FIVE N.WALES GROWTH DEAL PROJECTS PUT ON ‘RED LIST’ AS CONSTRUCTION SECTOR COSTS SPIRAL
AMBITION North Wales has placed five Growth Deal projects on the ‘red list’ - partly due to the spiralling costs in the construction sector.
The group secured £240m in a joint investment over 10 years from the Welsh and UK governments - with 20 projects on its programme that is designed to birng £1bn of investment in the region and create thousands of jobs.
They are already making progress with a £3m investment in Bangor University’s Digital Signal Processing (DSP) project that could create 40 direct jobs and develop digital tech to help the whole region. The business case has also been backed for a £9m investment to Morlais tidal scheme off Anglesey.
But they are also a number of projects being flagged as ‘red’ due to risks to the schemes. There are a number of factors that put them at risk - including the major spike in construction costs as supplier prices spiral.
The projects are:
■ Glynllifon Rural Economy Hub (Agri-food and Tourism Programme) – planning permission to be secured and potential funding gap due to escalating capital build costs.
■ Low Carbon Energy Centre of Excellence – project under review due to change request for capital and revenue projections.
■ Key Strategic Site, Bodelwyddan (Land and Property Programme) – outline planning consent on the site has lapsed and the project will need to be reviewed when the new planning policy for the site is established.
■ Llysfasi Net Zero Farm (Agri-food and Tourism Programme) – delay to project incorporating Gateway 2 review feedback.
■ Tourism Talent Network (Agri-food and Tourism Programme) – legal structure of hub and spoke model to be agreed and business case development is running behind schedule.
A report said: “Affordability is now the biggest risk facing the portfolio with inflation, supply chain issues and significant construction cost increases the main factors driving this increase. The increased risk around affordability has a knock-on effect across the portfolio increasing risks around project delay, meeting spending objective targets and delivering on climate change aspiration.”
A spokesperson for Ambition North Wales said: “The North Wales Growth Deal is a collection of 20 projects, delivered over a 15-year period by Ambition North Wales. We report on how our projects are progressing on a quarterly basis. The scale and nature of the projects within the Growth Deal means challenges, risk and issues over the 15-year period. Affordability is a risk at present due to increased costs in the construction sector, and we are working with our stakeholders to review and adapt our projects to reflect this evolving situation. All projects are subject to robust assurance and business planning processes, which helps limit risk to ensure we deliver the best value for North Wales.”