STREET LIGHTING & TRAFFIC SIGNALS PRIVATE FINANCE

INITIATIVE

INFRASTRUCTURE

• 16,500 Street lighting columns

• 2,050 Traffic signal points

• 1,500 Illuminated signs

• 800 Illuminated bollards

THE PROBLEM

• Asset condition

• Maintenance backlog

• Perceptions of crime

• Need for investment

• Shortage of funding

THE NEED

OPTIONS CONSIDERED

TYPES OF PROCUREMENT:

• In-House provision

• Traditional Term Maintenance

• Joint Venture

• Private Finance Initiative

PRIVATE FINANCE INITIATIVE

WHAT IS IT?

PFI

• Central Government Support (credits)

• Public Private Partnership where capital intensive investment required

• Transforms the Council from owner & operator to purchaser of a service

• Use of private sector expertise & efficiencies

PFI

HOW DOES IT WORK?

PFI

• 25-year contract

• 5-year Core Investment Period

• Ongoing maintenance

• Performance driven - Outputs

• Transfer of risk to most appropriate party

PFI

WHAT WILL BE DIFFERENT?

PFI

• Large-scale upgrade of street lighting and

traffic signals

• Column positioning

• Improved lighting levels

• De-cluttering

• Robust monitoring and maintenance regime

• Improved streetscape

EXPECTATIONS Typical Residential Street – Prior to PFI

Typical Residential Street – Post PFI

EXPECTATIONSDevonshire Road

Devonshire Road – Recent Scheme

PROCESS TO DATE

Total of £600 million credit – 15 Authorities bid

DfT announcement November 2005

Expression of Interest submitted February 2006

Business Case submitted January 2007

Pre Qualification of Bidders April 2007

Formal approval received September 2007

Procurement commences October 2007

PFI PROCUREMENT PROCESS

• New Rules - Competitive Dialogue

• Approx. 18-month process

October 2007 Outline Solutions

April 2008 Detailed Solutions

October 2008 Final Tenders

December 2008 Contract Award

April 2009 Contract commences

FINANCIAL INFORMATION

• PFI Credit Award - £31.9 million

• Total contract value - £141million

• Annual cost - £2 million

• Affordability gap - £450,000 pa

• Income Generation - £200,000 pa

THANK YOU!

ANY QUESTIONS?