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Outline Business Case Template 24th March 2016

1 Summary Information

Project name South East Hampshire Bus Rapid Transit

Fareham-Gosport ‘Eclipse’

Phase 1B - Off-Road Southern Extension

Delivery Location Gosport Borough

(Tichborne Way to Rowner Road)

Lead applicant organisation Hampshire County Council

Postal address Strategic Transport, Hampshire County Council, The Castle, Winchester,

S023 8UD

Email address heather.walmsley@hants.gov.uk

Phone number 01962 846089

Project lead name Heather Walmsley

Partner names First Hampshire and Dorset

Project

summary

The subject of this bid is a southern extension of the existing dedicated busway/cycleway which

forms the spine of the Fareham-Gosport BRT network. Phase 1A of the scheme, between

Redlands Lane in Fareham and Tichborne Way in Gosport, was completed in April 2012 and has

been hugely successful. Funding is now sought to complete Phase 1B – a 900m extension of the

dedicated busway along the disused railway line from Tichborne Way to Rowner Road.

The Eclipse dedicated busway forms part of a high specification, high profile, sub regionally

significant Bus Rapid Transit (BRT) network, designed to provide a viable public transport

alternative to the car. The network provides new and improved, critical public transport links to

existing urban employment areas in Gosport and Fareham as well as the proposed strategic

economic and housing sites which are prioritised within the Solent LEP’s Strategic Economic

Plan, including: the strategic development site at Welborne; the Solent Enterprise Zone; Gosport

Waterfront and town centre, Rowner Regeneration area and Royal Haslar.

This system will be pivotal in the delivery of the growth agenda for South Hampshire by helping to:

- stimulate a change in the economic prospects of the area

- open up new opportunities for travel by quality public transport

- facilitate development and regeneration in the sub-region

- provide a public transport system which enables key strategic housing sites to develop;

- improve access to public health services and facilities at both local and sub-regional

levels;

- improve access to tertiary education; and

- assist in meeting the requirements of the Air Quality Management Areas (AQMAs).

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Within the Solent LEP’s current Strategic Economic Plan, the need to improve access to the

Gosport and Fareham Peninsula is identified as a priority to help bring forward further investment

in the Solent Enterprise Zone. Due to the limited opportunity for enhancement of the highway

network in the area, development of an attractive high quality public transport option is an

essential to help overcome existing transport barriers to growth and to attract business

investment. A Strategic Infrastructure Plan has recently been created which identifies key

interventions to improve access to Gosport and Bus Rapid Transit forms a key component of this

strategy.

The Bus Rapid Transit scheme has strong support from the Solent Local Enterprise Partnership

and forms a key part of the new Solent Transport Investment Plan and the wider Solent Rapid

Transit proposals. First Group Hampshire and Dorset are fully supportive (see attached letter.)

With alternative funding sources not able to cover the scheme cost, securing Local Growth Deal

funding to facilitate the delivery of the Phase 1B busway extension is vital to continuing the

development of a wider BRT network, which will be a significant factor in generating future growth

and investment in the area.

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2 Strategic Case

What problem or

opportunity is the project

seeking to unlock?

South Hampshire has a vibrant economic future and Gosport’s coastal location

means that it is well placed to be at the heart of the marine, maritime and

aerospace advanced manufacturing sectors. However, congestion on the

Gosport peninsula has been a problem for many years due to the urban and

geographical constraints which make highway improvements in the area difficult

to achieve. The reduced presence of MoD employment (historically the key

employer on the peninsula), along with public sector job losses, has exacerbated

traffic problems in the area where large volumes of out-commuting in the morning

with the reverse in the evening, further compounds peak hour traffic issues.

Prospective employers are currently being discouraged by the highly congested

highway network and journey time unreliability, which present a barrier to

investment and growth.

The peninsula has significant potential for growth and unlocking suitable sites to

develop local employment and to meet growing housing demand are key

economic challenges. A critical factor in securing the growth potential of the area

is the investment in transport infrastructure, to ensure that accessibility to the

strategic economic sites is such that it makes investment in the area attractive to

businesses.

Access to the peninsula is constrained and presents a barrier to growth. In order to encourage growth and investment into the peninsula, particularly the Solent Enterprise Zone, infrastructure improvements are essential, involving both highways and public transport solutions. The first phase of the dedicated busway, between Redlands Lane in Fareham and Tichborne Way in Gosport opened in April 2012. The busway enables Eclipse buses to bypass the worst of the congestion on the A32 and offers fast, reliable journey times between Gosport and Fareham. The first phase of the scheme exceeded all expectations, with 1.3 million

passenger journeys within its first year of opening. There was a 64% increase in

passengers on the Eclipse services which use the busway compared with the

services it replaced and 12% growth on the corridor as a whole. Bus use rose

again by 11% and 7% in subsequent years. Surveys have identified that Phase

1A doubled the expected modal transfer predicated originally and doubled the

number of cars predicted to be removed from the local road network,

demonstrating impressive levels of benefit.

