Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of Witnesses (Questions 106 - 119)




  106. Good afternoon, gentlemen. In no particular degree of order or status, may I ask you to introduce yourselves?
  (Mr Wicks) Roy Wicks, Director General, South Yorkshire PTE.
  (Mr Donald) Rob Donald, Director General, Centro, West Midlands.
  (Mr Mulligan) Chris Mulligan, Director General, GMPTE, Greater Manchester.
  (Mr Scott) Bill Scott, Assistant Project Director, Tyne and Wear.
  (Mr Scales) Neil Scales, Director General, Merseyside PTE.

  107. Gentlemen, could I just ask you to remember that when you are in agreement we assume you are not going to double-guess one another, and that when you are in disagreement we should be delighted to hear from you. Is there someone who wants to make some general remarks?
  (Mr Mulligan) No, Chairman, we are quite happy to answer questions.

  108. Let us start off. Can you tell me what lessons you have learned from the experience of the first year of Supertram's operation, in order to ensure that similar problems are not going to recur in future?

  (Mr Wicks) If I could talk a bit about the experience in Sheffield, to start. I would just explain, for the Committee's benefit, that I took over in Sheffield in the last 15 months, but I am still very familiar with the scheme, as I worked in West Yorkshire and South Yorkshire prior to that. There are three key things that I think we certainly learned when I was in West Yorkshire, which I think may be of benefit to the Committee. First was the long time that Sheffield took, as a scheme, to bring forward. The scheme developed in the early-80s and was ultimately built in the mid-90s. During that time not only were the authorities, such as the county council, changed but there was bus deregulation. At the same time, those who are familiar with South Yorkshire will know, there was a massive change in the economy, the steel industry changed dramatically, and those two things very much affected the demand for the system when it opened. So a system that had taken some time to be achieved—

  109. What was the real timescale—ten years?
  (Mr Wicks) If you take from the first deposit of a Parliamentary Bill, which was in 1985, the scheme opened in 1996, and obviously there was a planning period before that. Some of that time was down to the fact that we did have to review the scheme in South Yorkshire to try and actually estimate the effect of bus deregulation. So the scheme opened in 1996 with much lower demand than was predicted, and that, in turn, I think, caused a further problem, that of the financial viability of the whole scheme which had originally been based on higher estimates. So I think the lessons that were learned when I was working, at that time, in West Yorkshire in trying to plan the scheme in Leeds, was to try and accelerate the processes to the extent we could, as a public sector, in bringing schemes forward. Secondly, to get a better estimate of how the scheme would work in a deregulated market by bringing the private sector into the project at an earlier stage. Thirdly, to learn some of the detailed lessons in terms of the construction process. The South Yorkshire Supertram was a major public sector investment—£240 million—project. It was built to time and to budget, which I think is a major achievement, and it was the first complete construction of a street-running system in the country (my colleagues will talk about their own systems). However, it did mean that there was some disruption in the city centre. A lot of lessons have been learned by the successors to Sheffield on how to manage that situation.

  110. Do you think that you can plan light rail in conjunction with properly integrated land-use planning?
  (Mr Wicks) I certainly think we can now plan it better than we did. PPG 13 will assist a lot in achieving that. What you cannot mitigate for are major economic changes, such as the down-turn in the steel industry.

  111. That would be true of any project, though, would it not?
  (Mr Wicks) Yes.

  112. If you build it on a particular customer base and then that customer base disappears, that is almost inevitably going to affect any business.
  (Mr Wicks) I think the creditable thing now is that the system is doing well, from about six million passengers in 1996 it is now carrying eleven million, with a year-on-year growth of about 10 per cent. It is very interesting to see—to support the point you made, Chair—that the land-use along the route is developing at a premium. There are a lot of developments going along the route, particularly in the section down to Meadowhall, which is a major retail park, and the Don Valley, which is where a lot of the steelworks were. So it is actually now working as a catalyst for development, and so I think we are, therefore, able to go back to the PPG 13 and have a very effective integrated land-use policy.

  Chairman: Anybody else quickly on that?

