Agenda item

Hedd Vaughan-Evans, Head of Operations and Henry Aron, Energy Programme Manager to present the report.

 

1.       To agree to the change request submitted by Bangor University to retain phase 1 of the Egni project within the North Wales Growth Deal and withdraw phase 2 of the project.

2.       To allocate the funding released from Egni Phase 2 to the project replacement process and to extend the scope as set out in this report.

3.       To agree the scope and minimum requirements for replacement Low Carbon Energy projects as set out in the report.

4.       To agree to the revised timetable set out in this report for the project replacement process including a formal launch in February 2023.

5.       To delegate authority to the Portfolio Director, in consultation with the Chair and Vice-chair, to implement the Project Replacement Process as set out in this report and to undertake all necessary steps required to finalise the documentation required to commence the process.

 

 

The report was submitted by Hedd Vaughan-Evans (Head of Operations) and Henry Aron (Energy Programme Manager).

 

RESOLVED

 

1.    To agree to the change request submitted by Bangor University to retain phase 1 of the Egni project within the North Wales Growth Deal and withdraw phase 2 of the project.

2.    To allocate the funding released from Egni Phase 2 to the project replacement process and to extend the scope as set out in this report.

3.    To agree to the scope and minimum requirements for replacement Low Carbon Energy projects as set out in the report.

4.    To agree to the revised timetable set out in this report for the project replacement process including a formal launch in February 2023.

5.    To delegate authority to the Portfolio Director, in consultation with the Chair and Vice-chair, to implement the Project Replacement Process as set out in this report and to undertake all necessary steps required to finalise the documentation required to commence the process.

 

REASONS FOR THE DECISION

 

The North Wales Growth Deal has a change management process in place to ensure potential changes to the scope of the Growth Deal and the projects are captured, assessed and where relevant considered by the Board.

 

The Final Deal agreement sets out the board position in relation to potential replacement projects:
 "Any new or replacement projects to be brought forward for consideration must demonstrate delivery against the relevant programme business case and the objectives of the portfolio business case.  Where those projects are within the existing agreed financial envelope for the partnership, those projects would be a matter for the Economic Ambition Board to decide."

 

In December 2022, the Board agreed the criteria for the original project replacement process to be launched on the 16th January.  The Portfolio Director, in consultation with the Chair of the Economic Ambition Board took the decision to delay the process having been informed of the change request to be submitted by Bangor University regarding the Egni project which would have implications for this process.

 

The Egni project with Bangor University has been reporting red for over 12 months and has been under review by the Portfolio Management Office. A two-phase approach to the project was being explored with the University to accelerate delivery.
 

 

The original scope of the Egni project was to invest in the development of infrastructure at Bangor University and Menai Science Park, enhancing the North Wales and UK capabilities for innovation in low carbon energy and related areas, helping to create the conditions for new inward investment and business growth in the low carbon energy supply chain in North Wales.

 

As a result of delays to the development of the business case, escalating costs and a lack of certainly regarding the wider Bangor University estates strategy, the Portfolio Management Office have been working with the University to develop a phased approach to the project.  Phase 1 would focus on the smaller development at the Menai Science Park, with Phase 2 comprising of the wider Bangor University campus facilities

 

Bangor University have submitted a change request to the Economic Ambition Board to retain phase 1 (new development at Menai Science Park) within the Growth Deal and to withdraw Phase 2 (wider University campus development). 

 

DISCUSSION

 

Details were provided about the background and relevant considerations and the consultations held.

 

Referring to paragraph 4.9 of the report (creating a new building and facilities at the Menai Science Park), it was enquired how the number of net jobs had increased from 20 to 49 when the investment total had reduced.

 

In response, it was explained that it was likely that the original figures for the project had provided an estimate that was much too low in terms of the number of jobs created by the project, and had provided an estimate that was too high in terms of the private sector investment that would be attracted by the project. This was a positive development in terms of jobs as the smaller project would provide more jobs, but was negative in terms of private sector investment. It also released the majority of the £21m from Growth Deal funding to seek alternative projects. There was originally no specific requirement in terms of match funding for projects and this varied from one project to the other, depending on their nature.  Clearly, there was a general portfolio target that was based on those original figures, so that anything that derived from the Growth Deal would contribute towards those targets that were aimed for by means of any alternative project that would be selected by the Board in due course.

 

Referring to recommendation 2.5 in the report, which requires the delegation of authority to the Portfolio Director, in consultation with the Chair and Vice-chair, to implement the Project Replacement Process and to undertake all necessary steps required to finalise the documentation required to commence the process. A request was also made for an update to the Board within 12 months on the number of jobs, as there was a need to ascertain when jobs would be created within the project timetable in its entirety.  It was also hoped that the University would work closely with industries to increase employment opportunities.

 

In response to a question regarding the robustness of current employment figures, it was noted that assurance processes established for business cases were much more robust than in the early days, prior to establishing the Portfolio Management Office.  By now, the challenge faced by business cases, especially in terms of their wider impact in the economy, as well as the challenge through the Gateway Review Process, provided much more assurance in terms of these figures.  It was further explained that the Board had only been requested to approve the request to change at present, and that the full business case for this project would be submitted to the Board meeting in March.

 

In response to a request for an update on the number of jobs, the intention was noted to report back to the Board on the jobs created, on an annual basis at least. 

 

The suggestion to receive applications from projects from the Digital Connectivity and Innovation in High Value Manufacturing programme ar part of the process was welcomed.