MAJOR Aberdeen City Council capital projects are to be reviewed and reprofiled due to the risk of potential delays due to supply chain issues in the construction industry.
The decision was unanimously agreed by the local authority, with members of its city growth and resources committee agreeing that capital projects should be reviewed to have potential built-in delays along with other ‘financially prudent’ options.
It also agreed that there be a report taken to the urgent business committee on any proposed reprofile of capital projects where supply chain volatility may lead to additional cost or revised timelines – out-with the current project budget and budgeted contingency provisions.
The committee said global external factors are having a negative impact on capital and revenue costs, including the delivery of capital programmes and projects in terms of their budget and delivery timelines.
The factors including ongoing market impacts from Covid, Brexit, current inflation rates, and the invasion of of Ukraine. The council said that the war is affecting access to supply markets in Russia, Ukraine, and surrounding area, and has led to a cycle of market and price volatility and shortages across many commodities. This in turn is having a negative impact on the delivery of capital projects, budgets, and on revenue expenditure in the delivery of services and procurement processes carried out for affected commodities.
In light of these external factors and their associated cost and time implications, senior staff at the council will review the approved general fund and housing capital programmes/projects in terms of timeline delivery and financial viability and to consider the impact on service delivery as a result of revised delivery timelines.
A full report on plans is to be produced and presented at a full council meeting in August, with it set to detail how the local authority can help to mitigate the global external factors on citizens and businesses.
Aberdeen City Council city growth and resources convener, councillor Alex McLellan, said, “During these unprecedented times, it is only right that we look at how to protect our council from huge rises in costs and other external risks. This should help to ensure we are in a strong position to deliver the services people will rely on in the coming months.
“It is welcome that there has been agreement on this, and I hope councillors can work together to steer us through these uncertain times.”
Aberdeen City Council, co-leader, councillor Ian Yuill added, “Potentially delaying projects is not something we would undertake lightly so we welcome the report which will investigate options for what we can do to mitigate the current circumstances.”