bridge and Spitfire and A335 Wide Lane roundabouts at either end of the bridge.
The existing bridge has a poor alignment which results in Heavy Goods Vehicles
(HGVs) being unable to traverse the bridge without crossing the road centre line and
using the opposing carriageway.
Access to the SAEG land has been proposed via the Chickenhall Lane Link Road
2
(CLLR), for many years. The CLLR would connect the B3037 Bishopstoke Road to the
M27 Junction 5 via: an extension to the existing Chickenhall Lane; a new bridge across
the Botley railway line; and a new bridge across the main Southampton line and A335.
The CLLR would thus provide access to the greenfield and redevelopment sites both
north and south of the Botley railway line, as well as providing improved access to
Southampton Airport. The scheme would build upon recently completed improvement
works at the M27 Junction 5 helping to optimise the effectiveness of the approaches
from north of the motorway. The scheme would also provide congestion relief on the
A335 through Eastleigh town centre and in the designated Air Quality Management
Area.
Notwithstanding the above the scale and engineering complexities associated with the
CLLR present significant delivery challenges with associated high costs. The high costs
are due in part due to the complex nature of the scheme located adjacent to a live
railway line and the requirement for track closures and associated compensation costs
to rail operators due to the busy nature of the line.
In light of the above a phased approach to delivery is being proposed as part of this
business case. As an initial phase opportunities are currently being investigated to bring
forward access to the SAEG sites south of the Botley line, based around an updated
version of the southern section of the CLLR. The modified scheme could include
improvements to Wide Lane bridge and Spitfire roundabout to the north of the M27
Junction 5 if feasible, however once again there are significant engineering challenges
and complexities associated with crossing the live railway lines.
In accordance with the above this business case seeks funding for a first phase of the
infrastructure necessary to open up the SAEG sites to the south of the Botley railway
line. The precise scheme details and extent of the improvements are currently being
developed, however, the scheme will aim to deliver a significant uplift in highway
capacity to future-proof the network and make it more resilient and will facilitate access
to the SAEG sites. It will also provide a ‘gateway’ to Southampton Airport enhancing its
status as a regional hub.
Funding is required due to the anticipated significant costs of the scheme that cannot be
met by local public and private sector funding alone.
Not delivering the project will impact upon the attractiveness of the SAEG sites and will
limit any significant development on this land. It is also likely to limit ability of the airport
to expand its operations.
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2 Strategic Case
What problem or
opportunity is the
project seeking to
unlock?
The Southampton Airport Economic Gateway (SAEG) in its entirety is in excess of
100 ha in size and presents the largest opportunity for commercial development in
the Solent LEP area. (see plan in Appendix A for red line boundary of site) It is
estimated to be capable of accommodating over 1.8m sq ft of commercial
floorspace1 and consists of brownfield and undeveloped land in multiple ownerships.
Enabling the development of 2 parcels of land within this that are owned by
Southampton Airport and Network Rail is a critical first step in stimulating the
development of the wider SAEG site. Both are greenfield sites but currently have no
means of highway access and are further constrained by the adjacent airport runway
and two main railway lines and associated loop line.
SAEG, formerly recognised in planning policy as Eastleigh Riverside2 , has been
identified as having the potential to contribute significantly towards the economic
growth aspirations of the sub-region in both Eastleigh Borough Council’s adopted
(2001-2011) and emerging Local Development Plans (2011-2029).
Whilst it is strategically significant given its capacity to deliver much needed
employment space in both the Borough and the Solent LEP area, the site has
remained undelivered since its initial allocation. Access to the site is constrained by
ecological designations to the east, the M27 motorway to the south, the Botley
railway line to the north and Southampton Airport and Southampton Airport Parkway
railway line and station to the west. The A335, which provides the main artery route
into Eastleigh town centre from the M27 motorway, is also located to the east of the
site. These access constraints, combined with a depressed development market
and complex landownership arrangements have been key contributors to the site
remaining undelivered.3
Consequently, it has been recognised that the development of the site could be
brought forward incrementally rather than as a whole, prioritising deliverable sites
which could be unlocked by phased infrastructure interventions in the shorter term.
Land within the ownership of Southampton Airport, Network Rail and the
decommissioned former Ford site have been identified as key enablers to bring
forward initial development, acting as catalysts for the delivery of the wider site.
A significant proportion of the former Ford site has recently been purchased by
developer Mountpark for the development of 45,198 sq m of warehousing and
industrial uses and work is already underway to progress this development. This in
itself presents a major opportunity for the Solent to meet much needed demand for
logistics space in the South Coast market for which there is a critical lack of supply.
1 Hampshire Key Development Sites Portfolio, February 2016. Figures also calculated from the Southampton Airport
Economic Gateway Enterprise Zone application, 2015 and include the redevelopment of the former Ford site.. 2 The former Ford site was not included as a development site within the original planning policy for Eastleigh
Riverside. Riverside but is now considered to be part of the Southampton Airport Economic Gateway site.
