(THE ARCHES) FULL BUSINESS CASE THE A185/A194 CORRIDOR IMPROVEMENT SCHEME

111 Pages·2017·3.33 MB·English

/A194 CORRIDOR
AECOM The A185
IMPROVEMENT SCHEME (THE
ARCHES)
FULL BUSINESS CASE

THE A185/A194
CORRIDOR
IMPROVEMENT
SCHEME (THE
ARCHES)
FULL BUSINESS
CASE

JUNE 2017
AECOM The A185/A194 CORRIDOR IMPROVEMENT SCHEME (The ARCHES) FULL BUSINESS CASE

QUALITY INFORMATION

Document name Ref Prepared for Prepared by Date Reviewed by
The Arches
South Tyneside
Improvement Scheme 60445722 Craig Waller 10/06/2016 Gemma Paget
Council
Business Case

REVISION HISTORY

Revision Revision date Details Checked by Approved by
Outline Business
1.0 10/06/2016 Gemma Paget Gary Macdonald
Case
Outline Business
2.0 30/01/2016 Gemma Paget Gary Macdonald
Case
Outline Business
3.0 28 March 2017 Gemma Paget Gary Macdonald
Case
Full Business
4.0 16 June 2017 Gemma Paget Gary Macdonald
Case
Full Business
5.0 05 July 2017 Gemma Paget Gary Macdonald
Case

First Floor, One Trinity Gardens, Quayside, Newcastle upon Tyne, NE1 2HF
Telephone: [phone]
Website: www.aecom.com

ii
AECOM The A185/A194 CORRIDOR IMPROVEMENT SCHEME (The ARCHES) FULL BUSINESS CASE

This document has been prepared by AECOM Limited for the sole use of our client (the “Client”) and in accordance with generally accepted consultancy
principles, the budget for fees and the terms of reference agreed between AECOM Limited and the Client. Any information provided by third parties and
referred to herein has not been checked or verified by AECOM Limited, unless otherwise expressly stated in the document. No third party may rely upon
this document without the prior and express written agreement of AECOM Limited.

CONTENTS

Executive Summary ...................................................................................................................... 1
1. Introduction ........................................................................................................................... 5
1.1. Purpose of the Document ................................................................................................ 5
1.2. Background to Study ....................................................................................................... 5
1.3. The Proposal ................................................................................................................... 5
1.4. What the Project Will Achieve .......................................................................................... 6
1.5. Document Structure ......................................................................................................... 6
2. Project Description ............................................................................................................... 8
2.1. Introduction ...................................................................................................................... 8
2.2. Geographical Context ...................................................................................................... 8
2.3. Existing Road Layout ....................................................................................................... 8
2.4. Components of the Scheme ............................................................................................ 9
3. The Strategic Case .............................................................................................................. 11
3.1. Introduction .................................................................................................................... 11
3.2. Business Strategy .......................................................................................................... 12
3.3. Problem Identified .......................................................................................................... 16
3.3.1 Spatial Distribution of Land ............................................................................................ 16
3.3.2 South Tyneside Population ............................................................................................ 18
3.3.3 South Tyneside Economy .............................................................................................. 19
3.3.4 South Tyneside Society ................................................................................................. 20
3.3.5 South Tyneside Environment ......................................................................................... 22
3.3.6 Traffic Congestion ......................................................................................................... 23
3.3.7 Accident Analysis .......................................................................................................... 28
3.4. Impact of Not Changing ................................................................................................. 28
3.5. Drivers of Change .......................................................................................................... 31
3.5.1 North East Strategic Economic Plan (SEP) .................................................................... 33
3.5.2 North East Independent Economic Review .................................................................... 35
3.5.3 Local Transport Plan ..................................................................................................... 36
3.5.4 South Shields 365 Town Centre Vision .......................................................................... 36
3.6. Objectives...................................................................................................................... 38
3.7. Options Identified........................................................................................................... 41
3.8. Project Scope ................................................................................................................ 44
3.9. Interdependencies ......................................................................................................... 45
iii
AECOM The A185/A194 CORRIDOR IMPROVEMENT SCHEME (The ARCHES) FULL BUSINESS CASE

