Tees Valley Combined Authority New Tees Crossing Outline Business Case 24 October 2019 Version 1.0 Issue Tees Valley Combined Authority 2085-04 ▪ New Tees Crossing ▪ Outline Business Case 24 October 2019 ▪ Version 1.0 ▪ Issue Document Control Client: Tees Valley Combined Authority Project Title: New Tees Crossing Job Number: 2085-04 Report Title: 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 i Tees Valley Combined Authority 2085-04 ▪ New Tees Crossing ▪ Outline Business Case 24 October 2019 ▪ Version 1.0 ▪ Issue Contents Executive Summary 1 1 Introduction 3 1.1 Overview 3 1.2 Business Case 3 1.3 Document Content and Structure 6 2 The Strategic Case 7 2.1.1 Tees Valley Area Profile 9 2.1.2 Middlesbrough and Stockton-on-Tees Area Profile 17 2.2 Step 2: Identifying Transport Barriers 19 2.2.1 Tees Valley Transport Issues 19 2.2.2 A19 and River Crossing Issues 24 2.3 Step 3: Exploring Options and Strategic Alternatives 38 2.3.1 Objectives 38 2.3.2 Options 39 2.4 Step 4: Exploring Impacts of Interventions 42 2.4.1 Main Impacts 42 2.4.2 Wider Impacts 43 2.4.3 Measures for Success 45 2.5 Step 5: Aligning with Wider Local Plans and Objectives 45 2.5.1 Tees Valley Local Plans 45 2.5.2 River Tees Port Expansion 46 2.5.3 Other Large Scale Developments 47 2.5.4 Middlesbrough Investment Prospectus 49 2.5.5 Stockton-on-Tees Economic Strategy 2017-2032 50 2.5.6 Other Transport Proposals 51 2.6 Step 6: Considering Wider Evidence and Stakeholder Views 53 2.6.1 Stakeholder Views 53 2.6.2 Wider Policy Alignment 55 3 The Economic Case 63 3.1 Options Appraised 63 3.2 Methodology and Assumptions 63 3.3 Present Value of Costs 65 ii Tees Valley Combined Authority 2085-04 ▪ New Tees Crossing ▪ Outline Business Case 24 October 2019 ▪ Version 1.0 ▪ Issue 3.3.1 Investment Costs 65 3.3.2 Operational and Maintenance Costs 66 3.4 Present Value of Benefits 67 3.4.1 Scheme Transport User Benefits 67 3.4.2 Construction and Maintenance Delays 67 3.4.3 Safety Benefits 68 3.4.4 Reliability Benefits 70 3.4.5 Wider Benefits 71 3.5 Environmental Impacts 72 3.5.1 Noise 72 3.5.2 Air Quality 74 3.5.3 Greenhouse Gases 74 3.5.4 Landscape 75 3.5.5 Townscape 76 3.5.6 Biodiversity 76 3.5.7 Historic Environment 77 3.5.8 Water Environment 77 3.6 Social Distributional Impacts 78 3.7 Value for Money 80 3.7.1 Benefit : Cost Ratio 80 3.8 Sensitivity Tests 82 3.9 Appraisal Summary Table 82 4 The Financial Case 83 4.1 Costs 83 4.1.1 Scheme Preparation and Construction 83 4.1.2 Maintenance Costs 85 4.2 Risk Allowance 85 4.3 Spend Profile 86 4.4 Budgets/Funding Cover 86 5 The Commercial Case 89 5.1 Commercial Viability 89 5.2 Output-based Specification 89 5.3 Procurement Strategy 90 5.3.1 Preferred Procurement Procedure 91 5.3.2 Portrack Relief Road 92 iii Tees Valley Combined Authority 2085-04 ▪ New Tees Crossing ▪ Outline Business Case 24 October 2019 ▪ Version 1.0 ▪ Issue 5.4 Payment and Charging Mechanisms 92 5.5 Risk Allocation and Transfer 92 5.6 Contract Length and Management 94 5.7 Human Resources Issues 94 6 The Management Case 95 6.1 Evidence of Similar Projects 95 6.2 Project Dependencies 96 6.3 Governance, Organisational Structure and Roles 97 6.4 Project Plan 99 6.5 Assurance and Approvals Plan 100 6.6 Communications and Stakeholder Management 102 6.7 Programme/Project Reporting 102 6.8 Risk Management Strategy 103 6.9 Benefits Realisation Plan 107 6.10 Monitoring and Evaluation Plan 111 7 Summary 113 Appendices Appendix A: Options Assessment Report Appendix B: Public Consultation Report Appendix C: Appraisal Specification Report Appendix D: Combined Modelling and Appraisal Report 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 24 October 2019 ▪ Version 1.0 ▪ 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 South Tees Development Corporation site, the expanding port facilities along the River Tees and the newly rebranded 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. 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. 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. 1 Tees Valley Combined Authority New Tees Crossing – Outline Business Case 24 October 2019 ▪ Version 1.0 ▪ Issue 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; • 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. The base cost estimate for the preferred option is £205,284,154, whilst the estimated outturn cost is £298,317,817, with the latter figure also including a calculated allowance for risk. The costs have been derived in a robust way using information from current and recently completed projects, and the works required have been quantified based on the current scheme designs. Several potential funding routes have been considered for the scheme, with the most appropriate being the Highways England Road Investment Strategy and the Large Local Majors element of the new National Roads Fund. Irrespective of the final funding route, given its high level of interaction with the Strategic Road Network, the scheme should, ideally, be delivered by Highways England through its procurement processes and procedures allied to the Project Control Framework. On this basis, the procurement strategy that has been prepared recommends that the Late Early Contractor Involvement method of procurement be adopted for the scheme, with appointment of the contractor after publication of the draft Orders and Environmental Statement. A sound governance structure has been in place throughout the life of the scheme, and Highways England has been closely involved in its development since inception. Highways England is supportive of the scheme, and its in-house technical assurance teams have reviewed the traffic, economic and environmental products prepared in support of this business case. A project plan has been developed setting out all of the key project tasks and their duration, the interdependencies between each of the tasks, and key milestones and gateways. This plan envisages a start of works in 2024 and completion of the scheme by 2027. Finally, to support the ongoing development and implementation of the scheme, a stakeholder engagement and public consultation strategy has been created and outline benefits realisation and monitoring and evaluation plans produced.