Westminster City Council King Street Low Carbon Trial - Client Report

FINANCIAL IMPACT

For this exercise we have used the original estimate for the scheme as the cost comparison as the scheme had already been designed prior to the switch to low carbon. This gives us the best indication of the additional costs for the introduction of low carbon measures.

As expected the measures had a significant bearing on the cost.

This is due to several factors:

• It was a stand-alone scheme, meaning that all the plant, labour and material costs were only charged against this job even when not in use. Therefore, there was an inefficiency where costs can normally be spread across several jobs. • Works are normally charged against the agreed schedule of rates per item. However, these rates are built up from the standard plant, labour and material costs. This meant that as different materials and plant were being utilised the standard rates could not be used. Instead, the costs were based upon defined cost, and upon the actual charges for the plant, labour and material. • Electric plant is still in its infancy, and due to research and development costs and lack of supply, they tend to cost three times the purchase cost of standard equipment. • As this was a pioneering scheme there is currently little available power in the network to allow equipment to be charged, which resulted in an expensive feeder pillar needing to be installed as part of the works. • Stand down costs were incurred when an emergency scaffold was erected adjacent to the works compound. Under normal circumstances the Welfare Unit could be easily moved to another location, however on King Street it needed to be connected to the feeder pillar. • Further stand down costs were raised when the JCB sustained some hydraulic problems, unrelated to the electric power. Again, due to the scarcity of supply the machine could not be swapped out for another one. • Other impacts on efficiencies such as getting used to the new equipment, priming of paving slabs and demonstrating the tools in action to visitors on site. COST OF SCHEME Before the scheme was identified as a ‘Low Carbon’ site it had previously been designed as a standard PPM scheme. The estimated cost for the extents under the schedule of rates came to £41,000. The final cost of the scheme has come in at circa £94,000. At first glance this would appear to make a full rollout of the carbon model prohibitive. At more than double the cost of a standard PPM scheme it would have a severe effect on the amount of schemes that could be undertaken in any given year. The further knock-on effect would see a deterioration in the network and an increase in the number of reactive jobs raised. This would result in a further detrimental increase in spend on the revenue budget for Westminster. However, upon further analysis it is not a like-for-like comparison. The estimate is purely based upon the existing schedule of rates. Presently, there are no schedule rates for low carbon operations, so the costs were calculated using defined cost. These are naturally higher as they are not based upon the economies of scale of the contract. In addition to this there were a number of costs experienced that would not normally be encountered when implementing PPM schemes. These extraordinary items have distorted the final amount and are outlined below.

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