Decision details

The Cabinet Member for Regeneration and Renters approved:

The contract award to Vital Energi Utilities Limited, for the provision of Energy Management Services for the Ebury Bridge Renewal Scheme across Phases 1, 2 and 3, for a total sum of £4,274,485.83 exc. of VAT [£5,129,382.99 incl. VAT]. The contract term is for a period of 7 years to commence from September 2024 until September 2031.

Delegated authority to the Executive Director of Regeneration, Economy and Planning the decision to proceed with the contract award following the outcome of the Section 20 Notice of Proposal leaseholders’ consultation process.

Utilised the value of the £1,428,779 for Capital Expenditure for Void Payments and Set-up costs. See breakdown for costs below:

a.      Void Payments: Approved the spend of £1,400,000 for the Council (WCC) to make payments of £200,000 per annum over the 7-year period in respect of Phase 3 of the development scheme being delivered. These costs will be drawn from the project contingency budget for Phase 1.

b.     Set-up costs: Approved spend of £28,779 for the Council (WCC) to pay for the acceptance of Energy centres, infrastructure, and mobilisation fees.

The remaining costs will be recovered or recharged through either service charges or operationally within the HRA Business Plan.

The contract award is subject to the outcome of the S20 consultation period, which lasts 32 days. Following this period, approval for the contract award will be sought from the Executive Director via Delegated Authority.

The reason for the recommendation was to secure the contract sum of £4,274,485.83 exc. VAT and appoint for the provision of “Energy Company Management Services” to provide energy management of systems on residential block, estate and external services including the energy facility for the Ebury Bridge Regeneration across Phases 1, 2 & 3.

The Council’s (WCC) payment of £1,428,779 will cover the £1,400,000 over the 7-year period (£200,000 per annum) is in respect of related costs impact for maintenance services of the energy centre (heating and cooling plant) which serves phases 1 and 3 combined. The energy centre design and capacity incorporate both Phases 1 & 3 of the build. The Phase 3 of the development Scheme payments are being in respect of capital cost of the energy centre and its associated routine maintenance. The Phase 3 development programme is due to be delivered in 2031. The remaining £28,779 will be used for ‘setting up costs’ for the acceptance of Energy Centres, infrastructure, and mobilisation that will be billed by Vital Energi directly to WCC. These costs are not considered recoverable from any of the end user customers of the heat and cooling network in occupancy under the Scheme.

The balance of contract costs will be fully recovered through either a recharge to leaseholders or operationally via the HRA Business Plan.