Agenda item

To consider the report of the Director of Resources and Housing detailing the progress made regarding the district heating project; advising of the outcome of the evaluation process undertaken in respect of the tenders received for the two procurements that will deliver the District Heating Network; outlining the funding arrangements and the business case that supports the project, and the associated construction programme and communications strategy for the next phase; and which seeks approval to proceed with the project, subject to certain conditions being met.

(Please Note – Appendices 1 and 4 to this report is designated as exempt from publication under the provisions of Access to Information Procedure Rule 10.4 (3))

Further to Minute No. 141, 10^th February 2016, the Director of Resources and Housing submitted a report detailing the progress which had been made in respect of developing a district heating network. In addition, the report detailed the outcome of the evaluation process undertaken in respect of the tenders received for the two procurements that would deliver the District Heating Network; outlined the funding arrangements and the business case that supported the project, and which sought approval to proceed with the project, subject to certain conditions being met.

Members acknowledged the ambitious nature of the scheme, and responding to a Member’s enquiry, further information and assurance was provided in respect of the scheme’s business plan and the actions which would be taken in order to mitigate any associated risk.

As part of the reassurance provided on such matters, although the recommendations within the submitted report were to delegate necessary authority to the Director of Resources and Housing to deliver the project, it was undertaken that prior to doing so under such delegated authority, consultation would be undertaken with the Leader of Council, the Executive Member for Environment and Sustainability and those Opposition Group Leaders on Executive Board.

Following consideration of Appendices 1 and 4 to the submitted report designated as exempt from publication under the provisions of Access to information Procedure Rule 10.4(3), which were considered in private at the conclusion of the meeting, it was

RESOLVED –

(a)  That the contents of the submitted report, including the appendices, be noted;

(b)  That the injection of £0.276m into the Capital programme in order to provide the balance of funding to deliver the district heating network programme, be approved;

(c)  That authority to spend for the following be approved:

(i)  The construction of the Spine District Heating Network of £21.276m funded through £17.276m supported prudential borrowing and £4m of grant from the West Yorkshire Combined Authority (WYCA);

(ii)  The connection of the council housing District Heating Network of £17.42m funded through £11.3m of HRA capital and £5.774m of European Regional Development Fund (ERDF);

·  With the above being subject to:- 

-  the Director of Resources and Housing being satisfied with the outcome of the external due diligence on the business case and securing the required heat loads; and

-  the approval of the grant from the WYCA.

(d)  That the necessary authority be delegated to the Director of Resources and Housing to enter into a contract with Vital Energi Utilities Ltd. for a maximum sum of £2m for a limited scope of works and services for the housing District Heating Network, as described at paragraph 3.8 of the submitted report;

(e)  That the necessary authority be provided in order to enter into the leases of the Sites for the energy centres based next to the Recycling and Energy Recovery Facility (referenced as site A within the submitted report) and at Saxton Gardens, and including the disposal of Site A at an undervalue;

(f)  That the necessary authority be provided in order to set up an energy trading company on the terms that are agreed by theDirector of Resources and Housing and in consultation with the Leader, theExecutive Member for ‘Environment and Sustainability’ and the Section 151Officer;

(g)  That the necessary authority be delegated to the Director of Resources and Housing in order to enter into all otherdocumentation and take all other decisions required for the delivery of the project,and also to approve operational decisions relating to the district heating scheme;

(h)  That further to the above resolutions, prior to the Director of Resources and Housing confirming the delivery of the project in line with the agreed delegated authority, the Director will first consult with the Leader of Council, the Executive Member for Environment and Sustainability and those Opposition Group Leaders on Executive Board.

(Under the provisions of Council Procedure Rule 16.5, Councillor A Carter required it to be recorded that he abstained from voting on the decisions referred to within this minute)