Agenda item

Graham Williams, Project Manager and Henry Aron, Low Carbon Energy Programme Manager to present the report.

 

1.       To endorse the proposed process for appointing a project sponsor.

2.       To delegate to the Portfolio Director in consultation with the Chair, Vice Chair and Monitoring Officer the authority to finalise the documentation for the selection process for appointing a project sponsor and deliver the process on behalf of the Board.

3.       To note that, following the completion of the selection process, a recommendation will be made to the Economic Ambition Board for approval.

 

 

The report was submitted by Henry Aron (Low Carbon Energy Programme Manager) and Graham Williams (Project Manager).

 

RESOLVED

 

1.    To endorse the proposed process for appointing a project sponsor.

2.    To delegate to the Portfolio Director in consultation with the Chair, Vice Chair and Monitoring Officer the authority to finalise the documentation for the selection process for appointing a project sponsor and deliver the process on behalf of the Board.

3.    To note that, following the completion of the selection process, a recommendation will be made to the Economic Ambition Board for approval.

 

REASONS FOR THE DECISION

 

The purpose of the report is to seek endorsement for delivering the process of appointing a project sponsor to deliver the project.

 

The agreed way forward for the project is to appoint a partner (project sponsor) by a competitive selection process to develop a business case and deliver a hydrogen hub project.  This started with a Prior Information Notice (PIN) to assess the market’s appetite, capacity andcapability to deliver the project in partnership with Ambition North Wales.

 

On 30th September 2022, the North Wales Economic Ambition Board agreed the following steps:

 

·         To endorse the next steps for the project and the draft procurement principles;

·         To delegate to the Portfolio Director, in consultation with the Chair and Vice-Chair, the authority to finalise the procurement specification and then to undertake the procurement activity on behalf of the board.

·         To note that following the completion of the procurement process, a recommendation will be made to the Board for approval.

 

The Portfolio Management Office subsequently worked with a team of specialist procurement advisors from the consultancy Local Partnerships to consider the most appropriate approach for appointing a sponsor. 

 

A number of meetings and workshops were held to discuss the potential procurement routes together with their advantages, disadvantages, and constraints. The process concluded that the use of a competitive public procurement in the context of the Public Procurement Regulations would not be the best approach for appointing a project sponsor.

 

Consequently, the option of utilising a process similar to the ‘Replacement Projects Process’ was considered as a more suitable process for appointing a sponsor. It was recommended that the process would provide a suitable alternative to a formal procurement process and would assist accelerate the process, provided that the process was implemented openly and transparently and communicated widely to potentially interested parties.

 

DISCUSSION

 

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

 

In response to an observation, it was agreed that the timescale for completing the process was challenging but it would be sought to accelerate this forward as soon as possible.  It was noted that a briefing event had been pencilled in for 18 April, and it would be an opportunity to learn lessons from similar processes, and also to receive questions from the market.  These questions would need to be further considered and consulted upon, and our processes and documentation would possibly need to be amended slightly. It was also emphasised that it was important for the Board to understand that some external factors could change by Summer 2023, which would lead to new opportunities for all parties to discuss collaboration with other organisations, and the Clarification and Negotiation step allowed time to resolve the identified possibilities successfully, and also allow every party to address any changes in circumstances. It was currently difficult to project the timetable after appointing the sponsor as this would depend on the successful sponsor and their proposed project, the scope of the project and the timetable for delivery.

 

In response to a request for more assurance on the legal side, it was noted that a lot of work had gone into this matter, and that it was a very technical and innovative field. There was a desire to commission a specialist company to support the work and provide legal advice.  The report identified the move from competitive public procurement to utilising a process similar to the 'Replacement Projects Process', and the main issues were regarding subsidy, and how exactly the plan was structured, so that it did not fall foul of these requirements.  This was one of the next steps that would take place in terms of the legal work with specialist support. It was fully accepted that this type of projects required an expertise in a specific field, and this was the intention.

 

In response to an enquiry, it was confirmed that there were sufficient resources in the budget of the Portfolio Management Office to meet costs associated with introducing the competitive process to appoint a sponsor, as they would undertake the work, and that the expertise was there. Should there be a need to bring in external expertise, there was reserve funding for this in the budgets to an extent, but clearly that funding would then be unavailable for other purposes. Therefore, it was a matter of monitoring the situation, but it was possible to fund this step, namely changing the procurement system to bring in expertise.  It was further noted that it was possible to set a budget for next year, therefore, staff would be retained and work on this within the Portfolio Management Office.  Also, a budget would be available in terms of developing a project to commission those experts as required over the next 12 months.

 

It was noted that these costs would need to be considered when setting next year's budget.