Appendix II - Perth Eco Innovation Park
Perth and Kinross Council · 4 March 2026
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Appendix II Perth & Kinross Council 4 March 2026 Perth Eco-Innovation Park at Perth West (Enabling Infrastructure) Background Paper Purpose This paper provides Members with a progress update on the Perth West development and the enabling infrastructure at the Perth Eco-Innovation Park (PEIP). The current approved General Fund Capital Budget 2024/25 – 2029/30 includes funding assumptions of £33m comprising £23m funded from developer contributions (£13m), ground lease income (£5m) and grant (£5m). Capital funding of £10m towards the costs of delivering the enabling works was approved in March 2023 (Report 23/73 refers), with approval to spend £3m of this given in January 2024 (Report 24/41 refers). This paper provides an update on the progress made to date utilising the £3m allocation and sets out the next stages required to continue delivery of the project in line with the approved strategic objectives, including the requirement for the remaining £30 million of the agreed Capital allocation. To secure future industrial and commercial tenants at the proposed PEIP, significant investment in enabling infrastructure is required. This investment will also support the delivery of new housing, including the proposed net-zero carbon Lamberkine Village. Background information The Council has an identified need for additional employment land, particularly in locations well connected to the City of Perth and the strategic trunk road network. At the same time, it remains challenging for private developers to secure finance for upfront infrastructure investment. To address this funding gap, such infrastructure is often delivered by the public sector, with a long-term legal obligation on developers to meet a reasonable and proportionate cost through developer contributions. Without public sector intervention at Perth West, neither the employment land nor the associated housing development is likely to come forward, which would further weaken Perth’s competitiveness given the current undersupply of available, serviced industrial and commercial land. The Perth West project supports the delivery of several key Council and regional strategies, including: • PKC Corporate Plan: developing a resilient, stronger and greener economy, tackling climate change and supporting sustainable places, and tackling poverty.
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• PK Climate Change Strategy and Action Plan: positioning the area as a national net-zero exemplar for the decarbonisation of transport and energy. • Tay Cities Regional Economic Strategy, Tay Cities Prospectus for Regional Growth and the Perth and Kinross Economic Action Plan: creating better paid and higher skilled jobs, supporting high value economic activity in energy and clean technologies and supporting and fostering an enterprising mindset. • Perth City Plan: make Perth a carbon-neutral city by 2040. • Perth and Kinross Local Development Plan 2 (LDP2): promoting sustainable economic growth of the area to the year 2029. LDP2 allocated 262.3ha of land at Perth West for residential, commercial and community uses (Proposal MU70). The southern part of Perth West allocation is promoted by the landowner, the John Dewar Lamberkin Trust (JDLT) (see Appendix 1a & 1b). Planning Permission in Principle (PPiP) for a mixed-use development at the southern part of Perth West was granted in November 2023 (application reference 20/00667/IPM). The permission includes up to 1,500 homes (Lamberkine Village); up to 26ha of commercial development (PEIP); and other associated community infrastructure (see Appendix 2). To access the land and deliver the first phase of the development specifically, investment is needed to provide the necessary enabling infrastructure. This includes: • Delivering an underpass beneath the A9 and an access road from Tweed Place and an active travel path linking to the existing path network which provides an alternative to Glasgow Road. • Providing platforms and servicing to enable the delivery of a commercial business park comprising up to 11ha of serviced employment land (PEIP Phase 1). In turn this will: • Support business growth and the creation of high value jobs in the clean growth sector. Approximately 255 construction jobs and 465 direct net additional jobs could be created once PEIP is fully developed and occupied over both phases • Create a national exemplar of net-zero carbon development. • It is highlighted that a second, longer-term phase could provide a further 15ha of employment land and 500 homes, subject to further private sector infrastructure, namely, further access off the A9.
