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

Examination of Witnesses (Questions 160 - 179)



Mr Bennett

  160. Is there a downside? What about the present franchise operators?

  (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 wish, Chairman.

  Chairman: If you wish any of this to be confidential you can consult us on that.

Mr Bennett

  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 Mossley Street?
  (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 "kitted" themselves—

  Chairman: We know that you will find it difficult to achieve the level of expertise demonstrated by Virgin Railways every day of the week.

Mr Stevenson

  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 car—public transport improvements—taking 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 future revenue?
  (Mr Donald) I think discussions are still going on on that.

  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 buses?
  (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 railways—not just light railway but rail-based—rather 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 funded.
  (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.

  169. So?
  (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 working—particularly where you have land, as happened in Manchester and would have happened in the Leeds scheme—then 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 found—to go back to the last point—is 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 contract?
  (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 context?

Mr Bennett

  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.

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