Examination of Witnesses (Questions 200
WEDNESDAY 26 JANUARY 2000
200. Has that economic employment objective
(Mr Willis) I think the answer most firmly is yes.
The forecast for the DLR was 25,000 people per day and it is now
201. I was thinking in terms of jobs.
(Mr Willis) Yes, I would say again. Of course, whether
you can say the DLR triggered those jobs itself or whether it
was a combination, I would argue it was a combination of that
and the promotion of the area and enterprise zone status.
202. That is very helpful. Are you in a position,
Mr Willis, to tell us what the difference in costs were between
the option that was rejected and the light railway line?
(Mr Willis) The cost of the light railway was £70
million outturn. I think the cost of the busway was about half
of that cost but the busway was not a complete busway, in part
it ran on roads.
203. If what I say now is wrong you will correct
me, I am sure. There was a significant difference in cost-benefit
between the two?
(Mr Willis) Yes.
204. Again a significant difference in cost,
almost double the cost.
(Mr Willis) Yes.
205. And yet in your opinion the light rail
system was "one factor" or may have been one factor
in the development of the area? Is that a fair assessment?
(Mr Willis) Absolutely and the decision was taken
therefore by government effectively saying that there was a transport
justification for this project and there was a regeneration justification
for this project.
206. Are you effectively saying finally that
bus-based systems are less attractive economically from an investment
point of view than light rail systems?
(Mr Willis) In terms of the particular circumstances
there, I think yes. It is very difficult to see how a bus-based
scheme could have stimulated the area in the way the DLR did in
terms of directing the major development that actually happened.
207. What proportion of the Docklands Light
Railway total capital costs would have been saved if it had been
possible to build the system originally with the capacity to meet
(Dr Quarmby) Are we to take these questions as addressed
to us now?
Mr Donohoe: Anybody that wants to answer it
can answer it.
208. We are strangely generous here and anyone
who wants to chip in may do so. One or other of you.
(Mr Smith) Can I comment first. In a sense the answer
is that the Jubilee Line is now there and is already relatively
full. Had you been able to anticipate today's demand you would
never have built Docklands Light Railway in the way it was but
that was not something we could tell. You could not have built
Docklands Light Railway at the time to provide the Jubilee Line.
It became clear over the years, and I think one of the questions
in terms of the cost of the railway was the fact that it was a
very price constrained original railway and that led to a significant
cost. How much had we had the whole of the scheme at the beginning
we would have saved we have never asked the question of the constructers
to know. Clearly the economies of scale would mean it was significantly
209. Why do you say you have never asked the
(Mr Smith) We have never gone back to them and said,
"Had we given a contract for the whole the Docklands Light
Railway as it now is what would be the cost?"
210. Did you want to comment on that before
we move on?
(Dr Quarmby) I was simply going to say, Chairman,
that undoubtedly if the network that we had today in the DLR was
built all at one go it would have cost considerably less because,
as our evidence makes clear, much of the system that was built
originally we had to go back to it and extend platforms and reconfigure
the system in a way that you would not have had to do if you had
set out with the capacity and design that you have got today.
211. If I can move on to the Croydon experience.
Last week when we were there we were given evidence to the effect
that there was a 99-year lease. Can you give us some indications
as to why that was the period and what is to be gained, or perhaps
even lost, by having such a lease?
(Mr Smith) The important question in a sense in a
public-private finance deal of this kind is to make sure you really
have transferred properly the risk, that they are not building
a railway they hand back to you at the end of the franchise period
in a rather less good state than it started. To that extent having
a franchise where they are building it and looking after it for
a short period in a sense is extremely dangerous and risky to
the public sector. I think you could argue as to whether 30 or
50 or 99 years is the right period, but you have certainly got
to have a very lengthy period where they are building for the
whole-life costs and they are not merely building for low construction
cost and short-term maintenance costs. And we judged the 99-year
lease was certainly adequate to do that to ensure the private
sector was fully committed to it, and that they ran it as a business
rather than a short-term contract.
212. You are not suggesting that if somebody
got a franchise for 30 years they would not be committed to it?