3 A Vision Strategy for Southampton Airport Employment Hub, ARUP, February 2015.
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The ‘unlocking’ of land owned by Southampton Airport and Network Rail for
development through the provision of the infrastructure improvements outlined in this
business case, presents an opportunity to provide much needed grade A office
space for business at a gateway location into the city of Southampton.
There is increasing consensus amongst commercial property agents operating within
the M3 and South Coast markets that there is a growing supply and demand
imbalance of quality, grade A office space. A number of development sites that were
once allocated for offices have now either been converted to alternative uses or are
subject to planning applications for change of use and this trend is predicted
continue in 20164.
In the South Coast market, Lambert Smith Hampton is predicting that in 2016 the
supply of office space will fall to below three year’s supply5. This decrease in office
supply has been an occurring trend since 2013 for the South Coast.
Although in their recent national report Lambert Smith Hampton have reported that
take up was 31% above the 10 year average in the South Coast market,
transactional activity in the first quarter of 2016 has been subdued6. Only one office
building remains available over 40,000 sq ft with its own front door7. The only
speculative development currently underway comprises a single scheme of 30,600
sq ft at Southampton Science Park, due for completion in Autumn this year and in
Portsmouth and Southampton, office conversions for alternative uses, including both
residential and student accommodation continue to impact on city centre supply8.
Additionally, in Southampton city centre a tired office market is resulting in a difficulty
to attract new jobs and even retain existing employers. In 2015, HSBC relocated out
of Southampton due to the lack of available, grade A office space in the city centre
that could accommodate their need for additional space. This resulted in 1000 jobs
and their spending power being lost to an out of city location, which undoubtedly has
generated more car usage and associated congestion along the M27.
The development of the land owned by Southampton Airport and Network Rail
provides the opportunity to fulfil the demand for grade A office space within the
South Coast market, which is currently at a tipping point due to the severe lack of
supply.
Employment space developed in this location would benefit from being situated in
close proximity to a transport hub which has the advantage of being globally
connected with links between air, rail and strategic highway. This level of
accessibility is highly sought after by businesses and investors. Southampton
Airport provides flights to over 50 destinations with world-wide connections, including
4 Lambert Smith Hampton, South Coast Office Market Report November 2015.
5 Lambert Smith Hampton, South Coast Office Market Briefing 2016.
6 Lambert Smith Hampton 2016 National Office Market Report, February 2016.
7 Lambert Smith Hampton, Twitter, 27th April 2016.
8 Lambert Smith Hampton 2016 National Office Market Report, February 2016.
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to major European business districts such as Munich and Hamburg. Southampton
Airport Parkway train station also provides a direct train service to London Waterloo
in 69 minutes and the site itself sits within the M27/M3 corridor, which are integral
points on the strategic road network that connect to the M25 and the A34 to the
Midlands and the North.
Furthermore, the development of prime office space in this location would also be
well positioned to capitalise on an overheating office market in central London, which
is already leading to high take up rates in the Thames Valley and key urban centres
outside the capital such as Reading. This is evidenced in recent major relocations
including Lloyd’s Register to Southampton, Time Incorporated to Farnborough and
EDF and Rio Tinto to the Thames Valley.
How does the project fit with the Solent LEP's Strategic Priorities?
Unlocking sites for housing and employment
The development of the land owned by Southampton Airport (21.6ha) and Network
Rail (7.9ha) have the capacity to deliver up to 75,190 sq m and 29,400 sq m
respectively of new employment floor space over a ten year period9. As indicated in
the footnote below, there is a degree of variation to the floorspace capacity figures
generated for these two sites and these have further been outlined in Appendix B.
Based on these floor space calculations within the Southampton Airport Gateway
Enterprise Zone Bid, (2015), it is estimated in the order of gross 5,000 jobs could be
created over a phased ten year period should both the land owned by Southampton
Airport and Network Rail be developed for a range of B1a (office) and B1b (light
industrial) uses. This investment associated with unlocking these sites is projected
to add approximately £170m in net additional output (GVA in 2011 prices) to the
economy10.
The redevelopment of the former Ford site, which consists of 16.11 hectares of
brownfield land of which 10.7 hectares has been bought by developer Mountpark, is
more advanced in nature and a planning application is soon to be submitted for its
redevelopment. Pre-application discussions with Mountpark indicate that up to
45,198 sq m of floor space for B8 (warehousing) and B2 (industrial) and B1(c) (light
industrial) uses is to be created. Up to 690 jobs are associated with Mountpark
unlocking this part of the site initially, 420 of which are expected to be net
additional11. This investment is projected to add about £23m in net additional GVA
(in 2011 prices) to the economy. Please see Appendix D for further information.
