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Tees Valley Combined Authority New Tees Crossing Updated Outline Business Case 11 November 2020 Version 2.0 Issue Tees Valley Combined Authority 2240-01 ▪ New Tees Crossing ▪ Updated Outline Business Case 11 November 2020 ▪ Version 2.0 ▪ Issue Document Control Client: Tees Valley Combined Authority Project Title: New Tees Crossing Job Number: 2240-01 Report Title: Updated Outline Business Case Date Version Status Author Checked Approved 18/12/2018 0.1 Draft E Roberts J Spruce J Spruce 20/03/2019 0.2 Draft E Roberts J Spruce J Spruce 10/10/2019 0.3 Draft E Roberts J Spruce J Spruce 24/10/2019 1.0 Issue E Roberts J Spruce J Spruce 10/09/2020 1.1 Draft E Roberts J Spruce J Spruce 30/10/2020 1.2 Draft E Roberts J Spruce J Spruce 03/11/2020 1.3 Draft E Roberts J Spruce J Spruce 11/11/2020 2.0 Issue E Roberts J Spruce J Spruce i Tees Valley Combined Authority 2240-01 ▪ New Tees Crossing ▪ Updated Outline Business Case 11 November 2020 ▪ Version 2.0 ▪ Issue Contents Executive Summary 1 1 Introduction 4 1.1 Overview 4 1.2 Business Case 4 1.3 Document Content and Structure 7 2 The Strategic Case 8 2.1 Step 1: Setting the Context 10 2.1.1 Tees Valley Area Profile 10 2.1.2 Middlesbrough and Stockton-on-Tees Area Profile 18 2.2 Step 2: Identifying Transport Barriers 20 2.2.1 Tees Valley Transport Issues 20 2.2.2 A19 and River Crossing Issues 25 2.3 Step 3: Exploring Options and Strategic Alternatives 39 2.3.1 Objectives 39 2.3.2 Options 40 2.4 Step 4: Exploring Impacts of Interventions 44 2.4.1 Main Impacts 44 2.4.2 Wider Impacts 45 2.4.3 Measures for Success 47 2.5 Step 5: Aligning with Wider Local Plans and Objectives 47 2.5.1 Tees Valley Local Plans 47 2.5.2 River Tees Port Expansion 48 2.5.3 Other Large Scale Developments 49 2.5.4 Middlesbrough Investment Prospectus 51 2.5.5 Stockton-on-Tees Economic Strategy 2017-2032 52 2.5.6 Other Transport Proposals 53 2.6 Step 6: Considering Wider Evidence and Stakeholder Views 55 2.6.1 Stakeholder Views 55 2.6.2 Wider Policy Alignment 57 3 The Economic Case 66 3.1 Options Appraised 66 3.2 Methodology and Assumptions 66 ii Tees Valley Combined Authority 2240-01 ▪ New Tees Crossing ▪ Updated Outline Business Case 11 November 2020 ▪ Version 2.0 ▪ Issue 3.3 Present Value of Costs 68 3.3.1 Investment Costs 68 3.3.2 Operational and Maintenance Costs 69 3.4 Present Value of Benefits 69 3.4.1 Scheme Transport User Benefits 69 3.4.2 Construction and Maintenance Delays 70 3.4.3 Safety Benefits 71 3.4.4 Reliability Benefits 72 3.4.5 Wider Benefits 74 3.5 Environmental Impacts 74 3.5.1 Noise 75 3.5.2 Air Quality 76 3.5.3 Greenhouse Gases 77 3.5.4 Landscape 78 3.5.5 Townscape 79 3.5.6 Biodiversity 79 3.5.7 Historic Environment 80 3.5.8 Water Environment 80 3.6 Social Distributional Impacts 82 3.7 Value for Money 83 3.8 Appraisal Summary Table 85 3.9 Preferred Option 85 3.10 Sensitivity Tests 85 3.10.1 Highways England Cost Estimate 86 3.10.2 High and Low Growth 87 3.10.3 OBR Lower Growth Forecasts 88 3.10.4 High Carbon Price Valuation 88 3.10.5 Summary 89 4 The Financial Case 90 4.1 Costs 90 4.1.1 Scheme Preparation and Construction 90 4.1.2 Maintenance Costs 91 4.2 Risk Allowance 91 4.3 Spend Profile 92 4.4 Budgets/Funding Cover 93 iii Tees Valley Combined Authority 2240-01 ▪ New Tees Crossing ▪ Updated Outline Business Case 11 November 2020 ▪ Version 2.0 ▪ Issue 5 The Commercial Case 95 5.1 Commercial Viability 95 5.2 Output-based Specification 95 5.3 Procurement Strategy 96 5.4 Payment and Charging Mechanisms 97 5.5 Risk Allocation and Transfer 97 5.6 Contract Length and Management 99 5.7 Human Resources Issues 99 6 The Management Case 100 6.1 Evidence of Similar Projects 100 6.2 Project Dependencies 100 6.3 Governance, Organisational Structure and Roles 101 6.4 Project Plan 104 6.5 Assurance and Approvals Plan 105 6.6 Communications and Stakeholder Management 106 6.7 Programme/Project Reporting 107 6.8 Risk Management Strategy 108 6.9 Benefits Realisation Plan 113 6.10 Monitoring and Evaluation Plan 114 7 Summary 118 Appendices Appendix A: Staged Overview of Assessment Report Appendix B: Public Consultation Report Appendix C: Appraisal Specification Report Appendix D: Combined Modelling and Appraisal Report / End of Stage 2 Economics Appendix E: Environmental Assessment Report Appendix F: TAG Supporting Workbooks and Worksheets Appendix G: Appraisal Summary Tables Appendix H: Options Estimate Report Appendix I: Procurement Strategy Appendix J: Project Management Plan Appendix K: Project Plan Appendix L: Stakeholder Engagement and Public Consultation Strategy Appendix M: Risk Management Plan Appendix N: Risk Register Appendix O: Benefits Realisation Plan Appendix P: Monitoring and Evaluation Plan iv Tees Valley Combined