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Progress A Project Board and Project Team have been established and have met regularly over the last two years to progress a number of workstreams critical to the delivery of the project which can be summarised as: a) Legal and Land Matters • Heads of Terms with the JDLT have been developed to provide for the transfer of PEIP Phase 1 at employment land value (figure still be determined) and for the payment of contributions by JDLT towards the enabling infrastructure. These Heads of Terms also provide for the payment of contributions by any developer acquiring land from JDLT and provide for appropriate securities being put in place to protect the Council’s position. The Heads of Terms are now effectively completed, and work is now beginning on the full contract which will require to be completed within the next financial year. • JDLT have marketed their development site for 1,000 residential units for Phase 1. Two preferred bidders have been identified, and discussions between the JDLT are ongoing with these housing developers. • The JDLT now has vacant possession of the site. b) Planning • Planning Permission in Principle has been granted for the southern part of the Perth West LDP2 (2019) allocation and there is an associated Section 75 legal agreement in place to secure the appropriate developer obligations. • It is envisaged that the residential and related development of the site will come forward in stages, and each individual development phase will require detailed planning permission. • Not all of the development that was originally anticipated as forming part of the first phase will be brought forward as part of the Council’s application. As a result of this, permission to vary the terms of the original planning permission and the legal agreement to allow an application for only the enabling infrastructure to provide access to the site, and for the first 11 ha of employment land will be sought in February 2026. • Providing this application is granted and the legal agreement is varied, the planning application (Approval of Matters Specified by Conditions) for this first phase of development will be submitted in June 2026. • The legal agreement sets out the requirement for a Masterplan of the site as approved through the Planning Permission in Principle. The Masterplan is to be considered by the Development Design Team (PKC and key agencies) and approved by Economy & Infrastructure Committee. c) Outline Design • The Roads Infrastructure Team are progressing the Outline Design with consultant’s Triskelion, with this work due to be completed in July 2026. • The Ground Investigation works are complete with reporting now being undertaken. • The cost estimate for the Final Outline Design will be prepared by June 2026.
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• A procurement strategy will be prepared to determine the most appropriate route for progressing the detailed design and construction. d) Business Park • External consultants Jones Lang LaSalle (JLL) were appointed on behalf of the Council to provide guidance on local and national property markets, focusing on specific submarkets and to provide advice on the phased development and what sectors should be targeted. JLL have identified a number of potential development partners and have actively engaged in direct discussion to determine initial levels of interest. A marketing brochure has been produced to showcase the potential opportunities available at the PEIP (see Appendix 3). Financial Update a) Costs As reported previously, the estimated costs (derived from 2024 cost consultant estimates) for the design and construction of the enabling infrastructure are shown in Table 1. Varying ranges of Optimism Bias (OB) have been applied and shown as a percentage. These initial cost estimates include an OB of 30% given that only preliminary outline designs have been prepared, but those that generally apply to roads infrastructure (23% structures, 15% roads) have also been shown. The costs make an assumption on inflation, but do not include land purchase costs. Table 1: Preliminary estimated costs (2024) Phase 1 Cost (£m) 30% OB Cost (£m) 23% OB Cost (£m) 15% OB Enabling Infrastructure: A9 underpass, innovation highway link from Tweed Place, platforming and utilities 32.84 31.35 29.65 The above costs will be updated in June 2026 as part of the Outline Design work package. High level costs are still estimated at c£33m. b) Income In March 2023 (Report 23/73), the Council approved funding of £10m towards the cost of delivering the enabling infrastructure for Phase 1 of Perth West development from the balance of its investment capacity and remitted officers with reflecting the remaining cost of the enabling infrastructure as part of the development of an updated Capital funding strategy for consideration in 2024. Table 2 below shows indicative income from developer contributions, ground lease income and grants to offset the Council’s costs for Phase 1.
