Proposals for new communities in the South-east, and the redevelopment of existing urban sites will require large-scale investment in site infrastructure. In this month’s cost model, we examine the cost and value drivers associated with infrastructure and site amenities
<B><font size=”+2”>Introduction</font></b> Site infrastructure covers works on roads, pathways, services distribution, landscaping and boundaries. Although much of the scope of infrastructure works is focused on civil engineering, the impact is felt by the user in the site layout, landscape, security and overall quality of the environment.
At an early stage, infrastructure works can be a big source of risk as a result of uncertainty over the scale of works, the cost implications of project phasing options, and the complexities associated with works to statutory services.
Current national planning strategies, which focus development within existing urban areas and in designated new communities, will create significant demand to extend or reinforce existing site infrastructure. The scale and intensity of these developments creates significant challenges relating to:
- <B>Transport</b> Integration of the site with public transport, implementation of lower parking densities, measures to reduce private car usage and the impact of congestion around the site must all be taken into account.
- <B>Phasing</b> The need to establish transport and services infrastructure must be balanced against the cash flow implications of investment ahead of revenue-generation. Works which can be done in phases include on-site services, roads and landscaping: works required at the outset include decontamination, main site connections, capacity reinforcement, services diversions, heavy civils works and basic site security.
- <B>Reinforcement of services infrastructure</b> In most urban centres, greenfield sites or high-density developments, there is rarely sufficient capacity to accommodate increased demand. The need for reinforcement is most acute in relation to electrical supply, as constraints in drainage and water supply capacity can be addressed by on-site measures to reduce demand.
The principal issues associated with services reinforcement are:
- The disproportionate costs associated with providing additional capacity, driven largely by the distance of the site from the supply
- The effect of high infrastructure costs on smaller sites which need higher densities to provide a return
- The effects on programme and cash flow
- The need to engage with statutory bodies and difficulties associated with securing commitment at an early stage.
- <B>Minimisation of environmental impacts</b> Issues include the off-site disposal of spoil, recycling existing building materials and the minimisation of the effect on aquifer and storm drain systems. Mitigating impacts on flora and fauna can also be an important issue, potentially involving displacement or the phasing of the works to avoid disturbance.
- <B><font size=”+2”>Creating the setting for development </font></b>For business parks and other commercial developments, the quality of the working environment and communications infrastructure are important selling points.
- The growing trend towards higher density urban brownfield sites is leading to masterplans that focus on the relationship between buildings, rather than treating individual plots in isolation.
- The following are key issues for consideration in creating modern development settings:
- <B>The size of the development</b> Larger buildings and plots simplify services distribution and road layouts, but require denser parking solutions to maintain acceptable travel distances to the building.
- <B>The quality of the environment</b> including:
- The scope for interaction between occupiers, for instance providing public space and grouping buildings to encourage movement and activity
- The extent and quality of connections with surrounding areas
- Pedestrian circulation through the site, facilitated by signposting, management and connections to transport links
- The strength of site identity, achieved by the coherent use of surface materials, textures, features and furniture.
- <B>The separation of road layouts and the public domain</b> Depending on the size and layout of the site, a peripheral road and services distribution route may be preferable to a central boulevard, although this may increase the overall extent of the road network.
- <B>Services infrastructure</b> The major considerations for occupiers are power supply and communications. Security and diversity of power supply are provided by multiple links to the primary network, and ring-main distribution with provision for dual feeds on each plot. Given the growth in telecommunications traffic and diversity of providers, access to a range of network carriers is a competitive advantage for a development. In practice, this requires the construction of a dense network of communication ducts, with access to between 40 and 60 ducts on each plot.
- <B>Services distribution</b> The two main strategies for distributing services such as power and telecommunications are:
- Buried services, a relatively low-cost option that potentially involves significant disruption when modifications are required. Placing services underground also runs the long-term risk of fractures to ducts and damage to cables.
- Combined services tunnels, an alternative on densely developed sites that provides easy access and capacity for a large number of providers. Disadvantages include cost, programme and phasing and problems associated with routing services like drainage around the tunnel.
- <B>Security</b> This needs to be addressed on phased construction works and stand-alone developments where the personal safety of employees is a particular concern. Perimeter security, safe public access, public space and car parks, and roadway barriers and controls to manage access to and use of the site and prevent ram raids all need to be considered.
- <B>Long-term maintenance</b> Issues include the upkeep of landscaping and managing alteration works by utilities. Parkland landscape and hard surfaces with low maintenance needs are generally preferred to more intensive planting. Using semi-mature trees and shrubs also reduces the risk of damage by vandalism. Providing extensive duct networks for telecommunication firms from the outset will help to manage the impact of installation works. In addition, implementing a telecoms management plan, aimed at managing duct capacity and removing redundant cable, will control the need for additional duct capacity in the long term.