(Mr Smith) When you look at the life of the asset,
a lot of the assets are built to last very much longer than that.
213. What particularly would you identify as
lasting more than 30 years. I cannot think of anything else apart
from the track.
(Mr Smith) If you look at it in the context of the
Underground, we are still using the same tunnels that were built.
Chairman: Do not offer any hostages to fortune
because if we start on what you are doing with your assets it
may cause a certain amount of violence in the Committee.
214. On the basis of that, if I can ask a supplementary,
who will be responsible for the planning and funding and building
of any extension to the Croydon Tramlink?
(Mr Smith) That will be for negotiation. We would
expect it fairly inevitably if it was a direct extension to be
something we would negotiate with the current franchise holder.
215. Would it be likely that the present constructer,
who is on the board, would be given a head start in any extension?
(Mr Smith) In a sense it is more the concessionaire
as a whole who would clearly be in the lead and for them to determine
how they would like to carry out a construction and take it forward.
(Dr Quarmby) I would also say that if it were thought
to be desirable to extend the Croydon Tramlink by that time we
will have a mayor, and I would have thought that this is something
that the new mayor and the new Transport for London organisation
would be leading on. The means of delivering an extension would
be of a matter for discussion with the concessionaire. It might
be a variation to the concession. It might be a completely new
way of delivering and financing the extension. There are many
ways of doing it, but my view is that it would be the mayor and
the people responsible for transport in London at that time who
would be in the lead in developing those forward plans.
216. Would that, do you think, be to the advantage
of the operating companies?
(Dr Quarmby) I do not know whether it would be to
their advantage or not. If one was to go into private partnership
with a body in order to build an extension, whether it was the
existing concessionaire or somebody else, you would want them
to get some benefit from it also otherwise they would not be a
217. You were saying earlier on that rail transit
proves much more popular and that it carries a lot more people.
What is the experience comparing that with densely populated areas,
where it is quick and easy for people to get on that method of
transport, as with suburban area where people may have to come
in from longer distances to hit the railway? We all know that
mothers will not go very far without the car and fathers take
their car as far as the shop to buy a packet of cigarettes. What
is its effectiveness in suburban areas as opposed to urban areas?
(Mr Smith) That is an important part of why we believe
that buses and light rail or guided buses fit together. One does
not take over from the other. Penetrating into local housing estates
is extra-ordinarily unlikely to ever be good value for money.
What you need to make sure is for those kind of trips you need
to have a high quality bus network with good quality interchanges
and a high level of priority along their corridor. We are certainly
accepting in the very suburban areasand Croydon you might
argue is a suburban townfor those main corridors that light
rail is the right option, but nonetheless most of the people coming
into Croydon on London Transport services will still be coming
by bus even when the Tramlink is open. Both have an important
218. A propos the London role, you have
got the local traffic but also an enormous input of commuter traffic
coming in from areas. What would be the economics of your producing
your transit system right the way out to the M25 to take people
off those routes into London and bring them in by rail instead
where they can park by the M25? It is quite a long way to get
out. What about that?
(Mr Smith) Although if you carry out the speed comparison
between bus without a very high level of priority and light rail,
light rail is much faster. If you compare it, taking Croydon,
Croydon to the centre of London by national rail services is half
an hour. It would be a very slow journey by a light rail system.
And the volumes are such that, as we see every day sadly too much,
national rail services and Underground at those distances are
already full. You have to be providing that level of very high
capacity and you will be aware that London Transport advocates
more of those services but light rail would be a relatively small
pinprick and a not very attractive one because of the speed.
219. I think Mrs Gorman's point is very valid.
Even looking at what the DLR can do, because it is computer controlled,
because it can move the trains out, because it has got the extra
capacity, are you quite sure that is the factual answer you should
be giving us, Mr Smith, or are you giving us a convenient answer?
(Mr Smith) No, I am certainly not giving you a convenient
answer. If you are building a track of that scale you in a sense
have a choice between frequent stops, which is what light rapid
transit is about, or you do not have many stops and if you do
not have many stops you put on a much bigger train and you are
ending up with a railway for those long distances.