Should the site be developed in full, it is estimated that up to 1,338 jobs could be
created in the longer term.12
9 These floor space calculations are based on those proposed within the Southampton Airport Economic Gateway
Enterprise Zone, (2015) submission. A range of floorspace estimates for these two parcels of land have been undertaken by Eastleigh Borough Council as part of their Strategic Land Availability Assessment, (2015). These are summarised in Appendix 1. 10 This analysis is based on the latest government guidance available at: HMT (2003) The Green Book available at: http://www.hm-treasury.gov.uk/data_greenbook_index.htm 11 The job numbers associated with the former Ford site are estimates only as the planning application for the site’s redevelopment which is anticipated to provide this information has not yet been submitted. Calculations on how the job and GVA estimates have been calculated are shown in Appendix D. 12 Southampton Airport Economic Gateway Enterprise Zone bid, 2015.
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As evidence in Appendix B there is some degree of variation in the floorspace and
estimated job figures associated with the development of the land owned by
Southampton Airport and Network Rail. This is reflective of the absence of robust
figures relating to the development of these two sites, which would only be available
if a full economic impact assessment were to be undertaken and we would look to
progress this with key stakeholders including the Solent LEP, Eastleigh Borough
Council, Network Rail and Southampton Airport following on from the submission of
this bid.
The provision of new employment space in this location aligns with the Solent LEP’s
vision to create sustainable economic growth, attract private sector investment into
the Solent region and thus create new jobs and increase GVA. Southampton Airport
and Eastleigh Borough Council are also in dialogue with the University of
Southampton regarding the creation of a new Science Park on the airport’s land as
an extension to the existing campus in Chilworth, Southampton.
Improving our connectivity within the Solent and beyond
Unlocking both the land owned by Southampton Airport and Network Rail will enable
much needed employment development at a key transport enabled economic nexus
in a gateway location close to the centre of Southampton. SAEG is situated north of
the M27 Junction 5 and has ready access to the M3 heading north from
Southampton. The sites are in close proximity to an international airport and adjacent
to Southampton Airport Parkway Railway station which provides a direct train service
to London Waterloo within 69 minutes. Eastleigh town centre railway station is also
located in close proximity to the north of the site (please refer to site map in
Appendix A). The site is also within close proximity to two international ports in the
cities of Portsmouth and Southampton.
Highway infrastructure improvements are much needed to support the development
of the SAEG sites. Improvements will not only provide direct access to the site but
will also improve connectivity to the strategic road network within the Solent and
beyond. Improved accessibility will help bring forward much needed employment
space in a globally connected location which is highly sought after by business.
Stimulating and supporting innovation
Discussions are underway with the University of Southampton regarding the
development of Southampton Airport’s land for an extension to their existing and
highly successful Science Park at Chilworth. The University of Southampton is a
long standing and highly successful science park with a strong emphasis on the
commercialisation of technology and supporting business growth.
The current 18.2 ha campus in Chilworth accommodates over 100 high-tech
business start-ups and 1,100 jobs, but with occupancy at 90% and with no further
room to grow the campus will soon run out of capacity to provide new space. Land
for expansion is much needed to ensure the continued growth of the Science Park.
Development on the SAEG sites would consist of a range of business, R&D and light
industrial uses on the land owned by Southampton Airport and potentially, the land
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also owned by Network Rail. The University of Southampton are considering a
phased programme that would deliver around 9,000 sq m initially13. Southampton
Airport have also indicated that they would safeguard some of the land within their
ownership for ancillary airport uses.
Businesses within the University of Southampton Science Park are supported by the
SETSquared partnership. This is a business incubation support service established
between the Universities of Southampton, Bath, Bristol, Exeter and Surry which was
recently ranked the global Number 1 University business incubator (UBI Global,
2015).
Providing development land that can accommodate the continued growth of the
Science Park and provide the space needed by additional start-ups to allow them to
access support through the SETSquared Parternship aligns with the Solent LEP’s
ambition to work with Higher Education Institutes to accelerate high value,
innovation-led growth. The Solent LEP is prioritising high tech development and
spin-off from University research under its Innovation work stream and therefore
enabling the development of these two sites for a second Science Park supports this
objective. This also supports national policy which is aiming to encourage better
collaboration between universities and the business community.
Improving the skills and talent of our current and future workforce
As well as the potential for the site to accommodate grade A office space,
discussions are already underway between Southampton University, Eastleigh
Borough Council and Southampton Airport regarding the development of
Southampton Airport’s land as an extension to the successful and well established
University Science Park based in Chilworth. This is to meet the future property
needs of high value, bio-medical and manufacturing firms as the existing Science
Park at Chilworth reaches its development capacity.
