Lewisham

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13.4.06 Lewisham PFI deal faces further delays  As if the delays to date (see below) were not enough The Contract Journal today reported: 

"The £70m Downham Lifestyles PFI leisure project for Lewisham Council has hit further delays this month, despite pointed criticism of the preferred bidder’s performance last month by Lewisham’s mayor Steve Bullock. At a council meeting in March, the mayor accused the preferred bidder, Linteum/Leisure Connection, of slowing proceedings while it focused on its contract with Brent Council for the £16m Willesden Leisure Centre, another scheme which has suffered delays.

A final deadline of 11 March was given for signing the Lewisham contract, which is now running more than a year behind schedule. However, CJ has learnt that the latest deadline for financial close has been breached. At the meeting, the mayor said: “Despite every effort having been made by officers, negotiations with the preferred bidder, Linteum/Leisure Connection, have slowed due to its concentration on completing another leisure PFI project which, for various reasons, has taken much longer to finalise than anticipated.”

The mayor said the consortium’s resources had been stretched by using the same project manager for both contracts. “With one project manager for the consortium handling both projects this has led to a pinchpoint in negotiations with the consortium. We have made clear our dissatisfaction on how the consortium has handled this.”

However, despite the mayor’s broadside and the setting of the 11 March deadline, a council spokeswoman confirmed the deal has yet to be signed. “There have been some delays in the project but we have made progress with our partners and are now finalising the details to move to the next stage,” she added.

A Leisure Connection spokeswoman said: “All parties involved are working as hard as possible to get to financial close.” Leisure Connection, in consortium with Linteum and NIB Capital Bank NV, won the 30-year contract in July 2003. The contract is a “joined up” PFI, linking services between the leisure, library and health sectors.

The facilities, including some housing, will be located at two sites in the Downham area. Alfred McAlpine Special Projects has been subcontracted to do the design and construction and Wates Homes assigned to develop the residential housing estate." http://www.contractjournal.com/Articles/2005/04/13/46039/Lewisham+PFI+deal+faces+further+delays+.html 

Independent Review Of Downham Contract

As you will see further below, in September the Mayor of Lewisham was  peeved at the delays in the Private Finance Initiative deal for Downham Lifestyles. Penny Badcoe, an independent consultant with expertise in PFI, was asked by Lewisham Council to consider the procurement process, investigate reasons for delay, and to identify lessons learned." She dated her 34 page report "January 2006". 

Ms Badcoe reported that the project took "just over four four years in procurement from the approval of the Outline Business case". She notes this is not unusual in PFI deals and particularly in a complex and innovative one. One issue was that a Dutch bank dropped out from the scheme and  replacement finance had to be found. While the council is not seen to be without fault there are some telling paragraphs concerning the Linteum / Leisure Connection Consortium. 

The consortium "...were negotiating two contracts concurrently, and from the summer of 2004 onwards they prioritised work on the Brent deal up until it closed during the following March. This was discussed extensively between LBL (Lewisham) and Linteum at the time, and indeed it was understood that Linteum was open about their strategy. However, the timing and certainty of communication on this point is somewhat unclear between the parties... The consortium sought to reassure LBL staff and advisers that this approach would make the eventual closure of the LBL deal easier. This was suggested on the basis that the Brent scheme as much simpler, involving only leisure provision and a single client, and that issues resolved in Brent would be applicable to the LBL project. In the event , this did not happen because the LBL project was different and the Brent approach was not considered by LBL and its advisers to be applicable. It might even be argued that attempts to apply Brent caused further delay in the final stages of the LBL negotiations. Once again there was lack of clarity about communication... Although it is difficult to be precise, and impossible to disaggregate the impact of individual factors on the overall process, it is likely that the project would have been delivered several months earlier, if there had been no change of bank and no Brent deal running concurrently ." (p10)

The concluding paragraph makes clear that the history of the procurement  is a threat to the completion of the project. "It is vital that any negative feelings and past difficulties are now set aside in order that all parties may work effectively together on the construction phase... This joint  working should include liaison with the press to ensure the best possible publicity for the launch of Downham Lifestyles. Although I remain concerned about ongoing project management as the build phase progresses, I do believe that there is a collective will to do so."  

Time will tell and whatever happens the citizens of Lewisham will pay. Thanks to the two people who anonymously posted LCW the report. PB

Press report on the above story appearing a week after LCW account.