More people are using the Eclipse for their commute to work. More people are using Eclipse to get to Fareham rail station and connect with a rail journey. The Phase 1B busway extension seeks to build on the success of the busway scheme by increasing the length of off-road running that Eclipse services could make use of, thereby further avoiding congestion.

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The Phase 1B scheme would provide: - better route continuity

- further reduced journey times between the peninsula and the wider

region

- an extension of journey time reliability due to removing the uncertainties

of congestion

- a more logical route for the Eclipse service to re-join the on-road

network.

- Added value to Phase 1A.

How does the project fit with the Solent LEP's Strategic Priorities?

Unlocking sites for housing and employment

The busway southern extension scheme is essential to make planned new

development sites more accessible and attractive to business, given the limited

opportunity for highway enhancement in the area. The scheme is of notable

benefit to the following development sites:

- Solent Enterprise Zone at Daedalus, designated as a new advanced

manufacturing and engineering business cluster comprising of

130,000sq.m employment floor-space and 300 homes. There is scope to

develop services, taking advantage of BRT infrastructure to serve the

Enterprise Zone, bringing benefits to the site from improved accessibility

to the town centres of Fareham and Gosport, Fareham railway station

and the wider region.

- Gosport Waterfront and Town Centre regeneration area – 700-900 new

dwellings, 33,000sq.m of employment floor-space, 10,500sq.m of retail

space and a range of other community and leisure use. The Eclipse

service will provide a direct connection to this site.

- Haslar – the Eclipse route provides direct access to the following

development sites:

– Royal Haslar Hospital - to include 286 new dwellings,

medical/health care facilities and appropriate leisure and tourism

options.

– Fort Blockhouse: redevelopment potential for a significant

amount of marine related employment floor-space and potential

for residential uses in existing historic buildings. The Eclipse will

provide direct access to this site.

- Rowner regeneration area – 620 new homes. The Eclipse route provides

a direct connection to this site.

- North Fareham SDA (Welborne): 6,500 homes and 97,250sq.m

employment floor space. This development is reliant in policy terms on

providing an attractive, sustainable transport option that BRT can

provide. A direct BRT link (a future extension of this proposal) will be

provided to (and through) the site from the outset of the development, to

be funded by the developer.

Improving our A key function of the BRT network is to enhance strategic connectivity and

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connectivity within the Solent and beyond

strengthen the economic competitiveness of the Fareham/Gosport area. The

principle of the network is to improve accessibility between the key strategic sites

on the peninsula on a local scale and also to connect the peninsula to the wider

area on the regional scale.

The wider BRT network is closely aligned to and will enhance access to a number

of the key development sites and growth hubs within the sub-region and forms an

essential part of the Solent Rapid Transit proposals. See below.

The Solent Transit network would bring together an integrated network of public

transport modes to allow improved connectivity and accessibility across the

Solent to link communities and support growth. The component parts would

complement existing rail and ferry services. The proposed Solent transit network

will provide a local frequent, multi-stop service in and around Southampton and

Portsmouth, and allow an efficient connection between the city-centre, the ports,

the ferry terminals and cruise terminals, the airport as well as well as other hubs

of the Solent area. The network will permit local residents, workers and

passengers to easily travel within the Solent area and make connections to

further destinations. The incremental expansion of the network including Phase

1B will help to address the distribution and movement patterns associated with

current population and employment centres. The scheme is not only key to the

local area but will be part of the wider transformational investment to support long

term growth in the Solent. The Transit proposals also provide the opportunity to

create a multimodal interchange between Ferries and Transit services between

Gosport waterfront and Portsmouth Hard.

Further investment into this developing BRT / Solent Transit network will serve to

strengthen connectivity. Specifically in the case of the Phase 1B off-road busway

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the scheme offers an alternative transport solution for accessing strategic

transport hubs including Fareham Railway Station and Gosport Ferry, by avoiding

large sections of congested highway network.

Transport connectivity is a critical aspect of the development of employment sites

such as the Solent Enterprise Zone, to ensure that these sites generate business

investment interest. For these development sites to meet their full potential and

thus strengthen the economic vitality of the wider Solent region, early investment

in effective transport solutions is essential.