The 2014 Research Excellence Framework confirmed that the University of
Southampton is ranked 8th amongst UK universities as a leading research
institution14. It provides Higher Education students with access to world class
research facilities in the following disciplines: marine engineering, microelectronics
and computer science, ocean and earth science, developmental origins of health and
disease and sound and vibration optoelectronics. The University of Southampton
Science Park provides space for University ‘spin-offs’ to develop and grow.
Providing adequate space for these spin-offs alongside high quality business support
through the SET Squared Partnership will improve the skills and talent base of our
current and future workforce.
Supporting business growth through access to
Enabling the development of Southampton Airport and Network Rail’s land through
facilitating access to these sites will provide the opportunity for much needed office
space to be developed to meet existing market demand. This will support the growth
13
Southampton Airport Gateway Enterprise Zone Bid, 2015. 14
Southampton Airport Economic Gateway Enterprise Zone bid, September 2015.
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resources and advice
of existing businesses looking for premises to expand into, as well as providing office
space for new businesses looking to relocate in the Solent.
Both sites also present the opportunity to provide the space needed for the
University of Southampton Science Park to expand and grow. This expansion will
provide grow on space for additional business start ups which will benefit from
support through the world-renowned SETSquared Partnership.
Supporting our key strategic sectors
The Solent LEP has a focus on developing strategic sectors and clusters of marine,
aerospace, defence, advanced manufacturing, engineering, transport and logistics
businesses – with the aim of establishing the area as a business gateway, both at
local and international levels15.
Improving access to both Southampton Airport and Network Rail’s land will help, in
the long-term, to unlock these two critical employment sites which can then be
developed to provide business space to support these strategic sectors in a globally
connected gateway location. Given the sites positioning, businesses within the
aerospace, transport and logistics sectors will benefit from new employment space
developed in this location, as well as businesses within the ICT, Business and
Financial Services sectors.
How will the project
raise productivity in the
Solent?
Improving access to Southampton Airport and Network Rail’s land to facilitate their
development for a second University of Southampton Science Park aligns with
national Government policy which seeks to strengthen the linkages between
universities and businesses and encourage local investment.
The Transforming Solent Productivity and Growth Supplement, published in January
2016, highlighted that for the Solent LEP to capitalise on its strengths and raise
productivity the following must be undertaken:
• Invest in economic infrastructure
• Develop the skills that the Solent LEP economy needs to succeed
• Ensure that ideas and knowledge are at the forefront of the Solent LEP’s
approach, supporting businesses to innovate, export and grow and;
• Build on the Solent area’s sectoral strengths and recognise its comparative
advantage.
The Solent LEP has also made clear it’s ambition to increase GVA by 3% per
annum year which is a challenge given that output per capita is 18% below the south
east average16.
The development of Southampton Airport and Network Rail’s land will provide space
of the right type and quality, alongside a strong business support offer to enable
15
Solent LEP, A Strategy for Growth, December 2012. 16
Southampton Airport Gateway Enterprise Zone bid, November 2015.
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businesses to innovate, export and grow. This could be in the form of new grade A
office provision alongside smaller space for SMEs. Whilst the development of these
two sites will inevitably provide space for the expansion of existing businesses within
the Solent, it will also be driven by the development of new businesses locating into
the area and utilising the workforce.
How will the proposal
demonstrate
additionality?
Enabling access to the land owned by Southampton Airport and Network Rail will
facilitate the development of additional employment space to meet the demand for
grade A office space. If discussions come to fruition, both sites (subject to demand)
could also be developed as an extension to the University of Southampton Science
Park, which would provide additional spin out space for start-ups and SMEs.
Whilst the development of these two sites will inevitably provide space for the
expansion of existing businesses within the Solent, it will also be driven by the
development of new businesses locating into the area and utilising the workforce. At
the current time, the development potential of these two sites is inhibited by poor
infrastructure restricting access to the site and this will remain the case without
intervention.
Describe the wider
economic impacts of
the proposal
The SAEG is the largest employment site in the Solent, capable of accommodating
over 1.8 million sq ft of employment space (this includes the development of the
former Ford site). The development of the two land parcels within this owned by
Southampton Airport and Network Rail is envisaged to act as a catalyst towards the
development of the wider site and therefore improving access to these sites is the
first step towards achieving this longer term ambition.
The sites development will provide a globally-connected employment hub in a highly
sought after gateway location into central Southampton, as well as help to improve
the position of Eastleigh as a business location to attract inward investment and
capitalise on businesses looking to relocate outside of London.
Describe the social
impacts of the
proposal
The development of the SAEG site will provide much needed employment for a
growing local population and population and also has the potential to accommodate
a range of apprentice opportunities during the construction phases. It will secure
and safeguard a range of job opportunities in a location which is easily accessible
and within a key journey to work travel area at the gateway to Southampton city
centre.
Outputs (For each, explain where the output will be delivered (in Solent or outside), and the basis of
your calculation).
