On 19 June this year I provided an update to Members informing them that Future Valleys (FCC, Roadbridge, Meridiam, Alun Griffiths (Contractors) and Atkins) had been appointed as Preferred Bidder for the A465 HOV Dualling Dowlais to Hirwaun scheme.
I am now delighted to confirm that final contract has been awarded to Future Valleys (FV) to deliver the scheme. Site clearance will start almost immediately with construction due to start in earnest in spring 2021. Construction is due to be completed by mid-2025.
The project is the first to be delivered using Welsh Government’s revenue-funded Mutual Investment Model where Future Valleys, acting as our Private Sector Partner, will design, build, finance and operate the scheme. Under the Mutual Investment Model, the public sector, through the Development Bank for Wales, is taking an equity stake in Future Valleys, providing transparency at Board level and an opportunity for a share in any returns generated by the scheme.
The Future Valleys consortium consists of large international construction companies, alongside established financial investors all with an interest in investing in Wales. The consortium includes key Welsh contractors and design teams with knowledge of the area and the local supply chain.
The A465 is a key part of the strategic road network and is of local, national and international importance. The 18km length between Dowlais Top, Merthyr Tydfil and Hirwaun (Sections 5 & 6) are the westernmost sections of the dualling programme and currently remain a single three-lane carriageway with at-grade junctions that restrict traffic flow and affect reliability. The road has a poor safety record, limited opportunities for overtaking and poor facilities for active travel.
This scheme will complete the dualling of the A465, a long-term commitment of the Welsh Government, and ensure the full range of benefits are realised for the region. It will complete a continuous, high standard alternative route to the M4 and will improve the critical northern cross-Valley Link for the South Wales Metro providing reliable access into the Metro hubs, contributing to the promotion of a modal shift. The scheme will improve accessibility to jobs and key public services and facilities for active travel in the region.
In addition to the transport benefits, a range of Community Benefits will also be delivered through the scheme to support the objectives of the Valleys Task Force, including contractual targets for training and jobs for local people and opportunities for the local supply chain. An estimated £400m of project spend will be in Wales, with £170m within the Heads of the Valleys region, generating a projected £675m value for the wider Welsh economy The members of the FV consortium have a proven track record of delivering against Community Benefits commitments.
The level of investment generated by this scheme will be of critical importance as the Welsh economy strives to recover from the challenges of the ongoing Covid 19 pandemic, especially in an area such as the Heads of Valleys which has been particularly badly impacted. Having a large infrastructure project starting within the region has the real potential to accelerate the regional recovery.
Delivering the scheme using the Mutual Investment Model (MIM) provides the best opportunity to complete the scheme as quickly as possible. Under the MIM, Welsh Government will not start making Annual Service Payments until the services are operational. This incentivises the contractor to deliver to programme on time and to budget. The structure of the MIM will also ensure that the full range of community and economic benefits are delivered by the scheme before Welsh Government begins making Annual Service Payments, allowing budgets to be prioritised elsewhere.
The MIM includes strict requirements around managing impacts during construction such as noise, dust and vibration. The contract also includes specific restrictions on the management of traffic while the road is being built, both in the number of closures of the A465 and the use of local roads, with financial penalties for non-compliance.