Stimulating and supporting innovation

The scheme is part of an innovative state of the art transformational project,

which raises the level of the public transport offer significantly. In order to

encourage residents out of their cars a better quality alternative transport solution

is essential and the success and increasing patronage which has been achieved

to date on the Gosport Fareham BRT demonstrates the benefits of this innovative

solution. The scheme will support the reliability and resilience of strategic

connectivity of the Fareham/Gosport peninsula within the wider area of South

Hampshire and beyond. This will support the areas overall economic

competitiveness/attractiveness and contributes towards encouraging investment

from target sectors, particularly marine and advanced manufacturing industries

where innovation is at the forefront of business development.

Improving the skills and talent of our current and future workforce

The Eclipse and direct college services using the existing busway are heavily

used by students attending both Fareham college, St Vincent’s College and in

particular the new CEMAST site at the Enterprise Zone.. Improving transport

connectivity to education centres will maximise student attendance, bringing

benefit to the development of the skills of the future workforce.

The scheme will contribute to the widening of the labour pool for businesses

within the Fareham and Gosport area. In addition, improved accessibility

between new and existing housing development areas and the employment

centres and Enterprise Zone will ensure that the local people can be connected to

local jobs, helping to redress the balance of skills and jobs in the local area.

Supporting business growth through access to resources and advice

High value businesses derive benefits from being located in close proximity to each other, their suppliers and their workers. This scheme will bring enhanced connectivity which will provide agglomeration benefits, in terms of better connecting businesses from a physical perspective on a local, regional, national and international level. This is an important factor in promoting collaboration and business enterprise, with greater knowledge exchange and co-working.

Supporting our key strategic sectors

The proposed developments which will be facilitated by the scheme will help

underpin growth in the area, creating business gateways (including marine and

advanced manufacturing etc.) at both local and national levels (supported by

enhanced connectivity) and will help develop new local supply chains.

As a result of improved transport connectivity supporting economic

competitiveness, the scheme would indirectly support emerging new businesses

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in key and niche employment sectors, facilitating job creation within the area

across the whole of the supply chain. In particular investment in key strategic

sectors at the Solent EZ will be supported by improved accessibility.

How will the project raise

productivity in the Solent?

Transport networks are critical in connecting people to jobs and products to

markets; therefore investment in transport infrastructure is critical for maintaining

and improving productivity.

Businesses (existing / prospective) on the peninsula will benefit from reduced, and more reliable, journey times as a result of this scheme. This will reduce the cost of congestion to existing and prospective businesses, such as costs of access to customers and costs of access to supplies, and contribute to increased levels of efficiency and improved productivity. Productivity in the local economy would be improved by bringing businesses

closer together (in terms of enhanced transport connectivity within the supply

chain) and closer to larger labour markets - so called agglomeration benefits.

The scheme will have an important role in strengthening connectivity of the

peninsula to the surrounding area and supporting the intensification of the

existing sectoral specialisms and clustering, focusing on Advanced Manufacturing

specialising in the marine, aerospace and aviation sectors.

How will the proposal

demonstrate additionality?

The proposal demonstrates significant additionally in terms of the added value it brings to the hugely successful Phase 1A of the Fareham-Gosport busway and also the wider BRT network. This emerging network brings economic benefits in the form of strategic housing and employment as well as providing a boost to encourage investment in existing central business and commercial areas. The incremental benefit of the scheme is predominantly due to two main factors:

- Acceleration effects on major development projects due to improved infrastructure and connectivity, (principally North Fareham SDA, Gosport Town Centre, Gosport Waterfront and the Solent Enterprise Zone)

- Enhanced agglomeration benefits, principally arising from strengthening the connectivity of the peninsula to the surrounding area and supporting the intensification of the existing sectoral specialisms and clustering, focusing on Advanced Manufacturing specialising in the marine, aerospace and aviation sectors.

Describe the wider

economic impacts of the

proposal

As a key phase of the overarching package of transport improvements for Fareham and Gosport, and the wider Solent Transit proposals, the scheme will trigger significant wider economic benefits for the surrounding area. The economic benefits of the overarching package will be widespread, helping to accommodate transport movements from key strategic sites at the Solent Enterprise Zone and Welborne as well as the benefits for Gosport peninsula and centres of employment at key business parks. Overall, this is expected to make the Gosport / Fareham and wider Solent area more attractive as a business location, thereby encouraging new businesses to invest / locate there, or existing

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businesses to expand. - The enhanced connectivity provided by the scheme means that

businesses would have access to a larger pool of labour. - Enhanced agglomeration benefits and improved access to supply chains

for businesses, particularly key sectors such as advanced manufacturing which require access to materials as well as labour.