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Table 2: Indicative income Sources Income (£m) Income generated from ground lease agreements estimated at 5,000 per acre per annum. Based on 20 acres = £300,000 per annum capitalised at 6%. 5 Developers’ contributions from residential use of enabling infrastructure still to be documented in formal contract but £13m based on development of 1,000 residential units 13 Tay Cities Deal grant towards additional innovative solutions to be embedded in the enabling infrastructure (Perth Innovation Highway) 5 TOTAL 23 Contributions from JDLT or any future developer(s) have still to secured, as the formal contract has not yet been agreed with JDLT although, as stated, the heads of terms for such a contract are developed. This is an essential requirement before the Council lets the building contract (scheduled for December 2026). JDLT has indicated that good progress is being made on securing housing developers. Tay Cities Deal grant of £5m has been earmarked for Perth Innovation Highway which is the innovation element of the enabling infrastructure involving the installation of digital infrastructure and Intelligent Transport Systems to manage transport in and around the site and the corridor between the site and Perth city centre. A Full Business Case (in preparation) would be submitted in March 2026 with a target approval by the Tay Cities Region Joint Committee by December 2026. c) Expenditure The Finance and Resources Committee has approved up to £3m for pre-construction works (Report No. 24/64). This work is underway and includes marketing, legal fees, surveys and ground investigation, outline design, provision of a cost estimate and preparation and submission of the planning application. The majority of this work will be completed by July 2026, with an estimated spend of up to £2.7m. Negotiations will continue on progressing the legal contract with JDLT and in terms of the design the next stage will be to prepare and procure a contract and undertake the detailed design. In order to do this, it is anticipated that a further £1.5m will be needed. Benefits Perth West will deliver a new residential neighbourhood and Eco-Innovation Park for Perth and will provide for a long-term, masterplanned expansion of the City’s housing and employment land supply. The PEIP has the potential to be a net zero carbon employment site of national significance in terms of driving regional productivity and a just transition to net zero. The benefits include to: • Enhance sustainable connectivity through walking and cycling and innovation.
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• Generate net zero energy and support decarbonisation including transport. • Generate additional tax revenues. More specifically, the benefits generated by the PEIP will include to: • Increase productivity by increasing employment in high productivity, high skills and wage sectors. • Catalyse further development and private investment in the city. • Attract innovative businesses in clean growth sectors. • Diversify Perth’s economy to broaden job opportunities, raise skills levels, and average earnings. Programme An indicative programme with key milestones is summarised below. This is subject to the Council approval of expenditure of a further £1.5m. • Perth West Masterplan will be presented to the Economy & Infrastructure Committee April 2026 • Submit planning application June 2026 • Outline Design completion July 2026 • Planning permission decision by September 2026 • Land Transfer & Contributions Agreement in Principle September 2026 • TCD Joint Committee for FBC December 2026 • Detailed Design commences (Two stage Design and Build Contract) – September 2026 • Construction commences – March 2027 • Main construction complete – September 2028 *subject to Gateway 2 It is proposed to undertake the detailed design, advance works and construction through a staged gateway process. See Table 3 below. Table 3 – Staged Gateway Activity Conditions Gateway 1 (By September 2026) Preparation of a procurement strategy for a two stage Design & Build (D&B) contract Subject to: • Council approval of further expenditure of £1.5m • Approval of procurement strategy Award of D&B contract, and commencement of Stage 1 (Detailed Design) Gateway 2 (By December 2026) Undertake advance construction works as part of Stage 1 e.g. site clearance, utility diversions Subject to: • Planning consent • Approval of FBC by TCD (full funding in place) • Contract in place with JDLT
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Gateway 3 (By February 2027) Notice to proceed to Stage 2 (Construction), with commencement of main construction in March 2027 Subject to: • Any other consents or licences in place It is noted that there may be an opportunity to accelerate this programme through early identification of opportunities and collaborative working among all parties engaged to deliver the contract. Risks Although the Council is at the stage of having agreed Heads of Terms with the JDLT the Council does not yet have a formal contract to secure their share of the project’s costs and to tie in any developer acquiring land from JDLT to paying a proportionate share. However, this risk is mitigated as no construction contract will be awarded unless and until the formal contract with JDLT is in place. The Council does not yet have a formal commitment from any potential PEIP business occupiers, leading to a potential financial and reputational risk. The challenge for businesses is that they cannot commit without certainty of delivery. This conundrum is the principal driver of market failure in the provision of employment land in many parts of the country. A high-level major risk summary is provided at Appendix 4.