Authority New Tees Crossing – Outline Business Case 11 November 2020 ▪ Version 2.0 ▪ Issue Executive Summary This document and its supporting appendices comprise the Outline Business Case for a new strategic road crossing of the River Tees, in the approximate location of the existing A19 Tees Viaduct. As this submission clearly demonstrates, there is a strong and robust case for investment in a New Tees Crossing, therefore it is recommended that the scheme is prioritised for funding so that the many benefits that it will deliver across the Tees Valley City Region can be realised as soon as possible. In particular, the scheme will: • Relieve the existing A19/A66 bottleneck, enhancing the reliability of people’s journeys across the Tees Valley’s road network and reducing the cost to the local and national economy due to congestion and delays; • Reduce journey times for local people – most drivers are expected to save more than two minutes of travel time during peak periods – unlocking development potential in the City Region through the provision of additional road capacity and making the Tees Valley more attractive to inward investors and visitors; • Improve the resilience of the network and therefore reduce the negative impact of events such as roadworks and road traffic accidents; • Make journeys safer by improving the standard and capacity of the road network; • Improve access to the Tees Valley’s Enterprise Zone sites, the Teesworks site, the expanding port facilities along the River Tees (where there is an aspirations for a freeport) and Teesside International Airport; • Deliver connectivity and journey time reliability enhancements for freight and logistics traffic – a key component of the Tees Valley’s growth plans; • Support the economic growth objectives of the Northern Powerhouse and the Tees Valley City Region; and • Help realise the full benefit of the committed A19 Norton to Wynyard improvement scheme, which is due for completion by 2022/23. The preferred option – the A19 Tees Viaduct Capacity Enhancement Option – has been identified as the one that will achieve the agreed objectives and provide a holistic solution to the identified national, regional and local issues identified. 1 Tees Valley Combined Authority New Tees Crossing – Outline Business Case 11 November 2020 ▪ Version 2.0 ▪ Issue In summary, the preferred option for the A19 New Tees Crossing will provide localised widening of the existing viaduct structure to provide three southbound lanes throughout the length of the existing Tees Viaduct between the A1046 and A66 intersections. In addition, it will also provide a new bridge structure to carry local northbound traffic, to the west of the existing Tees Viaduct structure. The economic analysis of the preferred option demonstrates that an adjusted benefit : cost ratio of over 1.5 is generated if wider economic impacts are considered, representing Medium value for money. However, it is important to note that the overall value for money of the scheme encompasses more than just the benefit : cost ratio value – there are a range of benefits for which the standard approach does not provide a monetisation methodology, or for which the calculation is outside of the current scope of assessment. These benefits are more strategic in nature, and include: • Unlocking future development growth across the City Region through the provision of additional road capacity (although not specific developments are dependent on the scheme); • Increased network resilience through the provision of additional lanes across the River Tees and the removal of existing vehicle conflicts; and • Reducing the negative impact of the ongoing and significant maintenance requirements associated with the existing Tees Viaduct and Newport Bridge structures. A cost estimate for the preferred option has been developed by Highways England including a calculated allowance for risk assuming they take the lead in scheme delivery from this point forward. This outturn cost is £468,573,365, which also includes a further allowance for portfolio risk. Excluding portfolio risk, this figure is £426,592,574. Several potential funding routes have been considered for the scheme, with Department for Transport considering the most appropriate to be the Large Local Major schemes element of the new National Roads Fund, with a contribution from TVCA. TVCA is proposing to contribute £21.33 million (5% of the Highways England cost estimate excluding portfolio risk, as would be the case with a scheme not on the Strategic Road Network) from its own resources to the scheme, having already provided a significant contribution to the development costs alongside Government funding.
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