- Workers would also have access to a wider range of jobs - Improved access provided by the scheme will increase the ability of

people to access jobs within the Fareham/ Gosport areas. Although there is a focus on attracting inward investment that creates jobs which are filled by local people (and hence contributes to reducing out-commuting), there is still likely to be a need for some specialist roles to be filled from further afield and the ability of the area to have access to a larger labour pool will be a more attractive proposition for businesses considering whether to invest in the area.

The extension of the dedicated busway should be viewed as a critical part of the wider context with benefits ramping up as the Solent Rapid Transit network develops.

Describe the social

impacts of the proposal

The scheme will help to generate the investment to create the much needed jobs

for the growing population in this area of economic underperformance where

employment has declined by a significant 21% over the last 10 years. When

compared to other parts of the Solent LEP area, this decline in jobs is significant

and much in contrast with figures for Hampshire as a whole where employment

has increased by 3% on average over the same period.

The borough of Gosport has some of the most deprived Lower Super Output Areas (LSOAs) in the country as calculated by the Index of Multiple Deprivation (which takes into account levels of employment, health, education, skills, access to housing and services, crime and living environment). Gosport’s economy is well below the median value, has gross weekly earnings below the national median value and is in the bottom 20% of authorities nationally in terms of its employment rate. Physical infrastructure projects often deliver greater benefits to those located in closest proximity; however this area currently experiences high levels of out commuting which exacerbates congestion on the main routes out of the area. This has depressed land and property values and constrained inward investment, contributing to slowing the delivery of regeneration schemes. The extension of Eclipse services (as part of a wider package of transport

improvements), will help address this issue by improving access to the most

deprived parts of the peninsula, increasing the accessibility of services, facilities

and education or employment sites. Economic growth and access to jobs

supported by the scheme will help to address serious levels of social and

economic deprivation and a deteriorating competitive position in Gosport. A

resultant decrease in out-commuting will encourage inward investment for new

homes and jobs, increasing employment and wages in the area which has

significant and wide ranging socio-economic benefits.

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Outputs (For each, explain where the output will be delivered (in Solent or outside), and the basis of

your calculation).

Number of new

permanent jobs created

directly

In terms of direct employment outputs, these are taken primarily to be those created during the construction process of the scheme. It is acknowledged that these would therefore be temporary in nature and at this stage it is not possible to predict whether, if this level of employment is achieved, the jobs will be entirely ‘new’ to the local economy. In relation to construction related jobs an estimate has been made based on 12.5 FTE/£million of the total scheme spend. This equates to 80 temporary construction jobs. A conservative view that only 20% will be net additional jobs would result in 16 new jobs. It should be noted that this is a notional estimate and it is anticipated that any net additionally could be as high as 40% as suggested by HM Treasury Guidance. In addition to construction jobs, subject to successful funding of the Phase 1B scheme the operator of the Eclipse service, First Group, is to enhance service provision as part of the Phase 1B scheme package. When the route was first opened, service frequency was 7/8 minutes in each direction; now due to the commercial success of the service the frequency is to increase to every 5 minutes and operating hours will be extended to 4.30am to 2am. This will create additional jobs from an operational perspective, with the purchase of 3 new buses required, resulting in employment opportunities for at least 8 additional FTE drivers. The service operator may also require a further increase in staffing numbers to manage an enhanced service provision and maintain an increased fleet size with fitters and other requirements adding a further 4 FTEs.

Number of new

permanent jobs created

indirectly

Improved access to Fareham and Gosport will help to maximise (and accelerate) development at the Solent EZ in particular, where c.3,700 jobs are planned by 2026. This includes SEZ East (c.1,000 jobs), SEZ Waterfront and Daedalus Park (c.1,600 jobs), and SEZ West and airfield (c.1,000 jobs). This scheme also supports the development at Welborne, which is expected to

generate the creation of an additional 5735 new jobs.

Number of safeguarded

jobs

This scheme is a critical stage in part of a wider BRT network for the area, which will indirectly help safeguard a proportion of 12,700 full time and 7,900 part time jobs that exist within Gosport Borough [Source: ONS business register and employment survey]. Maintaining strong transport links is essential to retain and attract existing / 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 based within the peninsula relocating to other areas with lower costs of congestion and more reliable journey times.

New houses enabled The scheme will indirectly support the delivery of planned housing. Phase 1B is a critical component in facilitating the wider incremental package of transport infrastructure improvements on the peninsula – which will support delivery of approximately 8600 new homes on strategic developments at Welborne (6500), the Solent Enterprise Zone (c.350), Haslar (c.300), Gosport Waterfront (700-900) and Rowner (c.620) development areas.