3.10. Constraints .................................................................................................................... 45
3.11. Stakeholders ................................................................................................................. 45
3.12. Measures of Success .................................................................................................... 46
3.13. Summary ....................................................................................................................... 47
3.14. Conclusion..................................................................................................................... 48
4. The Economic Case ............................................................................................................ 50
4.1. Introduction .................................................................................................................... 50
4.2. Approach to Appraisal ................................................................................................... 50
4.3. Traffic Modelling ............................................................................................................ 51
4.4. Options Appraised ......................................................................................................... 56
4.5. Economic Appraisal Input and Assumptions .................................................................. 56
4.6. Sensitivity and Risk Profile ............................................................................................ 58
4.7. Value for Money Statement ........................................................................................... 60
4.8. Appraisal Summary Table ............................................................................................. 64
5 The financial Case ............................................................................................................... 66
5.1 Introduction .................................................................................................................... 66
5.2 Outline Approach ........................................................................................................... 66
5.3 Costs ............................................................................................................................. 67
5.4 Ongoing Maintenance Costs.......................................................................................... 67
5.5 Funding ......................................................................................................................... 67
5.6 Section 151 Officer Sign-Off .......................................................................................... 68
6 The Commercial Case ......................................................................................................... 70
6.1 Introduction .................................................................................................................... 70
6.2 Outline Approach ........................................................................................................... 71
6.3 Output Based Specification ........................................................................................... 71
6.4 Procurement Strategy and Sourcing Options ................................................................. 72
6.5 Payment Mechanisms ................................................................................................... 72
6.6 Pricing Framework and Charging Mechanisms .............................................................. 72
6.7 Risk Allocation and Transfer .......................................................................................... 72
6.8 Contract Length ............................................................................................................. 73
6.9 Human Resource Issues ............................................................................................... 73
6.10 Contract Management ................................................................................................... 74
7 The Management Case ....................................................................................................... 76
7.1 Introduction .................................................................................................................... 76
7.2 Evidence of Similar Projects .......................................................................................... 77
7.3 Programme / Project Dependencies .............................................................................. 77
7.4 Governance, Organisational Structure & Roles.............................................................. 78
7.5 Programme / Project Plan / Project Reporting ............................................................... 82
iv
AECOM The A185/A194 CORRIDOR IMPROVEMENT SCHEME (The ARCHES) FULL BUSINESS CASE

7.6 Assurance & Approvals Plan ......................................................................................... 83
7.7 Communications and Stakeholder Management............................................................ 84
7.8 Project Reporting ........................................................................................................... 84
7.9 Implementation of Work Streams ................................................................................... 84
7.10 Key Issues for Implementation ....................................................................................... 85
7.11 Contract Management ................................................................................................... 85
7.12 Risk Management Strategy ........................................................................................... 86
7.13 Benefits Realisation, Monitoring and Evaluation ............................................................ 89
7.14 Contingency Plan .......................................................................................................... 93
7.15 Options .......................................................................................................................... 93

Appendix A Arches Preferred Scheme Layouts
Appendix B Option Appraisal Report
Appendix C Modelling Assumptions and Results
Appendix D Development Uncertainty Log
Appendix E Appraisal Summary Table
Appendix F Scheme Cost Estimate
Appendix G Quantified Risk Assessment
Appendix H Stakeholder Communication Plan
Appendix I Programme
Appendix J Local Model Validation Report
Appendix K Environmental Reports
Appendix L Section 151 Officer Sign Off