Number of new Up to 6,300 jobs to be created in the Solent area as defined above. These figures
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permanent jobs created
directly
only include the development of the former Ford site, Southampton Airport and
Network Rail land.
Number of new
permanent jobs created
indirectly
Unknown
Number of safeguarded
jobs
Improved infrastructure and connectivity will help to maintain strong transport links
which are essential to both retain existing as well as to attract new businesses.
Without transport infrastructure improvements worsening traffic conditions will make
the area less attractive as a business location and could be a contributory factor in
firms relocating to other better connected areas.
New houses enabled Not applicable
New employment /
education space
enabled (type and m2)
Southampton Airport’s land: 75,190 sq m
Network Rail’s land: 29,415 sq m
Former Ford site: 45,198 sq m (already to come forward but transport
improvements will support the development of this site by improving pinch points
on the highway network.
Skills Estates improved
(type and m2)
Not applicable
Skills outputs
(apprentices / learners)
In the longer term, businesses occupying new employment space at both
Southampton Airport and Network Rail’s land are anticipated to employee and
element of apprentices but the exact number is unknown.
Total wider leveraged
investment resulting
from project
Estimated to be in the order of £142,000,000 into the Solent area. See Appendix B
for information on how this has been calculated.
Describe any other
outputs to be delivered
as a result of this
project.
The scheme will provide access to a multi-modal transport interchange with
associated wider transport connectivity benefits linked to modal shift thereby
helping to reduce peak hour congestion on the strategic road network.
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3 Economic Case
Explain how the proposal will
provide value for money, and
what is the basis for your
assessment?
A full webtag compliant cost benefit analysis has not yet been undertaken for
the scheme.
Nevertheless value for money will be achieved through not only the highway
elements and strategic connectivity that will be provided as part of the access
strategy for the new sites, but also and most fundamentally through the
economic advantage that unlocking the SAEG sites will achieve.
Provide a list of the options
that have been appraised?
(where applicable)
A number of options have been and are currently being explored including:
1. Do Nothing – this would not achieve the regional growth ambitions for
the SAEG sites, hence has not been pursued;
2. Delivery of an updated CLLR as a single scheme –the scale and
engineering complexities associated with the CLLR present significant
delivery challenges with associated high costs. The high costs are due in
part due to the complex nature of the scheme located adjacent to a live
railway line and the requirement for track closures and associated
compensation costs to rail operators due to the busy nature of the line,
hence this option is likely to be difficult to achieve in the short term;
3. Delivery of an updated CLLR as a phased scheme, with a southern
section coming forward as the initial phase – opportunities are
currently being investigated to bring forward access to the SAEG sites
south of the Botley line, based around an updated version of the southern
section of the CLLR. The modified scheme could include improvements
to Wide Lane bridge and Spitfire roundabout to the north of the M27
Junction 5 if feasible, however once again there are significant
engineering challenges and complexities associated with crossing the live
railway lines, which require further investigation. The precise scheme
details and extent of the improvements are currently being developed,
however, the scheme will aim to deliver a significant uplift in highway
capacity to future-proof the network and make it more resilient. The
scheme will achieve objectives that will facilitate new access to the SAEG
sites. It will also provide a ‘gateway’ to Southampton Airport enhancing its
status as a regional hub.
For transport schemes only:
Provide details and outputs
of a WebTAG Assessment
undertaken.
A full webtag assessment has not yet been completed.
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4 Financial Case
2016/17 2017/18 2018/19 2019/20 2020/21 Total
Local Private Sector
Contributions
£x tbc £x tbc £x tbc £ £ £tbc?
Local Public Sector
Contributions
£ £ £ £ £ £0
Local (other)
Contributions
£ £ £ £ £ £0
LGF Funding Request £xx £xxx £xxxxx £xxx £x £25-45m?
Total Project Costs £xx £xxx £xxxxx £xxx £x £25-45m?
Are local funding contributions
confirmed, and if not, when will
they be confirmed?
There are currently no local funding contributions confirmed. Contributions
towards the scheme cost could be sought from Southampton Airport
(improved access), and potentially other developers eg NR on the southern
SAEG sites. Contributions could be sought from Eastleigh BC as promoters
of the SAEG sites.
The potential for other local funding is likely to be limited however work to
identify opportunities in this respect will be investigated.
What are the key financial
risks?
Not fully known at this stage, however the following are likely to be key:
- crossing the main railway line presents significant risks which have
cost implications not least in relation to the requirement for railway
possession orders prior to any work on the line with associated high
compensatory costs;
- insufficient funding available to cover costs of scheme;
- 3rd party land not acquired through negotiation – need for CPO;
- Unknown statutory undertakers plant.
Has any sensitivity analysis
been undertaken on costs?
