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29th July 2019
Spending of £1.5 billion is expected to materialise for the Welsh education construction sector through a new public private delivery model being set up by the Welsh government to deliver a major new programme of school and college building.
The proposals involve a private sector partner entering into a joint venture with the Development Bank of Wales.
The two parties will form a new Welsh Education Partnership Company to provide project development and delivery, supply chain assembly and management on new schools and colleges (Glenigan Project ID: 1924538).
Three bidders will be shortlisted for the agreement, which will run for the next decade. Unlike previous public private partnership deals, the Welsh model will give the public sector a 20% equity stake. Cleaning, catering and low value maintenance are also excluded from the deal.
A bidders day was held on July 18 in Cardiff but interested bidders have until September 9 to express an interest in the proposals.
Glenigan’s construction market research suggests the programme could produce a major upswing in Welsh education construction work with some approved projects potentially already in place.
Project starts falter
Welsh education construction projects starting on site this year include an £8.1 million primary school being built at Ysgol y Garnedd in Gwynedd (Project ID: 18321858) and a £7 million school at Ysgol y Graig in Mid Glamorgan (Glenigan Project ID: 18325167).
A £19.1 million comprehensive school is due to start on site early next year in Neath (Project ID: 18366242), but with a new model being put in place a hiatus has emerged in new work.
The underlying value of education construction project starts in Wales fell 24% in the first half of 2019 according to Glenigan’s construction data. There was an even bigger fall of 36% in 2018, but this area has previously been a strong workstream in the past.
The underlying value of education work starting on site in both 2016 and 2017 topped more than £400 million and there are indications that a revival could take place.
In the pipeline
Other projects have a contractor on board but are still awaiting planning permission, such as a £10 million primary schools project in Aberdare (Glenigan Project ID: 16385287).
Education work given planning permission dropped off last year with the value of projects slumping 78%.
This has depressed the short-term pipeline of work, but Glenigan’s construction research shows that in 2017 there was a 28% surge in education work as £367 million-worth of work secured planning permission.
Overall, between the start of 2015 and Q2 2919, £1 billion-worth of education work was given detailed planning permission in Wales.
Some of this work is in the higher education sector, such as a £200 million academic and accommodation block at Swansea University (Glenigan Project ID: 17427409).
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