v
AECOM The A185/A194 CORRIDOR IMPROVEMENT SCHEME (The ARCHES) FULL BUSINESS CASE

EXECUTIVE SUMMARY
Scheme Background
The Arches junction is located at the junction of two key strategic road corridors in South Tyneside: the
A194 and the A185. The A194 provides the main route into South Shields from the A19 and the A185
provides access to the Port of Tyne and the Tyne Tunnels.
The existing junction layout consists of a small at-grade roundabout, with two-lane dual carriageway
approaches on the A194 and a one-lane single carriageway approach on the A185. The junction
experiences congestion and delay in the peak morning and evening periods, with queuing occurring on the
A194 eastbound approach to the junction. The problem is more acute in the AM period, but future
development is forecast to create extensive queuing in the PM period.
A preferred scheme has been identified for the Arches, which involves converting the roundabout to traffic
signals and adopting a partial gyratory layout with all movements maintained. This scheme is known as
Option A2D. The imposed mandatory speed limit of the junction will tie in with existing speed limits on the
A194 and A185.
Strategic Need
The strategic case confirms that the major problem in South Tyneside is traffic congestion on both the local
and strategic highway network, which is restricting the economic growth potential of the area and reducing
accessibility to employment, training and leisure opportunities. This compounds the existing problems of
social deprivation and slow economic growth, which have been inherent in South Tyneside since the
decline of the ship building industries in the 1980s.
The Arches junction forms a critical intersection between the A185 and A194, which provide the key routes
into South Shields from the north, south and west. Current congestion issues at this junction are impacting
on the attractiveness of South Tyneside as a place in which to live, work and invest. Exacerbation of these
congestion issues will jeopardise future development plans for the area, including the potential growth of
the Port of Tyne and the success of the International Advanced Manufacturing Park (IAMP) for providing
new and exciting employment opportunities for existing residents of South Tyneside.
Not only will improvements to the Arches junction benefit key regional economic opportunities, such as
Port of Tyne and IAMP, and the very successful Nissan plant and its supply chain, it will also facilitate more
local development such as the regeneration of South Shields town centre and will reinforce the impression
of South Shields as a key regional tourism destination.
Any improvements to traffic congestion at the Arches junction will have a positive impact on air quality in
the area, which is within close vicinity of an Air Quality Management Area (AQMA) on Leam Lane. This will
not only benefit the local environment but will improve the quality of life and well-being of the local
residents of South Tyneside.
Scheme Objectives
Given the current political agenda, together with the characteristics of the area, the following scheme
objectives have been identified:
 To reduce congestion and improve journey time reliability through the Arches junction for existing
users;
 To provide sufficient additional capacity at the Arches junction to accommodate future traffic growth
and support emerging development sites;
 To reduce deprivation and improve the local economy by providing the infrastructure required to
support development;
 To prevent worsening air quality at the Arches junction by removing future levels of congestion and
queuing traffic.
1
AECOM The A185/A194 CORRIDOR IMPROVEMENT SCHEME (The ARCHES) FULL BUSINESS CASE

Option Development
Option development for the Arches junction considered five main options, with a number of variants on
each. The five main options are listed below:
 Arches Option 1: A fully signalised partial gyratory (maintaining A194 eastbound and westbound);
 Arches Option 2: A partially signalised partial gyratory (maintaining A194 eastbound and
westbound);
 Arches Option 3: A full gyratory (including A194, A185 and Hobson Way);
 Arches Option 4: A stand-alone signalised junction (at the existing Arches junction); and
 Arches Option 5: Redirection of traffic from A194 to A185 via a U-turn at the A194 Hobson Way
roundabout.
Economic Case
The options taken forward for appraisal were assessed in the South Tyneside VISSIM model. The report
‘The Arches & A185 Option Development & Traffic Modelling Report’ (contained in Appendix B) details the
option development and assessment of the options. The appraisal identified option A2D to be the
preferred option due to its performance both economically and in meeting the objectives of the scheme.
Detailed design has since been undertaken on option A2D. A TUBA assessment of this scheme was
carried out using time, distance and demand outputs from the South Tyneside VISSIM model to
understand the value for money the scheme will deliver. Accidents were appraised using COBALT. The
results of the assessment for the core scenario are shown in the table below.
ITEM CORE SCENARIO
BENEFITS
Travel Time 44,418
Vehicle Operating Cost 2,061
Greenhouse Gases 367
Wider Public Finances (Indirect Taxation Revenues) -917
Total Accident Benefits Saved by Scheme -1,909
Present Value of Benefits (PVB) 44,020
COSTS
Present Value of Costs (PVC) 6,934
SUMMARY
Net Present Value 37,086
Benefit Cost Ratio (BCR) 6.35
(Costs in £’000s in 2010 prices)

The results show that the scheme delivers very high value for money. The appraisal also considered the
wider economic impacts of the scheme, as well as the social and distributional impacts, to enable the
completion of the full Appraisal Summary Table.

2
AECOM The A185/A194 CORRIDOR IMPROVEMENT SCHEME (The ARCHES) FULL BUSINESS CASE

Financial Case
The tendered cost price for the scheme is £8,098,765.51.

The North East LEP growth deal was awarded a total of £329.9 million funding between July 2014 and
January 2015. £7 million of this has been allocated toward the Arches improvement scheme; 86% of the
total scheme cost.