Cost estimates will be provided following ratification of scheme details
through completion of feasibility / preliminary design. Costs will be subject to
further analysis and refinement as the scheme progresses. A quantified risk
assessment will be undertaken and risks costed, optimism bias and
contingency will reflect the nature of risks identified and the stage in the
design process. A monte carlo simulation can be undertaken to provide a
sensitivity analysis.
Is the proposal compatible with
EU State aid regulations?
Yes – No specific new developments will be directly linked to it in terms of
delivery. Addressing an existing highway problem, albeit one that improves
access to certain sites, e.g. Airport, Riverside, Former Ford site
Any other information or
further comments on the
proposal not captured in other
sections of this form
Not known at this time.
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5 Commercial Case
Provide details of your
contracting and
procurement strategy?
It is currently anticipated that the works would be procured via the Generation 3 Civil Engineering, Highways and Transportation Infrastructure Works Framework 2016-2020 (GEN3). The GEN3 Framework was introduced in April 2016 with a number of selected contractors in the framework.
Framework contractors’ performance will be monitored using Key Performance Indicators (KPI) and other performance data. ‘Green’ performing Framework contractors are incentivised and tender submissions are weighted depending on current dashboard status. This mechanism provides an incentive for the Framework Contractors to maintain a high quality of work and standard of service whilst working for HCC. The GEN3 framework has been demonstrated to provide value for money and this procurement route is also most suitable for the proposed delivery timescales for the scheme, for instance when compared to the OJEU process which would extend the delivery programme significantly.
There are three different GEN3 framework levels which could be used dependent upon the nature and value of the works. Hence the exact part of the framework which will be used will need to be determined once the scheme costs are more precisely understood.
The GEN3 (2) Framework is available for use by HCC and other authorities across Southern England.
Please set out the key project risks in this table:
Risk
Mitigating Actions Contact
Responsible
Review
Date
RAG Rating for
Risk
Engineering complexities
associated with working
adjacent to and across main
railway lines;
Progress design to a stage
solutions are identified
Heather
Walmsley
tbc
Engineering complexities
associated with constrained
site and level difficulties
resulting in unacceptable
gradients and other
departures from standards;
Progress design to a stage
solutions are identified;
Detailed construction
methodology to be agreed
between all stakeholders.
Heather
Walmsley
tbc
Unknown NR constraints/
issues;
Work closely with NR to
understand issues.
Heather
Walmsley
tbc
Unknown Statutory
undertakings issues;
Seek early engagement
with Stats companies to
help inform design where
appropriate and undertake
Heather
Walmsley
tbc
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detailed investigations prior
to works commencing
The scheme which is most
feasible doesn’t achieve all of
the stated objectives;
Seek to adapt the design as
work progresses to
maximise benefits.
Heather
Walmsley
tbc
Prohibitively high scheme
costs and cost increases
Undertake value
engineering at the
appropriate stage in the
design process. Allowance
to be included for OB and
contingency.
Heather
Walmsley
tbc
Land acquisition requires
CPO
Allow appropriate time in
programme and cost risk
accordingly.
Heather
walmsley
tbc
Political intervention Liaise with relevant
authorities
Heather
Walmsley
tbc
Expected delivery start date (quarter / year)
Q1 2018/19 tbc
Current status of the scheme (feasibility / outline
design / detailed design)
Outline feasibility design stage
What consents are required, and are these in
place? If not, when will they be in place?
Planning Permission not required.
BAPA Agreement with NR completed and further NR
consents will be secured at the appropriate stage.
Third party land will be required and hence the need for a
CPO cannot be ruled out at this stage.
Ecological constraints have not yet been assessed.
Are there any constraints and dependencies, if
so, what are these?
Links to development start dates will be critically tied to the
completion of the access to the sites, hence trajectories
need to be aligned to the delivery of the access..
Key dependencies that are critical to the successful
delivery of the planned programme include:
Agreement with Network Rail;
Funding allocation / agreement in place;
Timely procurement of contractor;
Project appraisal (G3) approval by the HCC
Executive Member for Economy Transport and
Environment;
Acquisition of the land required;
The scheme requires possession of the railway lines to be
agreed with Network Rail (NR) and agreement also needs
to be reached regarding construction methodology and
geometrical design requirements that NR have.
The scheme requires land acquisition and early
negotiations / discussions have taken place with relevant
landowners. At this stage, it is not known whether a CPO
15
process will be required (although this will be advanced in
a parallel with ongoing negotiations to mitigate impacts on
timescales if it is required).
From an engineering perspective, the scheme is complex
due to the tight working space for construction due to the
proximity of live road and railway lines, which pose
significant constraints. As noted above there are
requirements for possessions of the railway line in order to
safely construct the new bridge.
16
6 Management Case
Who is the project
manager/client?
Heather Walmsley
Set out the key decision
points
HCC Exec Member for Economy and Transport (EMET) approval to progress
detailed design for preferred scheme
Funding Award confirmed.