News  Shopper 7.2.06   http://www.newsshopper.co.uk/news/lewgreennews/display.var.684305.0.delay_blamed_on_communication.php    Reproduced in Full

POOR communication has led to delays in building a £16m leisure centre, a report claims.     By Glenn Ebrey

In September Lewisham Council confirmed the Downham Lifestyles Centre will open in February next year nearly three years later than originally planned.
Now an independent report has blamed the delay on a "lack of clarity in communication" between the council and its chosen Private Finance Initiative (PFI) bidder.

The centre will have leisure facilities including a 25m swimming pool and gym, a library, a creche and two GP surgeries. It is being funded by a joint PFI between the council and Leisure Connection Ltd.

Delays in agreeing the contract to run the centre mean it will not open until next year, even though it was hoped to build it by summer 2004.
Lewisham Mayor Steve Bullock ordered the report after admitting he was "disturbed" the PFI contract took nearly two years to sign.

Report author Penny Badcoe says the delay was mainly down to communication problems between Leisure Connection Ltd and council bosses.
She says: "This report highlights the need for clear and formalised communication throughout the procurement process. Communication between officers and members was not always as effective as it might have been."

The report also criticises Leisure Connection Ltd for agreeing a PFI contract in Brent, north London, three months after being selected to oversee the Downham project. It says Leisure Connection Ltd was over ambitious and criticises it for prioritising work on the Brent project.

Downham ward councillor Mark Morris says the report leaves "many questions to be answered. "He added: "It is all very well saying PFI schemes are complicated but if they knew this, they should not have said the centre would open in 2004. People's hopes were cruelly raised, only to be dashed."

Plans for the cabinet to discuss the report at a meeting were scrapped last week. A council spokesman says the report was withdrawn so the council can clarify' some of the issues it raises.

20.9.05  From This is Local London http://www.thisislocallondon.co.uk/news/headlines/display.var.631888.0.mayor_demands_answers_after_contract_delay.php 

Mayor demands answers after contract delay

LEWISHAM Mayor Steve Bullock has asked officers to review the contractual process behind the Downham Lifestyles Project. Mr Bullock last week admitted he is "disturbed" the contract for the £16m leisure development took nearly two years to sign. He has now asked council chief executive Barry Quirk to lead an investigation into what went wrong.

Speaking at a full council meeting, Mr Bullock said he wants to avoid a repeat of the delays which affected Downham when it comes to future developments.
He said: "I am disturbed at how long the contract has taken to get to completion. "I want to know what went wrong with the Downham Scheme so we can learn from it."

Lewisham Council and private investors, including Leisure Connection Ltd, agreed the contract for running the centre last week. The council has now confirmed building work will be completed in February 2007. The leisure facilities and library will open in March 2007, with health services including two GP surgeries coming a month later.

Mayor Bullock's now accepts something went wrong whereas in March (see below) he was adamant that "every effort" had been made by officers. Or is he accepting some of the problems stemmed from the councillors most involved in ignoring  residents?  PB 11.10.05

Lewisham council is £4,576,000 overspent before the building of a new centre has started. For this the public will end up with a pool 25% shorter than the existing pool, no extra lanes and a smaller learner pool. This is what the Mayor has described a "flagship, state of the art swimming centre".  PB 6.9.05

From News Shopper 25.5.05  http://www.newsshopper.co.uk/news/lewgreennews/display.var.599600.0.still_no_start_date_for_leisure_centre.php 

Still no start date for leisure centre  by Paul Revel    (reproduced in full)

THE COUNCIL has admitted it cannot impose fines against a firm, further delaying a long-awaited leisure centre. At a full council meeting last week, Councillor Mark Morris demanded to know why a start date for the Downham Lifestyles Project leisure centre has still not been set despite already being more than two years late. The project, which includes a swimming pool and a library, was announced in the borough's Labour Party manifesto which claimed it would be up and running by 2004.

But unless negotiations are wrapped up in the next few days, it is unlikely the project will be completed before 2007 almost three years late. Cllr Morris asked the question two months after contractors Leisure Connection (LC) missed a target date for finally signing contracts on March 11.

Lewisham mayor Councillor Steve Bullock admitted the delays were caused by Private Finance Initiative (PFI) contractors LC making slow progress. He said LC has over-reached itself by bidding for another PFI project, instead of focusing on its commitments at Downham. Cllr Bullock also said no financial penalties can be imposed against LC while negotiations are continuing.

