Decision details

To meet the urgent plant replacement needs of the Construction Works Team, to dispose of an aging and increasingly unreliable Telehandler, and to purchase a nearly new, suitably specified replacement machine.  Additionally, to dispose of 2 excavators and to purchase a single nearly new replacement machine. In both cases, to increase resilience, reduce repairs and maintenance costs and overcome health and safety concerns and to meet the requirements of the service.

Replacement telehandler:

Prudentially borrow up to a maximum of £46,000 to cover the funding gap requirement. The borrowing cost will be a maximum of £17,863 per annum funded from recharges included in works income recharged to customers.

Replacement excavator:

There is no borrowing requirement for the excavator as it can be self-financed through the sale of existing machines.

These purchases will be formally reflected in a report to Cabinet in due course, but for reasons of urgency the decision is being made to progress replacement immediately.

The deterioration in the condition of the existing 10 year old Telehandler creates risks for safe operation, along with its lack of modern health and safety features and insufficient reach (to provide access to higher level buildings). This means that it is no longer fit for purpose or reliable.

The existing excavators are either increasingly subject to costly repairs and maintenance, or no longer suitable for the pipeline of work coming forward for CWT.

Whilst a report is scheduled for Cabinet and Audit & Governance committees to cover the wider fleet and plant requirements for the in-house repairs and maintenance, and constructions teams, it is necessary to progress the specific procurement of a Telehandler and Excavator more quickly due to concerns around the current machines’ condition and/or suitability. 

This decision will be taken under urgency powers provided in the constitution.

Option 1 – Temporary Hire

Temporary hire comes with increased costs as no capital gain is received from the expenditure.  The cost per month will also be greater than the borrowing repayment, even for a negotiated long-term hire. The specification of hire machines does not always meet the particular requirements of the service, thereby presenting a sub optional and expensive solution.

Option 2 –Purchase of nearly new machine - RECOMMENDED OPTION

Recommended option mitigating some of the risk of long lead times and cost of a new machine, ensuring a capital gain from expenditure and that the right machine can be procured for long term use. It is anticipated a purchased nearly new machines would have a life of approximately 9 years before needing replacement.