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Appendix 1a: Extent of Perth West West Allocation
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Appendix 1b: Boundary of the Planning Permission site
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Appendix 2: Indicative phasing plan and land uses (planning ref: 20/00667/IPM)
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Appendix 3 Perth Eco-Innovation Park - Where Enterprise and Ideas Connect
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Appendix 4 High Level Programme Major Risk Summary Category of Risk Risk Title Risk Description Risk Mitigation Funding Tay Cities Funding FBC still to be agreed. Governance timeline and process must be followed with funding now profiled to 27/28 28/29 in the Deal. Work with Transport Scotland, Scottish Government, PMO and consultants to address business case concerns. Advance the FBC through the governance as swiftly as possible. Once approved - Accelerate funding from 27/28 28/29 if capacity in the TCD Programme. Funding Escalating Construction Costs Construction cost escalates due to delay and construction inflation. Use of specialist consultant to review costs and add optimism bias and risk allowance. Prepare a procurement strategy to determine the most efficient procurement route to construction as soon as is practically possible. Legal Inability to reach agreement with JDLT Legal agreement covering the extent of the scheme, funding contributions and land needs to be in place before a construction contract can be awarded. Inability to reach agreement could cause delays and add to costs. Clear and consistent Council’s position and statements. Recurring legal meetings and negotiation to ensure that the agreement is in place as soon as is practically possible. Stakeholder A9 Traffic Management The agreement of a traffic management strategy for the A9 is critical to the underpass design and delivery. The final strategy agreed will have significant impacts on safety, delays to road users and the cost of the project. Continue ongoing meetings with Transport Scotland and their network operators (Amey). Design team to continue to work with a Tier 1 contractor to advise on temporary traffic management and buildability. Stakeholder A9 Emergency Access There is a requirement for an emergency access to be installed on the A9 south of Broxden to ensure that there is more than one route in and out of Perth West. Junction layout and location need to be agreed with Transport Scotland. Continue ongoing meetings with Transport Scotland and their network operators (Amey). Utilities Utility Diversions Significant Gas and Water diversions are required to facilitate the underpass and the innovation highway at the A9 and west of the A9 Liaison with utility providers following their diversion procedures under NRSWA. Structure construction contract so that diversions can be carried out in advance of the main construction period where possible. Utilities Utility New Connections Utility provisions to PEIP need to be agreed to allow designs and processes to be completed with each utility provider. Sharing of utilities need to be agreed with JDLT. Preparation of utilities strategy. Liaison with Council’s Estate and Commercial Investment team to determine utility requirements and meetings with JDLT to discuss and agree scheme scope.
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Utilities Local Utility Capacity Utility provision to PEIP may require significant upgrades to the surrounding utility networks, depending on existing capacity. This could have programme and cost implications. Follow process for each utility provider and allow sufficient time for assessment process and for any upgrades required. Land Additional Land Required Depending on the A9 Traffic Management strategy that is acceptable to Transport Scotland, there may be a requirement for land north of JDLT’s land holding to be required temporarily to facilitate temporary widening of the A9. Continue ongoing meetings with Transport Scotland and their network operators (Amey). If temporary widening is required then discussions with relevant landowners will be required. Legal powers of entry to adjacent land for this purpose to be discussed with legal team. Planning / Environmental Planning Conditions Amendment Existing planning conditions need to be amended prior to submission of the AMSC application. Submission of and approval of Section 42 application to amend planning conditions. Planning / Environmental Objections from Environmental Statutory Bodies Objections to the AMSC application from environmental statutory bodies may be forth coming and can cause delays. Consultation with environmental bodies on the contents of the AMSC prior to submission. Scope / Technical Innovation Scope Scope for innovation aspects of project have not been agreed to allow the designer to finalise the strategy for this aspect. Economic Development Team to finalise the innovation requirement in consultation with other relevant Council teams.