South Tyneside Council will provide a 14% local contribution to the scheme; a value of just over £1 million.
This shows a local commitment to the scheme and underlines the belief that improvements to the Arches
junction will improve traffic conditions in South Tyneside.

Following completion of the scheme, all associated infrastructure would be maintained by South Tyneside
Council, with the exception of the traffic signals which would be maintained by the Regional Traffic Signals
Group and the street lighting, which will be maintained by Balfour Beatty.

Commercial Case
The detailed design of the Arches scheme has been undertaken by AECOM and is now complete, subject
to comments being addressed. A contractor (Galliford Try) is in position to build the scheme, having being
procured on a framework contract to South Tyneside Council in a formal tender process.

The project plan highlights that construction of the scheme is scheduled to start in autumn 2017, once the
Lindisfarne scheme has been completed. It is due to be completed in 2018.

Management Case
South Tyneside Council has a history of delivering a programme of highway works, most of which are
routinely funded from the annual Local Transport Plan capital grant allocation. As part of this programme
of works, design, road safety, site supervision and construction experience were a prerequisite for the
authority. In addition, South Tyneside has been involved with some significant infrastructure projects which
further demonstrate adequate capability to ensure the Arches improvement scheme is delivered in a timely,
safe, and efficient manner.
The Project Owner is David Cramond, Executive Director for Economic Development at South Tyneside
Council. David Pringle will be Project Manager for the scheme; David is currently delivering the Lindisfarne
Improvement scheme and therefore is experienced in the delivery of similar schemes.
A quantified risk register has been developed for the scheme is contained in Appendix G

.
3
INTRODUCTION
01
1
AECOM The A185/A194 CORRIDOR IMPROVEMENT SCHEME (The ARCHES) FULL BUSINESS CASE

1. INTRODUCTION
1.1. Purpose of the Document
In September 2015, South Tyneside Council commissioned AECOM to assist with the
development of a preferred option for the Arches junction and develop a five stage business case
to be submitted as part of the funding bid to the North East Combined Authority. This document
represents the full business case associated with the scheme.
1.2. Background to Study
In the summer of 2013, the Government introduced the Strategic Economic Plan as a mechanism
to devolve power and funding to the local level through the Local Enterprise Partnerships. The
Strategic Economic Plan is a six year plan, which has a sole focus to bring the economy and
economic growth to the centre of our thinking.
In March 2014, the North East Local Enterprise Partnership (LEP) published their Strategic
Economic Plan, More and Better Jobs (an updated SEP is currently being developed). The
Strategic Economic Plan expressed the need to create over 60,000 new private sector jobs in the
North East to develop a balanced and sustainable economy. It is recognised within the plan, that
the effectiveness of the transport network limits the economic development of the North East. As
such, a number of transport schemes were included in the Strategic Economic Plan, including the
Arches improvement. The North East Strategic Economic Plan focussed on five key areas:
 Driving innovation and improving business support;
 Working with schools to improve outcomes in education;
 Tackling skills and economic inclusion;
 Building economic assets and infrastructure; and
 Enhancing transport and digital connectivity.
To enable the plans to be delivered effectively across each Local Enterprise Partnership area, the
Government introduced the Local Growth Fund. In July 2014, it was confirmed that the North East
LEP would receive a £289.3 million share of the Local Growth Fund, increased by an additional
£40.6 million announced in January 2015 to support economic growth in the region, of which,
£47.9 million was new funding confirmed for 2015/16 and £69.6 million was new funding confirmed
for 2016/17 to 2021. A recent settlement of almost £50 million has just been confirmed to the North
East LEP for LGF round 3.
It is the aim of the Strategic Economic Plan that new projects should still be able to seek funding
throughout the lifetime of the plan. Partners wishing to seek funding from the plan need to ensure
that their schemes are sufficiently developed such that they can demonstrate value for money.
This business case demonstrates the need for the scheme in accordance with the Department for
Transport WebTAG guidance and the North East Local Transport Board Assurance Framework.
1.3. The Proposal
The Arches is located at the junction of two key strategic road corridors in South Tyneside: the
A194 and the A185. The A194 provides the main route into South Shields from the A19 and the
A185 provides access to the Port of Tyne and the Tyne Tunnels.
The existing junction layout consists of a small at-grade roundabout, with two-lane dual
carriageway approaches on the A194 and a one-lane single carriageway approach on the A185.
The junction experiences congestion and delay in the peak morning and evening periods, with
5