Agenda item

[Report of the  Director for Environment and Neighbourhoods. To be introduced by the Cabinet Member for Environment.]

To award a contract to a third party operator(s) ("Concessionaires) to install and manage rapid electric vehicle charging points in the borough under Transport for London's  (TfL's) Framework agreement call off contract.

The Cabinet Member for Environment introduced this report which sought Cabinet’s approval to award a contract to Chargemaster Plc, a Rapid Electric Vehicle Charging Point (EVCP) provider and operator, to install, manage and operate 5 rapid EVCP’s in the borough. The Cabinet Member informed this would be at no cost to the Council.

The Cabinet Member highlighted the damaging effect pollution had on residents and stated air quality must be improved within the borough. It was the Council’s policy to promote the uptake of electric vehicles through the implementation of charging infrastructure wherever possible. Therefore, it was important that an extensive electric vehicle charging network was installed in order to reduce the barriers to the uptake of electric vehicle.

Following questions from Cllr Carlin and Cllr Morris, the following was noted:

•           Officers acknowledged the cost of charging an electric car should be cheaper than if it were to be filled with gas or petrol to encourage the uptake of electric vehicles. However, the rapid EVCP was a high quality product, quick charge, and it had been intended to primarily be used for electric taxis and fleet vehicles and because of this there would be a slightly higher price. Other charging points were due to be installed in the borough under the blue point scheme which were for domestic car use and would be considerably cheaper.

•           All funds derived from the scheme would be ring-fenced to be reinvested into local transport infrastructure.

•           If, after 8 years, the Council did not wish to extend the contract, then the rapid EVCP’s would be returned to Chargemaster Plc. If the Council did seek to continue with the scheme then it could extend the contract for 2 years and then renegotiate with Chargemaster Plc 2 years after that.

•           Officers accepted there was a financial risk, as with all new technology and emerging markets. The Council would have preferred to bring such services in-house but the cost to install initially, manage and maintain the rapid EVCP’s was deemed to be too great a risk at this time.

Further to considering the exempt information at item 20,

RESOLVED

1.         To approve the award of a concession contract to Chargemaster Plc, pursuant to a call off from a framework agreement set up by Transport for London as allowed under CSO 7.01(b), for eight (8) years with an option for a two (2) year extension exercisable at the Council’s sole discretion, to carry out site enablement, installation, operation and maintenance of Rapid EVCPs and associated infrastructure at the following locations/sites in the borough:

•           Crouch Hall Road Car Park, N8 – 2 points

•           Summerland Gardens Car Park, N10 – 2 points

•           Gladstone Avenue, N22 – 1 point for black taxis only

2.         To note that under the proposed concession contract:

i.          All costs for the installation of the charging points will be covered externally by Transport for London (TfL) and Chargemaster Plc and all ongoing maintenance and operating costs of the charging points will be met by Chargemaster Plc over the contract term;

ii.         The charging points will be available for use on a pay as you go basis and the average charge for customers will be £0.22p (exl. VAT) per KW/h and may increase in the future in line with inflation; and

iii.        Chargemaster Plc will commit to paying to the Council:

•           a site charge in an amount, set out in paragraph 8.1.2 of the Exempt report, per annum per site for each of the three (3) sites payable on a quarterly basis and totalling the amount set out in the same paragraph of the Exempt report over the maximum ten (10) year contract term; and,

•           a percentage amount, set out in paragraph 8.1.4 of the Exempt report, of the turnover generated from the rapid charge points payable on an annual basis over the contract term; and

iv.        There will be no cost to the council.

3.         To note that the income the Council derives from the concession contract will be used to develop and deliver traffic and parking solutions in line with the Council’s various Transport and Air Quality strategies.

4.         To delegate to the Assistant Director of Environment and Neighbourhoods, after consultation with the Assistant Director of Corporate Governance, authority to approve the terms of all licences, leases and/or agreements as necessary to facilitate the apparatus being installed and maintained on the Council’s land and public highway pursuant to the Call-off contract.

Reasons for decision

The contract is being awarded to ensure that more charging points are installed to assist in establishing and expanding a network of EVCPs that will meet the demands of residents and businesses and encourage the uptake of electric vehicles in the borough.

Alternative options considered

Option 1 – Do nothing

Pursuing this option would not deliver the business and residential needs of the borough for rapid recharging. Additionally it would not enable the delivery of local air quality improvements from vehicles. Demand for a rapid recharging service will increase when the Ultra-Low Emission Zone (ULEZ) starts. This London charge (the ULEZ charge) on emitting vehicles will start in 2019 and require all emitting vehicles (not electric vehicles) to pay an annual charge to drive in Greater London - including Haringey. The rapid recharging networks will primarily deliver business needs (including taxis) as these vehicles need to be moving to deliver a return on investment for operators and therefore they will be willing to pay extra for rapid recharging. The lack of forward planning and no network would impact on the local businesses and residents in urgent need for a quick recharge, or could discourage them from investing in electric vehicles. This option is not recommended.

Option 2 – Council invests in its own infrastructure

To deliver a network of approx. 5 posts would require an upfront capital investment of at least £250,000 and over a period of 10 years is likely to require at least £300,000 to deliver ongoing management and replacement of equipment. While expected returns are envisaged to be attractive under a high uptake of electric vehicles scenario, with a low uptake the returns drop off considerably. It is noted that the size of the Haringey network (which is small) would make it expensive to manage, maintain and operate as it is only covering the Haringey area, when compared to a pan-London network. The risk around the Council successfully delivering this service would also be high as this is not an area where the Council has the resources to deliver and manage.

Alongside this to undertake the procurement exercise to deliver this equipment would require an EU procurement which would take at least 6 months to appoint a contractor and then an extra 6 months to design and install equipment. Again this option is not recommended.

Option 3 – Partnership investment arrangement

The Council could seek out an investment partner to operate in a joint venture (JV) for the network. But given the scale of investment and the number of points, it is unlikely to attract any serious investors. Soft market testing in this area has indicated that there is little appetite for a JV in this market place at a borough level given the small scale of this opportunity. This option is not recommended.