Agreement with Network Rail over scheme design and construction
methodology.
HCC Exec Member for Economy and Transport (EMET) Project Appraisal
HCC Exec Member for P&R approval to commence negotiations to acquire land
CPO if required / Third party land acquisition.
Procurement of contractor./ Contract Award
Set out the key actions and milestone to enable delivery of this project
Action / Milestones Target
Completion
Date
Person
Responsible
Current Position
(Including risks /
mitigation if necessary)
Feasibility design 2016 Ongoing
Confirmation of scheme funding from LEP/DfT 2016? SLEP
Note: all dates below are subject to review
following funding confirmation hence are
indicative only at this stage
HCC EMET approval to progress design 2016 HCC
Agreement with Network Rail over scheme
details
2017 HCC
Third Party Land Acquisition / CPO process 2016/17/18 HCC
Construction methodology agreed with all
stakeholders
2017/18 HCC
Detailed design completed 2018 HCC
Agreement of funding contributions from
Private/Public sector
2017/18 HCC/others
Project Appraisal approved by HCC EMET 2018 HCC
Tender and Contract period 2018/19
Procurement of contractor 2018/19 HCC
Main construction works commence 2018/19
Construction complete 2020
17
Set out the
governance
framework that
will be in place
What is the
proposed
reporting and
approval process
The Hampshire County Council Executive Member for Environment and Transport has
overriding accountability for transport projects which are overseen by the Strategic
Transport Group. Beneath this, the design team working group and project working
groups will report to the Major Schemes Project board (Solent LEP area).
The Client Manager will chair a project co-ordination group comprising of representatives
from the relevant groups involved in scheme progression.
Approvals from NR will be sought alongside appropriate stages in scheme development.
18
7 Declaration and Checklist
The below declaration is an essential part of the application form and must be completed by all applicants.
Failure to complete the declaration will result in your application not being considered.
Do you have any existing business relationships with
the Solent LEP or Investment Panel members?
No
If Yes please give details:
Have you previously applied for any Solent LEP
funding?
Yes
If Yes please give details in the table below:
Organisation Name Date of Application Awarded (Yes / No)
Hampshire County Council Various Yes
Please confirm:
I will answer all questions on this application form
relevant to my application.
Yes
I have read and understood the information in the
relevant Guidance document and, to the best of my
knowledge, I am eligible to apply.
Yes
I declare that the information I will provide in this form
is, to the best of my knowledge, correct.
Yes
I understand that answers may be used in response
to Freedom of Information Act 2000 requests and
these will be released pending further consultation
with me.
Yes
I understand that, if successful, my application may
be made public with the exception of any information I
have indicated as commercial in confidence.
Yes
The level of Solent LEP grant funding requested is
within the threshold as published in the relevant
Guidance.
Yes
I understand that Panel decisions in relation to my
Full Application are final and there is no right of
appeal.
Yes
19
I declare that the information I will enter on this application form and submit in the accompanying
documentation is correct to the best of my knowledge and belief.
Applicant name
Hampshire County Council
Date of submission
12 May.2016
Name of Responsible Officer
Heather Walmsley
Signature of Responsible Officer
Heather Walmsley
Checklist
Have I filled in all sections of form Yes
Is LGD funding request over £1 m Yes
Have I signed declaration box Yes
Where you have responded "No" to
any of the above answers, please note,
your application will not be eligible for
consideration
Is this application seeking funding to
support an innovation project?
No
Where the response to the above is
"Yes" please refer to the separate call
for innovation projects, which will be
issued by Solent LEP in April 2016
The deadline for submission of applications to Solent LEP is 17:00 on Thursday 12th
May 2016
All submissions should be sent using this template to: [email protected].
Submissions received after this time and date cannot be considered.
20
Appendix A
Map showing the extent of the Southampton Airport Economic Gateway development site
21
Appendix B
Table 1: Plot size, floor space and job creation figures as outlined in the Southampton Airport Gateway Enterprise
Zone bid 2015.
Land Parcel within SAEG Development capacity figures - 2015 Enterprise Zone Bid
Job creation figures - 2015 Enterprise Zone bid
Land owned by Southampton Airport (20.6ha)
75,190 sq m 3,462
Land owned by Network Rail (7.96ha)
29,415 sq m 1,524
Totals 104,605 sq m 4,986
Table 2: Plot size, floor space and job creation figures as outlined in Eastleigh Borough Council’s Strategic Land
Availability Assessment, 2015.
Land Parcel within SAEG Development capacity figures - 2015 Enterprise Zone Bid
Job creation figures - 2015 Enterprise Zone bid
Land owned by Southampton Airport (20.6ha)
30% development capacity – 61,800 sq m 35% development capacity – 72,100 sq m 40% development capacity – 82,400 sq m
No assessment on job figures included
Land owned by Network Rail (9.7ha)
30% development capacity – 29,100 sq m 35% development capacity – 34,000 sq m 40% development capacity – 38,800 sq m
No assessment on job figures included.