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New employment /

education space enabled

(type and m2)

BRT Phase 1B, as part of the wider package of infrastructure improvements

indirectly supports the delivery of approximately 250,000sq.m of new employment

space on strategic developments, in particular:

- Solent Enterprise Zone: 128,000m2 of planned employment floor-space - Welborne: 97,250sq.m employment floor space.

- Gosport Waterfront and Town Centre regeneration area: 33,000sq.m of

employment floor-space.

The BRT services supported the development of the CEMAST site in Gosport and

will also connect to new schools at Welborne.

Skills Estates improved

(type and m2)

No significant impact is expected.

Skills outputs (apprentices

/ learners)

The construction of the scheme is expected to create opportunities for

apprentices to learn new skills within the local area.

Indirectly, the role of the scheme in supporting inward investment and job creation

would help to create local apprenticeship opportunities associated with new

businesses.

In addition, the operator surveys indicate Eclipse services are popular with

students attending Fareham College main campus. Enhancing public transport

along the BRT route will also be of benefit to services connecting with the

CEMAST campus. Accessibility improvements will encourage more young people

to take up courses at education centres and maximise their daily attendance,

allowing the development of essential skills for the future.

Total wider leveraged

investment resulting from

project

As described elsewhere, the scheme will enhance strategic transport connectivity

of the Gosport Peninsula and reduce transport related business costs. This will

contribute towards improving the area’s economic competitiveness and

encourage inward investment.

The business case for the Fareham and Gosport Intermediate Infrastructure

Programme identifies that the full infrastructure package for Fareham and

Gosport, including the Phase 1B busway extension scheme, would in total

generate an additional £180 million private sector investment.

Describe any other

outputs to be delivered as

a result of this project.

The scheme would improve accessibility to a number of new strategic

development sites in the area, provide better public transport connections to

Gosport Town centre, waterfront and ferry terminal and links to Portsmouth Hard.

The scheme will bring improved connectivity to existing routes to the wider region.

In addition, a successful strategic public transport network such as BRT provides

a viable alternative to the car for a large number of people accessing strategic

sites, particularly commuters.

The scheme would also improve the accessibility to a reliable and effective,

alternative, transport option for those on low income who may not see private

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ownership of a car as an affordable option. Improvements in transport for those

on low incomes allows better integration across society and increases

opportunities to seek employment over the wider area, therefore supporting the

regeneration projects across the peninsula.

A further extension of the successful first stage of the busway will bring wider

indirect benefits to the Peninsula as a whole by improving accessibility to the

Peninsula throughout and encouraging modal shift to remove cars from the

network and thereby reduce journey time and improve journey-time reliability,

particularly in peak times. This helps remove the transport barrier to economic

growth and improves quality of place throughout the peninsula, particularly in

terms of air quality improvement and a reduction in noise and visual pollution.

Additional wider benefits include improved journey time and reliability and

encouraging modal shift, thereby helping to reduce existing peak time congestion

issues on the peninsula.

3 Economic Case

Explain how the proposal

will provide value for

money, and what is the

basis for your

assessment?

The case for implementing Phase 1B of the dedicated busway is substantiated by the success of Phase 1A which has exceeded all expectations. The busway project has demonstrated strong value for money in terms of the economic return on investment. The original webtag defined BCR of the project was calculated as 1.5 prior to construction and following completion of the scheme, analysis by KPMG and Greener Journeys indicates a BCR of 1.9. Remove the loss of parking revenues in Gosport centre from the equation and the analysis indicates that for every £1 of investment, Eclipse has delivered up to £6.94 of benefit to users, non-users and the wider economy – a BCR of 6.94. It can be assumed that loss of revenue from parking is short-term cost as if not used for parking, the land would be opened up for other revenue generating activities. Therefore the true BCR of Phase 1A lies between 1.9 and 6.94. Phase 1B as a standalone scheme has been calculated with a BCR of 1.72. It is important to recognise that the proposed scheme is not only an extension of Phase 1A but it is also the first step to achieving a much wider Solent Transit network proposition across the area. The scheme benefits should be considered in relation to both the benefits already accrued and the benefits of the wider network which, once complete, will provide greatest overall impact. The wider network scheme was assessed based on a cost of £49.7m (2011 prices) inclusive of optimism bias. The initial conservative results provide PVB of £183.9m, PVC of £95.9m and an NPV of 87.9m, with an overall BCR of 1.9. The Fareham-Gosport scheme will contribute to greater benefits for the area as the network is developed and integrated with strategic development areas and key development sites. While BCR values of 1.72 and 1.9 are below 2.0, this level of benefit is

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considered very high for a public transport scheme which typically have lower BCRs than highway interventions. There are significant non-monetised benefits to consider:

- The scheme helps fulfil the Solent LEPs growth agenda by removing transport barriers to growth

- The scheme provides or enhances direct links to almost 200,000m2 of employment sites

- The scheme provides direct links to key areas of housing development - The scheme supports the development of the Solent EZ by improving

accessibility to the peninsula which will encourage investment - The scheme will improve access to Gosport town centre bringing

economic and employment benefits, particularly to areas which are already the focus of regeneration proposals.