Mr O'Brien

  113. Could I ask if there are any proposals to extend it, in South Yorkshire?
  (Mr Wicks) That is, actually, the other bit of good news. We now have the university and the hospitals interested in extensions out towards them from the city centre. That is a fairly modest extension, and we are now looking—obviously in conjunction with the Objective 1 status that South Yorkshire now has—at extensions out towards Sheffield Airport and the Tinsley area. In a sense, there is a lot of, if you like, satisfaction within Sheffield with the scheme. I think the final lesson we have learned from the whole Sheffield project was that Sheffield was the first scheme to actually establish a new market; other schemes are built on existing rail markets, or whatever. So another issue, in terms of how well we are able to forecast what people will do has been learned from Sheffield, and how that can be done in deregulated bus markets.

Mr Bennett

  114. Have you reached the forecast levels of passengers, or are you still short of that?
  (Mr Wicks) There were two forecasts. There was the forecast done very early on in the process in the mid-80s when the Bill was submitted, and that forecast something in the region of 20 million passengers after about three years. Now, the actual opening patronage was about 6 million. During that time the forecast was revised, because, clearly, there had been, as I say, the downturn in economic activity. The bus market, for example, declined 40 per cent between 1987 and 1994 in Sheffield.

Mr Olner

  115. Is that due to fares, though?
  (Mr Wicks) South Yorkshire's fares policy up to 1986 had been the low fares policy, but by 1987 that had changed. In fact, the case for the scheme was based on assuming that the 1987 bus market would stay stable, but it declined. I think that led, if you like, to a revision of the forecast. The actual revised forecast by 1996 was an annual patronage in the region of 9 to 10 million, which we are now exceeding.

  116. A lot of tramways are very expensive. Do you think the DETR is correct in asserting that modest guided bus schemes or comprehensive bus priority measures could bring similar benefits at a much lower price?
  (Mr Mulligan) Through you, Chair, in terms of the White Paper which was published, there were reservations expressed by the Government about the cost of light rail schemes. I think it is very pleasing that over the last six months the Deputy Prime Minister has begun to accept that there can be major benefits from light rail schemes. We are not present here today saying that there is not a role for guided bus. The bus itself will always be the workhorse of the public transport system. I think, however, that Members of the Committee will need to appreciate the sorts of processes we have to go through in order to validate a light rail scheme. We have to submit something called a Section 56 Justification. In terms of that justification we are obliged, by the DETR and the Treasury, to look at lower cost alternatives, such as guided bus, such as bus. In the case of the Manchester Metrolink Phase 1, which has been hugely successful, it was quite clear that compared to those alternatives, the benefit-to-cost ratio (which is the economists' term for the value for money of the scheme) was substantially higher for that scheme than for any other option, showing a benefit-to-cost of about 2:1. I can also tell the Committee that for our future extensions, on a single contract, we are looking at a benefit-to-cost ratio similarly of about 2:1.


  117. What is that? Economies of scale or cost? What was the big factor in that?
  (Mr Mulligan) The big factor, in terms of the Phase 1 system, was the calculation of user benefit, which is time and the waiting time for people. The system is reliable, it is quick, it is accessible and it is safe. All those factors calculated together produced a very healthy benefit-to-cost ratio. Indeed, I would venture to suggest that if it were done again at a patronage level of 14 million compared to a planned design capacity of 11 million, you would see a benefit-to-cost ratio far higher than 2:1, simply because the demand forecasters for the Manchester system under-estimated the travel patterns of people in Greater Manchester. In particular, they thought that travel patterns would be between Manchester and Altrincham and Manchester and Bury. What they failed to take into account, which is the limitation of demand forecasters, was the major suppressed demand for travel right across the county, from Bury in the north to Altrincham in the south.

  118. You thought only the posh bits would need it. You are just snobs!
  (Mr Mulligan) No, no. I would say this about the success of any light rail scheme, particularly when it is talking about car abstraction, that I feel it is essential that at any end of any given scheme you have a substantial travel generator, and it is a fact of life that at the Altrincham end of the scheme and at the Bury end of the scheme there are very high car ownership levels.

Mr Olner

  119. Have you got any proof that people will get out of the car and use the tram, or get out of the car and use the bus?
  (Mr Mulligan) I can provide attitudinal evidence on car-to-bus transfer, but it does not happen a great deal. In terms of evidence on car-to-tram transfer, we reckon that about 20 per cent of the passengers who are currently using Phase 1 Metrolink were previously car owners, car users, which accounts for about 2.5 million trips. I think Mr Donald may have something to add on that.

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