- <B><font size=”+2”>Cost and value drivers for infrastructure </font></b> Large-scale infrastructure works are a significant cost to developers. On some sites, phased solutions are the key to opening a plot; on others, the site density will need to be increased or public sector support secured to offset high infrastructure costs. The cost drivers of are therefore complex and the added value delivered can be difficult to quantify. Because of the range of variables affecting costs, it is important to establish the scope of works early. The principal drivers for infrastructure are: <font size=”+2”>Cost drivers</font> <B>Site location</b>
<B>Physical extent of the requirement</b>
- Size of the site and of the plots
- Services capacity required
- Density of development and of road and pathway networks
- Car parking density
- Requirements for ancillary buildings
- Degree of completion of development plots
- Overall requirements for export of site materials or importation of fill
- Location of connections to mains services
- Extent of section 106 and 278 works
- Phasing of development and growth in capacity requirements
<B>Available capacity </b>
- Capacity of existing infrastructure
- Presence and timing of demand for available capacity, and the potential expense of reserving existing capacity
- Costs of off-site reinforcement (electrical mains, drainage and water supply)
- Costs of on-site storm water attenuation to match existing drainage capacity
- Costs of water systems such as rainwater harvesting and greywater recycling to match demand to existing capacity
- The minimum scope of work for the development to achieve “critical mass”
- Finance costs and overall duration
- Timing of site assembly, including compulsory purchase orders
- Temporary works, including temporary connections and formation of below ground service distribution zones ahead of the completion of levelling and groundworks
- Timing of groundworks, which affects ability to reuse excavated material as fill
<B>Site conditions and constraints </b>
- Contamination and extent of remediation
- Extent of demolition works
- Timing of the release of the site
- Existing ground conditions and levels
- Location of existing services
- Requirements for services diversions
- Need for continuing site access by utilities
- Archaeological and environmental investigation
- Extent of the ring-main and frequency of switches/valve sets
- Need for uninterruptible power supplies
- Diverse routing to eliminate risk of single point of failure
<B>Long-term flexibility </b>
- Additional capacity for increase in demand, such as telecommunications ducts
- Density of communications infrastructure
- Ease of access to services
- Mix of hard and soft landscaping
- Maturity of planting
- Specification of materials
- Extent and specification of features and street furniture
- Extent of security requirements.
<font size=”+2”>Value drivers</font> <B>Site improvement </b>
- Provision of services capacity to achieve maximum development value
- Provision of road and landscape amenities
<B>Creation of place </b>
- Impact of initial phases in creating critical mass, producing environments and services to attract and retain early occupiers
- Long-term efficient operation of services
- Achieving optimum densities despite constrained services capacity
- Optimising scope of works to enable initial development at minimum initial cost
- Early completion of revenue-generating development
- Minimisation of disruption associated with subsequent phases
<B>Resilience of diversity of supply </b>
- Purpose-designed networks with demonstrable diverse feeds
- Economic solutions to reinforce supply and offer diverse feeds to occupiers
- Planned distribution and duct networks to provide adequate future capacity for the full range of telecommunications providers
<B>Local environmental improvement </b>
- Availability of amenities, possibly including improved public transport links
- Developing underused brownfield sites
- Focus for further economic growth.
<B><font size=”+2”>Procurement</font></b> Although the scope of most infrastructure works is relatively simple, co-ordinating a range of stakeholders and utilities contractors requires experience and management resources. Most works can be undertaken by an employer’s contractor, but non-contestable works for phone, gas and electricity firms will be undertaken by the utilities’ contractors to their own cost and timescales, introducing uncertainty to the budget and programme. Infrastructure works can be procured using traditional lump sum contracts. However there are benefits to involving a contractor early on in phasing, managing services diversions or procuring long lead-in equipment. This may justify appointing on a two-stage or management fee basis.
<B><font size=”+2”>Procurement of electrical supply reinforcement</font></b> One area that requires specialist input is negotiating contracts for electricity supply reinforcement. Because of capacity limits, developers regularly need to procure off-site cable and switchgear, in the form of local high voltage distribution at 11 kV or, on larger schemes, installing a new substation at 132 kV. These works involve considerable cost and disruption. A substation on a very large development typically costs £4-6m.
There are three broad strategies to procuring electrical supply works:
- <B>Network operator undertakes works</b> Benefits include continuity of work, but downside is no price competition and no ability to enforce the project programme
- <B>Specialist undertakes contestable works</b> Offers price competition and greater control over programme, but disadvantages include the work being split into two packages and the need to involve the network operator in design and inspection in advance of adoption
- <B>Specialist/client undertakes contestable works</b> The installed system is funded, maintained and managed by the client and a specialist service provider, which jointly retain revenue from the transmission of electricity. Advantages include reducing the cost associated with adoption and generating a revenue stream. Disadvantages include the scale of initial investment, ongoing management commitment and risk related to long-term income stream.
<B><font size=”+2”>Indicative rates for paving and landscape</font></b> The range of variables affecting paving and landscape means it is difficult to define a model scheme. Variables include site conditions, the extent of enabling works and services diversions, and product specification. In particular, costs of street furniture vary widely, reflecting the range of available products.
Rather than publish a generic scheme, the model features indicative rates which cover a range of work encountered on infrastructure projects. Costs are at fourth quarter 2003 rates, based on a South-east location. Rates exclude preliminaries, professional fees and VAT. Costs of labour-intensive work, such as drainage, can be adjusted using the location factors. Care should be taken when applying the factors to items where the materials constitute a high proportion of the value.