Examination of Witnesses (Questions 160
WEDNESDAY 26 JANUARY 2000
160. Is there a downside? What about the present
(Mr Mulligan) In terms of the present
franchise operator, it is let on a design, build, operate and
maintain contract. Clearly, the present operator would have to
be compensated for what that operator has paid. All of those calculations
are factored into the figures which I have given you, and I am
happy to make the detail available to this Sub-Committee if you
Chairman: If you wish any of this to be confidential
you can consult us on that.
161. When we looked at the Croydon scheme last
week, one of the problems that Croydon was having, within the
sense of big bang, was that in the centre of Croydon they are
trying to get trams to run every three minutes down the same piece
of track. Is there not a danger with all those routes in Manchester
that it is going to be very difficult to get all the trams down
(Mr Mulligan) The current evidence available to us
is that with the planned extension we have at the moment, we can
manage with the infrastructure in the town centre that we have,
and studies have been done on that. Clearly, if we expand the
system further, however, we are looking at the feasibility (and
you will be familiar, Mr Bennett, with it) of Deansgate in the
north of the city being used for the tramway, so that we can accommodate
some of these issues of further expansion. We do not plan to do
that immediately, we think the junction can cope, at the moment,
with the planned extensions.
162. Finally, Tyne and Wear are sharing heavy
rail, are they not, with the new extension out to Sunderland?
Could you not do a bit better in Manchester if you could have
some shared running between heavy and light rail?
(Mr Mulligan) Shared running has been an aspiration
of every executive and authority, I think, for a long time.
163. They are going to do it in Sunderland.
(Mr Mulligan) I gather approval has been given and
Mr Scott can confirm that. I think that the reason why it is more
acceptable now to the Railway Inspectorate is because of the safety
measures which are built into light rail systems in terms of Automatic
Train Protection and the braking systems and so on. I would dearly
look forward to the day when we can have joint running, but, of
course, that does depend upon the train operating companies getting
Chairman: We know that you will find it difficult
to achieve the level of expertise demonstrated by Virgin Railways
every day of the week.
164. Your Group is on record as being in favour
of raising more resources by workplace charging and road charging
and so on. However, I understand that, for example, Leeds City
Council are having second thoughts about whether they should go
ahead on this because they are concerned the Government is not
prepared to put sufficient resources up front, so to speak. Have
you got a view about it? If so, what are your concerns?
(Mr Donald) West Midlands is looking at workplace
parking levies as a possible means of getting motorists to think
more carefully about their travel habits and, also, raising additional
funds for local transport investment. The view has been stated
very clearly to Government that to ensure that this, what is a
difficult policy at local levels, is more acceptable then we need
to see some of the improvements to alternatives to the carpublic
transport improvementstaking place, or certainly committed,
before any such scheme comes in. That is why West Midlands has
asked for £400 million of capital investment up front into
the alternatives before that decision is made.
165. Would that, presumably, be based on anticipated
(Mr Donald) I think discussions are still going on
166. One of the points that has been made to
the Committee very strongly by, for example, motoring organisations
in terms of workplace charging and road charging is that if the
funds are hypothecated and if those hypothecated funds can be
used to improve alternative public transport facilities then there
is a chance that, perhaps, the motoring lobby will begin to understand
that this is the right thing to do. That means there would have
to be, as you say, public transport improvements relatively quickly.
That being the case, and with your stated difficulties about getting
improvements in light rapid transit and rail transport off the
ground, is not the reality that those improvements will be road-based
(Mr Donald) There are a number of light rail projects
ready to go that pass today's tests and hurdles. I have to say
that certainly in the West Midlands, where the CBI support such
a policy, they want to see many more railwaysnot just light
railway but rail-basedrather than bus-based solutions.
That goes back to the early discussion about what has the effect
of being attractive to motorists and gets them out of their cars
in large numbers. It would be a mixture.
167. One final question: to put it bluntly,
if we are saying to the public "These charges have been hypothecated
and that is going to be an improvement for you to see and use,
however, because of the planning and all the rest of it you will
not have a system in areas where they have not got any for another
ten years" (and that is, perhaps, exaggerated, but you can
see the point I am making), that is not consistent, is it, with
the message that we need to give the motoring public, in particular?
(Mr Mulligan) If I could answer that question, it
has been made clear by the Deputy Prime Minister that he recognises
that there is a very real difficulty in imposing charges prior
to substantial capital investments so that there is a viable alternative
for motorists. However, as you will know, I think it has been
made quite public that there is a proposal that the fuel duty
escalator, to any extent in which it is above inflation, would
be applied for public transport purposes, and certainly when we
received the settlement letter in our Local Transport Plan the
message was that they wished to look at investment in Metrolink
in Greater Manchester in the context of that funding. So I think
the point is well made, but has also been accepted.