Totals 30% - 90,900 sq m 35% - 106,100 sq m 40% - 121,200 sq m
Appendix C
____________________________________________________________________________________
22
Indicative Development Costs – Land owned by Southampton Airport and Network Rail
Advice has been sought from AECOM on the costs associated with the development of both land parcels. The
calculations below are preliminary and exclude the following costs; VAT, professional and legal fees, funding, site
purchase costs, developers profit and any abnormal costs (land contamination, floor alleviation measures etc.).
Floorspace figures are based on estimates provided within the Southampton Airport Economic Gateway Enterprise Zone
bid and are phased over a ten year period, which should be considered when making assumptions on the level of private
sector investment for the development of both sites.
Table 1: Estimated construction costs; land owned by Southampton Airport. The use split is based on the figures
provided in the Enterprise Zone bid but a 20% buffer has been incorporated into this to account for the potential for some
of the land to be utilised by Southampton Airport for ancillary maintenance, repair and overhaul (MRO) operations.
Headline figures Use Floorspace/ sq m
cost/sq m Estimated construction cost
20.6ha (206,000 sq m) – total plot size 75,190 sq m – developable land
B1(a) office (54%)
40,600 £1,80017 £73,080,000
B1(c) light industry (26%)
19,600 £700 £13,720,000
B2 MRO (20%)
14,990 £700 £10,493,000
Total 75,190 £97,293,000
Table 2: Estimated infrastructure and construction costs; land owned by Southampton Airport
Headline figures Costs
75,190 sq m – developable land for new buildings
£97,293,000
Allowance for estate roads £1,000,00018
30,000 sq m – general business park infrastructure not associated with buildings, estate roads and landscape buffers
Calculated at £100/ sq m = £3,000,000
Total: 105,190 sq m + £101,293,000
16&17 this assumes that a good quality business park will be developed of four storeys to cat A standard. Light industrial development costs also assume a similar standard of construction but does not include internal fit out costs. 18
This is based on internal estate roads.
23
Table 3: Estimated construction costs for the land owned by Network Rail.
Headline figures Use Floorspace/ sq m
cost/sq m Estimated construction cost
7.96ha (79,600 sq m) – total plot size 29,415 sq m – developable land
B1(a) office (57%)
16,770 £1,80019 £30,186,000
B1(c) light industry (43%)
12,645 £700 £8,852,000
Total 29,415 £39,038,000
Table 4: Estimated infrastructure and construction costs; land owned by Network Rail
Headline figures Costs
29,415 sq m – developable land for new buildings
£39,038,000
Allowance for estate roads £500,000
10,000 sq m – general business park infrastructure not associated with buildings, estate roads and landscape buffers
Calculated at £100/ sq m = £1,000,000
Total: 39,415 sq m £40,538,000
Total estimated construction and infrastructure costs for both parcels of land:
£101,293,000 (Southampton Airport) + £40,583,000 (Network Rail) = £141,876,000
There are additional costs associated with the provision of utilities (electricity, gas and drainage) for both sites. Based
on schemes of a similar size and nature, costs could be in the order of between £5-20m.
24
Appendix D
Estimated job numbers and GVA for the redevelopment of the former Ford site.
The table below is based on an estimate of 60% B8 (warehousing and distribution), 20% (B2) general industrial and 20%
B1 (business) uses. Please note that as the planning application has not been submitted yet the exact breakdown of
uses on this site is unknown.
Table 1: jobs and GVA Jobs Output (GVA)
Gross 690 £39,900,000
Net 630 £34,500,000
NET ADDITIONAL 420 24,700,000
(of which INDIRECT) 90 £5,000,000
DIRECT 330 £18,200,000
Residential (Gross**) jobs 0 n/a
UseClass Gross m2
B1 9,040
B2 9,040
B8 27,118
A2 0
A1 0
C 0
D 0
25
Note: unrounded data
Table 2: Jobs Summary by occupation Gross NET
NET
ADDITIONAL
(of which
INDIRECT) DIRECT
Managers, Directors and Senior Officials 1 92 84 56 12 44
Professional Occupations 2 110 102 68 15 53
Associate Prof & Tech Occupations 3 95 88 59 13 46
Administrative and Secretarial
Occupations 4 74 67 45 10 35
Skilled Trades Occupations 5 93 87 59 13 46
Caring, Leisure and Other Service
Occupations 6 18 16 10 2 8
Sales and Customer Service Occupations 7 75 66 44 9 35
Process, Plant and Machine Operatives 8 53 50 34 8 27
Elementary occupations 9 76 67 45 10 36
Total 1-9 685 628 421 91 330
error
0 0 0 0 0