Value Engineering is an essential part of all Hampshire County Council projects,

which is implemented throughout the design process as standard practice. As

construction drawings and contract documents are prepared we will continue to

value engineer in order to ensure best value throughout the project delivery. The

construction of Phase 1A has provided the opportunity to learn lessons which will

assist with cost saving on Phase 1B wherever possible. The delivery of Phase

1A to budget shows proven success in this area.

A Value Engineering exercise was undertaken in 2016 for Phase 1B which

concluded that civils cost savings could be achieved, predominantly relating to

the reuse of bus shelters, RTI units and CCTV cameras, a reduction in unit

specifications and quantity checks on a number of key items. This has resulted in

a lower overall scheme cost and therefore a reduction in funding required to

complete the project when compared to the previous bid for this scheme in 2013.

Total scheme costs in 2013 were identified in the order of £7.9m plus £1m of

operator contributions. Further to the value engineering exercise costs at 2015

were identified as being in the order of £6.4m plus approximately £3.4m operator

contributions. A cost saving of £1.5m.

Provide a list of the

options that have been

appraised? (where

applicable)

A wide range of public transport based options which could improve travel choices

within the South East Hampshire sub-region were considered at the time Phase 1

A and B were being developed.

- Improved conventional bus services – developing Quality Bus

Partnerships and improvements in standard of services.

- On-street bus priority – bus lanes on service routes and priority measures

at junctions

- Off-street bus corridors – utilising off-street corridors to provide

segregated routes for buses.

- Guided buses – involves buses being steered by external means over

some or all of their route, usually on a dedicated track but with some on-

street running likely.

- Trolley buses – utilising electric buses usually powered by overhead wires

on street. This technology is not currently used for scheduled services in

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the UK.

- Trams or Light Rapid Transit – a form of urban rail transportation utilising

electric rail cars operating mostly or partly on routes separated from other

traffic but sometimes mixed with other traffic on street

- Heavy rail – connected to the national rail network

A number of these were discounted in terms of deliverability (cost and risk),

including Guided buses, trolley buses, trams (on street), LRT (off street) and

heavy rail. (However, further work is currently ongoing by Solent LEP to identify

scope for a Solent-wide Rapid Transit network and to re-evaluate the benefits).

The remaining options were assessed against the scheme objectives and it was

concluded that on-street and off-street bus priority performed best against the

scheme objectives than a QBP alone. The off-street priority option provides

significant potential for improved access, an improved public transport image and

reductions in flow on existing routes. On-street priority provides similar benefits

but at a lower level due to the limitations of the existing network. An expansive

off-street corridor is in practice, not feasible, hence why an off street corridor

complemented with on-street bus priority measures is considered the most

suitable option to develop the area-wide BRT network.

For transport schemes

only: Provide details and

outputs of a WebTAG

Assessment undertaken.

The Sub Regional Transport Model (SRTM) has been used to consider the impacts of the scheme and an economic appraisal has been undertaken using the DfT software TUBA. TUBA performs cost benefit calculations consistent with the Treasury Green Book appraisal guidelines. It combines the benefit demand and cost of travel inputs from the SRTM with scheme costs to calculate a stream of benefits and costs over a standard 60-year appraisal period. These costs and benefit streams are discounted at the rate of 3.5% per annum to generate a discounted Present Value of Benefits (PVB) and a Present Value of Costs (PVC). The ratio of these gives the Benefit-Cost Ratio and the difference gives Net Present Value (NPV). The outputs from the webtag assessment undertaken based upon the 2013 scheme costs have been outlined earlier in Section 3. (see above) Phase 1B as a stand alone scheme was calculated at that time with a BCR of 1.72. While the BCR value was below 2.0, this level of benefit is considered very high for a public transport scheme, which typically would have a lower BCR than a highway intervention. Fundamentally it is important to note that as scheme costs are now much lower having been reduced by approximately £1.5m that the BCR value will have increased to reflect this. At this time no re-assessment of benefits to reflect the lower cost has been undertaken. It is important to recognise that the proposed scheme is not only an extension of Phase 1A but it is also the first step to achieving a much wider Solent Transit network proposition across the area. The scheme benefits should be considered in relation to both the benefits already accrued and the benefits of the wider network which, once complete, will provide greatest overall impact. The wider network scheme was assessed based on a cost of £49.7m (2011

