Contact: Alan Giles, ext 7712 email: [email protected]

1. Introduction

1.1 This report concerns improvements to the Micheldever Asphalt Plant site and changes to the future management of the premises in order to provide for a Foamix production capability and establishment of a Highways Term Maintenance Contract depot facility.

2. Background

2.1 The Hampshire County Council owned land at Micheldever is presently divided into three main sections:

(i) Highways Laboratory area;

(ii) Hampshire Transport Management (HTM) workshop, fuel facility and yard; and

(iii) Asphalt Works area, currently leased to Raynesway Construction and managed by its sub-contractor Foster Yeoman Limited (FYL).

2.2 The site itself is generally in a poor condition, having suffered from a lack of capital investment over many years which has contributed to inadequate facilities to meet modern Health and Safety and environmental standards. Importantly, the asphalt plant also came to the end of its working life this year and is beyond economic repair. The total cost of essential improvements to the site is estimated to be £230,000 together with demolitions costed at £50,000.

2.3 As a replacement for the asphalt plant, FYL has invested approximately £700,000 in a mobile Foamix production plant which is operated from the site. In liaison with the County Council's Technical Advice Group, FYL has been developing the production of Foamix material using recycled excavated blacktop material from County Council and Motorway and Trunk Road highway maintenance schemes.

3. Current Issues

3.1 The current issues affecting the site are:

(i) dilapidated and unsafe buildings requiring demolition;

(ii) asphalt plant requiring demolition;

(iii) lack of adequate surface water drainage;

(iv) lack of proper surfacing;

(v) lack of security fencing;

(vi) lack of adequate lighting on site;

(vii) need to address the County Council's corporate aspirations to encourage greater recycling of highway maintenance materials by use of techniques such as Foamix;

(viii) preparation to address the need for disposing of considerable quantities of Incinerator Bottom Ash which will soon start to be produced by the County Council's energy from waste plants;

(ix) need to provide alternative depot facilities for the Highways Term Maintenance Contractor following the unavailability of the depot at Bar End, Winchester with effect from the spring 2005;

(x) need to identify a mechanism by which there is a shared responsibility to fully fund the improvements required at the site; and

(xi) lack of integrated control and management of the site in line with the other Highways Term Maintenance Contract depots.

4. Proposals

4.1 In order to address the above issues, it is proposed that the three main parties concerned with the management and use of the Micheldever site, namely the County Council, Raynesway Construction and FYL, jointly fund the required improvements in order to secure the site as a good quality facility for Foamix production and as a Highways Term Maintenance Contract (TMC) depot. In addition, the future management of the Foamix and TMC depot areas should be undertaken by Highways Management, which currently manages seven other TMC depots; an arrangement that has contributed to significant improvement in these Council owned property assets in recent years.

4.2 Negotiations have taken place between Property, Business and Regulatory Services (PBRS), Highways Management, Raynesway Construction and FYL and provisional agreement has been reached as to the details of the works to be carried out and the funding arrangements.

4.3 The arrangements include details of future rental payments for the TMC depot and Foamix Production parts of the site under new leasing proposals to be reported to the Executive Member for Policy and Resources for approval. The rental for the Foamix Production area will be based on a rate per tonne of Foamix material produced up to an annual limit of £15,000 (until reviewed in 2011) intended to provide an incentive for increasing future production rates. The initial investment contribution of £100,000 by Raynesway and FYL towards site improvements will be offset against the annual rental (ie there will be an effective rent rebate until the contractors' initial investment costs are recovered over an estimated six year period). In the event that Raynesway does not secure the renewed TMC, however, the Environment Department will need to reimburse to Raynesway any unpaid proportion of that initial investment.

4.4 The total cost of installing and operating the Foamix production plant will be borne by FYL and Raynesway; and the cost of demolishing the defunct asphalt plant and other structures, together with upgrades to the fuel facilities within the HTM works area, will, subject to approval by the Executive Member for Policy and Resources, be funded by PBRS at an estimated cost of £80,000.

5 Environment Department Contribution

5.1 The contribution from the Environment Department is proposed to be £100,000. This figure will be used to improve the condition of the site, as discussed above, in order to help secure it as a good quality depot area which will play a major part in the County Council's sustainability programme for the future with regard to both highway construction works and waste management, and provide additional facilities contributing to the better management of the Highways Term Maintenance Contract.

Recommendations

1. That approval be given for £100,000 to be spent on improvements to Micheldever Depot, as Hampshire County Council Environment Department contribution to the agreed site improvements required to secure the site as a Foamix production facility and Highways Term Maintenance Contract depot area.

2. That approval be given for the management of the Foamix Production area and Highways Term Maintenance Contract depot area to be taken over by the Management Branch of Environment Department to be operated in line with the other County Council highways depots.

3. That approval be given for the future rental income from the depot to be offset against any agreed capital investment on the site by the lessees.

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