Depreciated Replacement Cost Valuation

Description

Transport for Wales (TfW) wishes to procure the services of an advisor to provide evidence to support the valuation assessment of the Core Valleys Lines rail network for financial reporting purposes for the financial year ending 31 March 2021 and future periods. In accordance with Regulation 40 of the Public Contracts regulations 2015 TFW will be holding buyer pre-market engagement events sessions for this project. Due to the current situation with COVID-19 these meetings will be held virtually using TEAMS, week commencing 14th September 2020 (subject to change). In order to be allocated a session you are required to respond no later than 12 noon on 9th September 2020 via email to procurement@tfw.wales, stating your experience and/or capability in delivering this type of service. Non response to this Prior Information Notice by any potential supplier does not preclude them from participating in any related forthcoming tender in the future. Transport for Wales (TfW) are looking for experienced consultants to undertake valuation of assets and provide information on the Depreciated Replacement Costs across our Core Valley Lines (CVL) in South Wales. The CVL rail network is made up of the Aberdare, Coryton, Merthyr Tydfil, Rhymney and Treherbert lines and includes all stations, track and related rail infrastructure such as earthworks, bridges and signals within this network. TfW acquired these lines from Network Rail on 28 March 2020. Under Public Sector accounting rules, the Modern Equivalent unit costs of replacing the CVL rail infrastructure need to be assessed. This information will be used in conjunction with the Useful Economic Life and Remaining Useful Life of the CVL assets to arrive at the Depreciated Replacement Cost (DRC) of the asset. The DRC valuation will be reported in the financial statements of Transport for Wales and will be used for consolidation within the Welsh Government group financial statements. The appointed advisor is expected to provide input in the following areas: 1 – Developing an excel based valuation model, replicating the 31 March 2020 opening position per the Network Rail valuation model and capable of being updated for factors including unit costs, unit quantities, asset lives and indexation; 2 - Developing asset unit costs based on the asset categories in the existing DRC model; 3 – Quantifying risk and other uplifts (e.g. ‘greenfield adjustments’) to be applied to the unit costs; 4 – Assisting TfW in quantifying the useful economic lives of the assets comprising the CVL taking into account both newly constructed and renewed assets; 5 – Assisting TfW in quantifying the remaining useful economic life of the assets comprising the CVL; and 6 – Undertaking an annual adjustment to the asset value (in those years where a full valuation is not undertaken) by advising TfW on appropriate indices to apply to pre existing costs and in confirming the values of in year asset additions and disposals.