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prices) inclusive of optimism bias. The initial conservative results provide PVB of £183.9m, PVC of £95.9m and an NPV of 87.9m, with an overall BCR of 1.9. The Fareham-Gosport scheme will contribute to greater benefits for the area as the network is developed and integrated with strategic development areas and key development sites. There are also significant non-monetised / economic benefits to consider:

4 Financial Case

2016/17 2017/18 2018/19 2019/20 2020/21 Total

Local Private Sector

Contributions

*3.4m

Local Public Sector

Contributions

Local (other)

Contributions

LGF Funding Request *6.4m

Total Project Costs *9.8m

*Note: It will not be possible to profile the scheme costs without confirmation of funding due to seasonal

constraints associated with ecological requirements. However, it is estimated that local contributions from the

operator could be secured in 2016/17 and 2017/18. Construction of main works could commence within 12-18

months of funding confirmation and an 18 month works contract is anticipated, hence the main draw upon the

LGF would be during 2017/18/19.

Are local funding

contributions confirmed,

and if not, when will they

be confirmed?

Subject to the BRT Phase 1B scheme being successfully funded, First Group

have confirmed a substantial local private sector contribution to the project

totalling approximately £3.4m. This figure covers the investment in 16 new buses

to bring the fleet up to the most modern standards as well as the introduction of

another 5 buses on the network in order to increase bus frequency from 6 minutes

each way to a target frequency of 5 minutes (resulting also in an increase in

workforce for operational purposes). This demonstrates First Group’s

commitment to the BRT project.

Hampshire County Council have already evidenced local commitment to the

scheme through a contribution of approximately £5 million invested in Phase 1A.

This underlines the belief that investment in access to the Gosport Peninsula will

help remove the transport barriers to growth and will encourage investment at key

sites including the Solent Enterprise Zone, as well as helping to reduce journey

times in congested urban areas. Further opportunities will continue to be sought

for additional local contributions.

What are the key financial

risks?

The key financial risks are predominantly those associated with potential cost escalation associated with construction price inflation during the implementation of the scheme. A full risk assessment has been undertaken for the scheme with

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quantified risk cost estimates, which have been built in to the total scheme cost estimate. The key project risks which could present increased costs are discussed in Section 5.

A clear and effective risk management process will be put in place, which

includes regular monitoring of the Risk Register and implementation of

appropriate mitigation measures.

Has any sensitivity

analysis been undertaken

on costs?

A value engineering cost review exercise has recently been undertaken and a quantified risk analysis has been undertaken.

Is the proposal compatible

with EU State aid

regulations?

Yes

Any other information or

further comments on the

proposal not captured in

other sections of this form

The current Eclipse services are operated under a legally binding 5 year

partnership agreement between Hampshire County Council and First Group,

which will cover services on the off-road southern busway extension. This

agreement allows for super annulated profit sharing to be fed back into the BRT

services on an annual basis and will tie each partner into continuing to work

together to provide the best infrastructure and service possible. The nature of

this partnership is commercially sensitive but a copy can be made available in a

confidential respect if required.

HCC will be the delivery agency for the dedicated busway infrastructure and the

Operator will be responsible for the provision of buses and services.

There are significant potential adverse impacts for local employment of not securing the funding needed to deliver this scheme. Without investment to reduce congestion and delay on the strategic access routes to Gosport and the Enterprise Zone, existing businesses based on the peninsula will continue to face increasing costs from congestion, and may choose to relocate out of Gosport to eliminate these accessibility issues. This will lead to further out-commuting from the peninsula, placing the three main access routes into and out of Gosport under even more traffic pressures.

5 Commercial Case

Provide details of your

contracting and

The works would be procured via the Generation 3 Civil Engineering, Highways and Transportation Infrastructure Works Framework 2016-2020 (GEN3). The

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procurement strategy?

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. The appropriate level for this project would be the GEN3 (2) framework contract for specialist civil engineering structural works, complex highway infrastructure works, public authority civil engineering works and associated medium value construction work between the individual project values of approximately £50k to £10m. The GEN (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 Delays to project due to

ecological constraints eg badger

sett relocation

Commission ecological surveys as soon as funding

confirmed Undertake ecological surveys in advance

of the works and remain aware of the sometimes

significant lead in times for this work due to

hibernation/breeding periods etc. Prepare mitigation

plan in advance.

