As tweeted earlier, at tonight’s Isle of Wight council Cabinet meeting, all members voted in favour of the proposed 25 year highways PFI contract with Vinci Concessions and Meridiam.
Cllr Eddie Giles made a presentation at the beginning of the meeting saying this was “an important day in history for this council.”
£1m per annum savings
He ran through the paper (embedded below for your convenience) claiming that the council would be saving £1m per year on highways (related) expenditure for the 25 year duration.
The stated that the council’s current spend on highways (and other items included in the PFI contract such as street lighting, grass verges, cctv, etc) is £8.3m pa but that once the contract kicks in, that it would be £7.3m per annum.
Based on 2.5% inflation rate
Cllr Giles went on to say that the council had budgeted for an inflation rate of 2.5% over the 25 years, meaning that unless the rate rose above that percentage, rising costs over the years could be covered through contingency budgeting.
He added that if any additional costs arose, the contractor was liable to pick up the first £500,000.
Call-in ‘disapplied’
He went on to explain that Cllr Churchman, as chair of the Scrutiny Committee, had expressed that she was comfortable for call-in to be ‘disapplied’.
All cabinet members voted in favour of :
- Authorise the entry into the 25 year Contract for the delivery of the Isle of Wight Council Highways PFI Project;
- Authorise the execution of Project Documents to which the Isle of Wight Council is a party;
- Approve the Isle of Wight Council’s funding commitment to the 25 year Highways PFI Contract;
- Delegate the authority to the Highways PFI Programme Director to finalise the Contract Documentation, where applicable in consultation with the Project Sponsor and the Cabinet Member for Highways, Transport & Waste;
- Delegate the authority to the Highways PFI Programme Director to execute the “swap rate” call at Financial Close on behalf of the Council; and
- Disapply call-in due to the urgency of entering into the Contract by the end of September as set out in paragraph 56 of this report.
To be endorsed by full council
Members of the full council have been called to an extraordinary meeting tomorrow evening (Wednesday) to endorse the decision.
Image: Simon Haytack under CC BY 2.0
