Reaching Financial Close

Education 2010 PPP Project Reaches Financial Close

North Lanarkshire Council's ambitious Education 2010 PPP (Public Private Partnership) project has reached a significant milestone this week when the project achieved Financial Close, concluding the procurement stage of the project. The council's private sector partner is Transform Schools (North Lanarkshire) Limited.

In a first for the UK, our project is the first schools PPP deal to be traded on the UK stock exchange, the project being financed on a bond basis, and last week saw the successful launch of the bonds on capital markets securing a very favourable financial outcome for the council.

The Education 2010 PPP project now formally enters the construction stage to provide 24 brand new schools and facilities to pupils and communities throughout North Lanarkshire, although work has already started on the Education 2010 project, facilitated through an advanced works agreement between the council, Balfour Beatty Construction and Balfour Kilpatrick.

The advanced works has seen new build construction begun on the following seven projects:

• Coatbridge RC Secondary and Community Education Centre – piling and foundations complete, structural steel and roofing works has commenced;
• Airdrie Academy - foundations are 50% complete, structural steelwork started;
• Glengowan and St Mary's Primary joint campus, Caldercruix including early education provision – steelworks completed, roofing 90% complete, external walling commenced and internal works are proceeding;
• St Timothy's Primary, Coatbridge which includes for a Community Education base, early education provision and the phonological unit – foundations complete and structural steel commenced;
• Viewpark RC Primary includes for a Community Education base and Early Years Centre - foundations and steelwork complete, roofing in progress;
• Chapelhall and St Aloysius Primary joint campus including early education provision- foundations and retaining walls approaching completion, structural steel commencing in next 3 weeks;
• Glenboig and Our Lady & St Joseph Primary joint campus including early education provision - site demolitions 95% complete and groundworks due to start in next 3 weeks.

Council Leader, Councillor Jim McCabe, said, "I am pleased to report that after a lot of hard work, behind the scenes, by the council and Transform Schools, we are a step closer to providing brand new state of the art schools and community facilities for the people of North Lanarkshire."

"The Scottish Executive is providing financial support to the project equivalent to £10.74 million per annum for the duration of the 30 year project. The council will provide the balance of funding, originally estimated at £3.5 million per annum, but thanks to the very favourable bond launch, it is currently estimated that a saving of between £0.5m -£0.8m could be made on the annual unitary charge.

"As part of the overall package, Balfour Beatty and its co-sponsor Innisfree are investing £15.7 million of equity and subordinated debt into the project. By agreement with the council, the concession company will be named Transform Schools (North Lanarkshire) Ltd.

Councillor McCabe added, "Although this is great news for all the people who will be using the facilities in these new schools, we will continue to use our own capital funds and any other funding made available to progress the improvement to whole school estate in North Lanarkshire."

Convener of the Education Committee, Councillor Charles Gray, said, "The Education 2010 project offers us the opportunity to provide new accommodation that is safe, sustainable, economical and fit for purpose. It will enable the council and Transform Schools to offer the very best education for our young people and the very best facilities for all our communities."

He added, "Early Years provision, community use and sports and leisure facilities will also form part of these developments, creating high quality learning facilities for all ages that are fit for the 21^st Century."

Commenting on today's announcement, Balfour Beatty Chief Executive, Ian Tyler, said, "We are delighted to be working in partnership with North Lanarkshire Council in realising its objective to provide the very best education opportunities for the area.

"Balfour Beatty will provide the council with a greatly enhanced education environment through the design, construction and servicing of new, modern, state-of-the-art buildings and facilities. We intend to bring the same level of professionalism and service as we are providing through our public-private partnerships in Stoke and Rotherham schools."

Assistant Chief Executive, Russell Ellerby, added, "Both the council and Transform Schools are committed to improving education for all our school communities and the Education 2010 project means that we can make a real difference for the pupils of today and tomorrow."

Ends

Date: Wednesday 8^th June 2005