HW Date of funding

confirmation

The presence of unexpected

services delaying contract

Early liaison with statutory undertakers and allow

enough float in works programme to resolve

unknowns

Escalation of local opposition

Keep local residents informed throughout process

Risk of public safety during

construction

Maintain site security as required by contract

documents

High water table affecting

installation of drainage and

structures

Undertake appropriate investigations on site

The impact of temporary works on

the existing highway network

leading to long traffic delays

Prepare traffic management plan and consult with

other work in the area

Difficulty of accurately pricing

contract/market forces affecting

prices resulting in costs

exceeding budget

Review costs and risks at key stages

First Group failing to invest due to

delays iin funding confirmation

Renew legally binding Operating Agreement

Delay to programme causes

works to extend beyond funding

window, with HCC needing to find

additional funding

Review costs, programmes and risks at key stages.

To be managed by Project steering group

Expected delivery start

date (quarter / year)

Advanced works including any ecological mitigation could be scheduled to commence in 2017/18, subject to early confirmation of funding.

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Current status of the

scheme (feasibility /

outline design / detailed

design)

The current stage of the scheme is a culmination of a substantial amount of

technical feasibility and design work over recent years. Planning permission is in

place and preliminary design and detailed design work has been completed.

Contract document preparation could begin as soon as funding is secured.

What consents are

required, and are these in

place? If not, when will

they be in place?

Planning permission was granted in July 2009 for the construction of a busway

between Redlands Lane in Fareham and Military Road in Gosport. This

permission has been implemented between Redlands Lane and Tichborne Way

as Phase 1a of the busway. The outstanding part of the permission remains valid

as overall development has commenced, therefore planning permission exists for

the southern extension route. Planning permission was granted in October 2013

for a revised busway junction with Rowner Road – this completes the necessary

permissions required for the Phase 1B route. (The planning permission is

secured with various conditions).

Hampshire County Council is the land owner of the disused railway corridor and

hence, all land is already assembled.

Traffic Regulation Orders will be required in relation to the off and on-road

sections of the scheme and proposed changes to parking restrictions. The

scheme programme will be designed to ensure that these will be in place at the

appropriate construction stages.

The scheme is intended to make use of variable message signage and

authorisation has already been obtained from DfT for the use of non-prescribed

VMS signs on this phase of the project.

Are there any constraints

and dependencies, if so,

what are these?

Key dependencies that are critical to the successful delivery of the planned programme include:

- Funding allocation / approval; - Timely procurement of contractor; - Project appraisal (G3) approval by the HCC Executive Member for

Environment & Transport

From an engineering perspective, the scheme is not considered to be particularly

complex or unusual.

6 Management Case

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Who is the project

manager/client?

Hampshire County Council is acting in the role of Client and Project Manager

Set out the key decision

points

Project Appraisal

Tender and 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)

Detailed design complete complete HW complete

Tender preparation complete 2017/18 HW Ready to commence

subject to funding

Tender process concluded 2017/18 HW

Advanced works commence 2017/18 tbc

Advanced works complete tbc tbc Subject to funding

confirmation and

timescales associated

with ecological mitigation

if required.

Main construction works commence tbc tbc Subject to funding

confirmation and

timescales associated

with ecological mitigation

if required.

Construction complete tbc tbc Subject to above

Set out the governance

framework that will be in

place

The governance and project board arrangements for the South East Hampshire

BRT network were revised following the opening of Phase 1A of the wider

network. The project board structures relate to firstly the overarching project,

secondly the operational aspects of Phase 1A and thirdly the development of

future parts of the network. The completion of the Fareham to Gosport routes

fall under the first and third parts of this structure but are also intrinsically linked

to the second part in relation to essential feedback on operational issues.

The BRT Phase 1B project will be managed by Hampshire County Council,

however the project board structures highlight the close working partnerships

between Hampshire County Council, Portsmouth City Council, Solent Transport

and the South Hampshire Bus Operators Association (SHBOA), all of whom

were on the main board. SHBOA has been formed to act as a single industry

voice for bus operators in the sub-region, who wish to fully engage with

delivering the goals of Solent Transport, including the BRT network.

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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,

including the Eclipse service operator, First.

The governance structure as described is shown below.

7 Declaration and Checklist

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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

Have you previously applied for any Solent LEP

funding?

Yes

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

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

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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

N/A

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

N/A

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: pipeline@solentlep.org.uk.

Submissions received after this time and date cannot be considered.

Appendix

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