168. Gentlemen, you have been very patient and
we are within sight of the finishing post, so I am going to ask
you to be fairly brisk now. I take it that you might consider
the Government ought to have some mechanism by which they dissuade
people from applying for schemes which are not capable of being
(Mr Donald) I think in the late-80s and early 90s
there were about 50 light rail projects being worked on in the
UK. I think it is clear to most people that a lot of these were
never going to see the sight of day because, as we said, it is
horses for courses and it does require large numbers. They clearly
have a part to play in the major conurbations which we represent
but not in small towns.
(Mr Donald) So what needs to be done is put in place
some fairly rough and ready assessment as to whether in certain
localities light rail is part of the solution. That came up earlier,
in terms of getting a response from the department, the DETR,
on whether indeed the economic appraisal is supported by Government,
certainly before you get to the Transport and Works Act.
170. What can we do to increase the financial
contributions made by developers? The very point you were making
about the improvement in the value of the infrastructure is very
important to developers.
(Mr Wicks) I think there are two issues. Where we
are having success, and it has been referred to by my colleagues,
is where we have a system up and running, we have an extension
and people see the system workingparticularly where you
have land, as happened in Manchester and would have happened in
the Leeds schemethen the developer contributions are not
too bad, and you can get them. I think the real issue that has
to be addressed is that there are clearly benefits when you are
building a new system, particularly in the city centre, where
you are building along, if you like, existing frontages.
171. I ask you again, what do you need to do?
(Mr Wicks) What, I think, you can only do that is
either make changes in the taxation system as in the French system,
where there is an employer's tax, or you would have to have some
system whereby you can formally
172. So you are talking about muscle, really?
You are talking about Government muscle.
(Mr Wicks) I spent two years in Leeds trying to get
it voluntarily but we did not get anywhere; everybody will wait
until the system happens. You have to convince them it will not
happen unless they contribute.
173. What about the guided bus system in Northampton?
Is that a good model?
(Mr Wicks) I think there are particular circumstances,
I would argue, in Northampton, in that Northampton is a growing
town and there is a lot of changing land-use. Therefore, by involving
the developers in both funding and building the scheme they can
actually secure very substantial private sector contributions.
I think they aim to have a fully private-sector-funded system,
which I do not think you can replicate in the sort of conurbations
that we are talking about.
174. So is it better to go for an entire scheme
in one go?
(Mr Wicks) I think the particular circumstances of
Northampton allowed them to do that.
175. Does that apply to light rail?
(Mr Wicks) In terms of light rail, we think, as Mr
Mulligan said, that there is a critical point of entry at which
you get cost-effective procurement. Developer contributions, I
think, flow from certainty. The biggest other problem I have foundto
go back to the last pointis that uncertainty caused by
delay in Government decision or slowness in the Transport and
Works Act procedure will turn investors off. If they know your
scheme is going to happen, then it is within their planning timescales
and they will contribute.
176. Do you do better in Manchester with a single
(Mr Mulligan) We anticipate to get major contributions
from developers in Rochdale and Oldham. We are also on the doorstep
of Manchester airport which is a major developer and we anticipate
a major contribution.
177. They are slightly different because of
municipal involvement and you are not dealing a normal developer.
(Mr Mulligan) I think they will be looking at it in
a sense of how it will fulfil the targets that they have pledged.
Chairman: I make no allegation about their degree
of commercialism. They seem to me to be an example of all that
is best in commercialism. Is it not easier to convince somebody
like Manchester airport because they are looking at it in a different
178. They have made a commitment in the public
inquiry into the second runway that they will achieve a certain
level of public transport access.
(Mr Mulligan) Developers will not contribute voluntarily
unless they are persuaded that the scheme will not happen without
the development, and I think an important development over the
last six to 12 months is that the Deputy Prime Minister has made
it perfectly plain to any developer, public or private, if there
is going to be a major development then the first thing that he
will be looking at is the public transport arrangements, so instead
of the situation we have had in the past with places like Salford
Quays and Trafford Park where developers have expected to have
a free ride when it comes to transport, they have really now got
to come to some sort of agreement in advance.
179. You think now you have got clarity, you
have got muscle from the departmental end and it is clear to developers
where they are.
(Mr Mulligan) I think those things have become clearer.
I would endorse the comments of Mr Wicks in the sense that if
we are going to get development gain on built-up areas there needs
to be legislative change.