The Downham Lifestyles Project, to be managed by LC for 30 years at a cost to the council of £70m, also includes a fitness studio, a gymnasium, a community room, a creche, a music and drama studio and two GP surgeries.

Councillor Morris said: "Something has gone wrong and it's bitterly disappointing. While this drags on, thousands of people are missing out on these facilities." He says the old pool, built in 1937, was very popular before it closed in 1995 and 101,000 people passed through its turnstiles in 1994.

Cllr Morris says the leisure facilities are vital for residents of all ages. He said: "I am not going to give up. Lessons have to learned and somebody needs to be held responsible.

A joint statement from Leisure Connection and Lewisham Council said all parties were doing "everything possible" to bring the negotiations to a conclusion. The council is attempting to finalise the deal as soon as possible.

From ContractJournal.com http://www.contractjournal.com/home/Default.asp?type=2&liArticleID=46039&liSectionID=1&liDF=1   13 Apr 2005

Lewisham PFI deal faces further delays (reproduced in full)

The £70m Downham Lifestyles PFI leisure project for Lewisham Council has hit further delays this month, despite pointed criticism of the preferred bidder’s performance last month by Lewisham’s mayor Steve Bullock.

At a council meeting in March, the mayor accused the preferred bidder, Linteum/Leisure Connection, of slowing proceedings while it focused on its contract with Brent Council for the £16m Willesden Leisure Centre, another scheme which has suffered delays.

A final deadline of 11 March was given for signing the Lewisham contract, which is now running more than a year behind schedule. However, CJ has learnt that the latest deadline for financial close has been breached. 

At the meeting, the mayor said: “Despite every effort having been made by officers, negotiations with the preferred bidder, Linteum/Leisure Connection, have slowed due to its concentration on completing another leisure PFI project which, for various reasons, has taken much longer to finalise than anticipated.”

The mayor said the consortium’s resources had been stretched by using the same project manager for both contracts. 

“With one project manager for the consortium handling both projects this has led to a pinchpoint in negotiations with the consortium. We have made clear our dissatisfaction on how the consortium has handled this.”

However, despite the mayor’s broadside and the setting of the 11 March deadline, a council spokeswoman confirmed the deal has yet to be signed. “There have been some delays in the project but we have made progress with our partners and are now finalising the details to move to the next stage,” she added.

A Leisure Connection spokeswoman said: “All parties involved are working as hard as possible to get to financial close.”

Leisure Connection, in consortium with Linteum and NIB Capital Bank NV, won the 30-year contract in July 2003. The contract is a “joined up” PFI, linking services between the leisure, library and health sectors.

The facilities, including some housing, will be located at two sites in the Downham area. 

Alfred McAlpine Special Pro-jects has been subcontracted to do the design and construction and Wates Homes assigned to develop the residential housing estate.

Question asked at Lewisham Council meeting on 2.3.05  http://snipurl.com/dp1h

Asked by Councillor Morris: 

Will the Mayor provide an update on the progress of the Downham Lifestyles Project and also provide estimated opening dates for each of the different services involved in the overall project. 

Reply:

Despite every effort having been made by officers, negotiations with the preferred bidder, Linteum / Leisure Connection, have slowed due to their concentration on completing another leisure PFI project which, for various reasons, has taken much longer to finalise than anticipated. The representatives of the preferred bidder consortium negotiating this other project are exactly the same as for the Lewisham project. This has resulted in the preferred bidder attempting to balance resources between the two projects. With one project manager for the consortium handling both projects this has led to a pinchpoint in negotiations with the consortium. We have made clear our dissatisfaction on how the consortium has handled this. The preferred bidder is now focussing its team on closing the Lewisham project and a target date of 11 March for completion of negotiations has been set for all parties to achieve. Working on the basis of a targeted financial close on 11 March the anticipated opening of the Park will be Autumn 2005 with the Lifestyles Centre a year later in late Summer 2006. More precise dates for the various opening dates will be confirmed as the final elements of the deal with the preferred bidder are finalised in the coming few weeks.

Efforts have been made on both sides not to delay the eventual opening of the Lifestyles Centre. Significant preliminary enabling works have therefore been approved with some site preparation works already completed e.g. ducting onto site, purchase of steel and other advance purchases of certain construction materials. The constructor has also been permitted to complete hard standings for the builders’ huts, a temporary road and parking space on the main site. Once the contract is awarded a meeting will be arranged for the public to hear from the contractor’s representatives about the building works programme.

I think the contract that took precedence is the one in Brent. PB