Defence Estates - DEFENCE MANAGEMENT JOURNAL, Issue 36
A MoDEL construction project
Project Ministry of Defence Estate London (MoDEL) comprises two discrete packages of work and forms one of the most exciting development and construction projects in London. It seeks to implement the MOD Estate Strategy by combining operations from a number of sites across Greater London. In parallel, the project will also free up some 100 hectares of predominantly brownfield land within the M25, which will potentially create the capacity for thousands of new homes for the capital.
Background
MoDEL represents a significant rationalisation of the MOD's estate, consolidating the facilities occupied by UK forces onto a modern, integrated, fit-for-purpose 'anchor site' at RAF Northolt.
This conclusion of the procurement phase of this exciting, complex and groundbreaking arrangement has only been possible through the dedication and hard work of a multi-disciplined team. The military customer represented at its core was complemented by specialist skills from across Government, which drew upon the commercial expertise of Partnerships UK and the MOD's Private Finance Unit, as well as the regeneration skills of English Partnerships and a team of external professional advisors.
MoDEL will initially invest around £180m in the re-development of RAF Northolt, delivering world class facilities and accommodation leading to improved operational outputs and a much improved quality of life for MOD personnel who live and work at the site.
MoDEL will also free up some 100 hectares of brownfield land through the disposal of surplus sites namely RAF Uxbridge, RAF Bentley Priory, Inglis Barracks in Mill Hill, Victoria House in Woolwich, RAF Eastcote and RAF West Ruislip, with the receipts from their sales being recycled to fund the development at RAF Northolt.
Delivering MoDEL
As the under Secretary of State, Derek Twigg MP commented at the ceremony celebrating the award of both the contracts in September 2006: "The primary legacy of this project will be to safeguard the future of RAF Northolt, the oldest operational RAF station in the country – older even than the RAF itself – and its proud history. Nearly £180m of investment in world class facilities and accommodation will pay dividends in terms of improved operational outputs and a much improved quality of life for our people – the Ministry of Defence's most important assets."
To deliver this vision, VSM Estates Ltd, a consortium of VINCI PLC and St Modwen Properties PLC, has been awarded the contract to redevelop RAF Northolt and dispose of surplus sites with Bovis Lend Lease awarded the smaller contract, which involves the construction and relocation of the British Forces Post Office (BFPO) operational facility to RAF Northolt from its current home at Inglis Barracks in Mill Hill.
Relocation of the BFPO
Defence Estates awarded the contract to relocate the BFPO Operational Facility to Bovis Lend Lease on 3rd July 2006. The current BFPO facility at Inglis Barracks, Mill Hill, is old and in poor condition and the new operational facility will provide a modern fit-for-purpose postal sorting facility at RAF Northolt, from where it can continue to provide an efficient and effective postal and courier service.
Work on the construction of the new BFPO facility is progressing well and is currently programmed to be in service by August 2007.
Delivering a new 'anchor' site at RAF Northolt
The MoDEL contract responsible for delivering the wider development at RAF Northolt and disposal of surplus sites was awarded to VSM Estates on 3rd August 2006. VSM Estates is a joint venture between international construction company VINCI PLC and developer and regeneration specialist St Modwen Properties PLC.
Whilst the contract to deliver BFPO's operational facility was procured as a traditional Stand Alone Prime Contract, the MoDEL contract was procured using Prime Plus Contracting (PPC) methodology. Prime Plus Contracting is an innovative means of funding a high profile property project and uses the value of the sites that are to be disposed of to fund construction costs.
VSM Estates are now responsible for securing cash flows for the project, project managing the construction requirements at RAF Northolt, the relocation of units to Northolt and the actual disposal of the surplus sites. This fully integrated approach has allowed for the optimum balance of risk between the development at RAF Northolt and the disposal of the vacated sites to be reached.
The potential of this methodology for application across other areas of Government has been widely recognised. Both HM Treasury and the Office of Government Commerce have commended Defence Estates on its innovation. Indeed, in approving Project MoDEL, Chief Secretary to the Treasury said: "The Prime Plus Contracting model offers a novel way to recycle the public sector's under-used asset base. I am encouraged to see that your Department is taking an innovative approach, which results in value for money for your Department. I feel that this model may also have its uses across the wider public sector."
Procurement in record time
Despite using the innovative Prime Plus Contracting procurement methodology, MoDEL was awarded in a record time of a little over two years. Indeed, all involved overcame the difficulties associated with procuring a contract of MoDEL's size and complexity to reach contract award within three days of the initially programmed completion date. This achievement speaks for itself and is testament to the two years of intense and exhaustive work undertaken by both the Project MoDEL Team and bidders.
Working in partnership to deliver wider Government objectives
The MoDEL Team has pioneered a joined-up Government approach to exploit the opportunities presented by the release of up to 100 hectares of brownfield land within the M25.
To explore and exploit this potential, the Project team has worked in collaboration with English Partnerships (the Government's regeneration agency) and engaged with the Greater London Authority, relevant local authorities, other Government departments and strategic governmental bodies to ensure every effort is made to maximise the potential that this unique opportunity presents for London.
Commenting on this opportunity the Mayor of London, Ken Livingstone, said: "As London faces increasing pressure to build thousands of new homes, the release of so much brownfield land on which they can be built is excellent news. Our population is expected to grow by 800,000 over the next decade, and building on our precious open spaces to meet this demand is not an option. So wherever we can recycle existing brownfield sites to accommodate more housing is good for Londoners and for the sustainable development of our city."
Now in the delivery phase, MoDEL has already made good progress with significant construction work underway at RAF Northolt and the sale of the first disposal site at RAF Eastcote expected to complete in March 2007. Working together, VSM Estates and the MoDEL team are turning the vision for RAF Northolt and the Greater London estate into reality.