Foresterhill Energy Centre – Full Business Case
Introduction
1. The detailed planning of the new Energy Centre at Foresterhill has been completed. This follows the approval of the outline business case (OBC) for the project by the NHS Grampian Board in December 2008. This approval permitted the appointment of the principal supply chain partner (PSCP) and Laing O’Rourke joined the team as project partners in January 2009.
Aim
2. This paper submits the Full Business Case (FBC) to the NHS Grampian Board for formal approval.
Discussion
3. The FBC together with an executive summary is attached for the attention of the Board.
4. Following the detailed development of the proposals involving the PCSCP a further funding contingency of £800,000 was made available in the capital plan by the Asset Investment Group (AIG) in May 2009. This contingency was required to deal with the anticipated exchange rate changes and NHS Grampian project costs. It was also agreed that £1.2m from the Facilities infrastructure allocation should be included to permit the completion of necessary site infrastructure works already in the Facilities work programme but which is appropriate to do as part of the Energy Centre project.
5. These changes were discussed with the Health Directorate and the revised OBC was formally approved by the Scottish Government in July 2009.
6. The FBC submitted to the Board is consistent with the revised OBC and the amendments approved by the AIG in May 2009.
7. The key points of the FBC proposals are summarised below:
· The new Energy Centre will provide the heat and electricity capacity for all of Foresterhill’s predicted requirements in the future
· The new Centre will be completed on time to support the energy needs of the new Emergency Care Centre i.e. construction will commence in September 2009 for completion in early 2011, providing a whole year of operation before the completion of the Emergency Care Centre
· There will be a 17% reduction in carbon emissions i.e. 4,525 tonnes per annum
· The facility will achieve a BREEAM “excellent” rating
· There will be a 37% reduction in revenue costs compared with current revenue costs i.e. £2.3m
· Total capital cost is £12.49m. This is the agreed target cost with the PSCP under the terms of the Frameworks Scotland arrangements
· Funding provision to meet the total capital cost has been made in the NHS Grampian capital plan, consistent with the AIG agreement on the revised business case issues of May 2009
Key Risks
8. The key risks are set out in appendix C of the FBC. The risks have been valued in accordance with the Frameworks Scotland contact arrangements and an appropriate level of contingency has been included in the target cost.
Recommendations
9. The FBC as submitted is consistent with AIG and Board approvals. The Board is asked to approve the FBC to allow formal submission to the Scottish Government Health Directorate Capital Investment Group.
Graeme Smith
Head of Service Development
Gary Mortimer
Estates Manager
28 July 2009