ANNEX A
Transport Sub-committee's visit to the
Croydon Tramlink and the Docklands Light Railway:
19 January 2000
1. The following Members of the Transport Sub-committee
participated in the visit: Mrs Gwyneth Dunwoody, MP (Chairman),
Mr Andrew Bennett, MP, Mr Brian Donohoe, MP, Mr Clifford Forsythe,
MP, Dr Stephen Ladyman, MP, Mr Bill O'Brien, MP, and Mr Bill Olner,
MP. They were accompanied by the following members of staff: Mr
Gavin Devine, the Sub-committee's Clerk, Mr Kevin Lee, Committee
Specialist, Miss Frances Allingham, Committee Assistant, and Miss
Leslie Young, Committee Secretary.
CROYDON TRAMLINK
Participants from Croydon
2. The members of Tramtrack Croydon Limited (TCL)
who participated in the first part of the Sub-committee's visit
were Mr Bob Dorey, Chairman of TCL, Mr Charles Lenox Conyingham,
Deputy Chairman, Sir William MacAlpine, Director, Mr Peter Hendy,
Director, and Mr Roger Harding, General Manager.
The Tramlink system
3. The idea of bringing trams back to Croydon grew
out of a study of local transport conducted by the British Railways
Board and London Transport in 1986, covering the whole of the
greater London area. Since 1990 Croydon Council and London Transport
have worked together to promote the Croydon Tramlink project.
4. We were told that the London Borough of Croydon
regards the Tramlink project as important for a number of reasons.
These include a desire to improve the transport facilities available
to the 25,000 inhabitants of New Addington, for whom buses have
previously been the only form of public transport. The construction
of the Tramlink will reduce the journey time from there to central
Croydon from 35 to 17 minutes. We were also told that the Council
sees the project as a means of improving the quality of life of
other residents of the Borough, by providing an additional, and
particularly efficient, mode of public transport. It is also seen
as important for the Borough's economic development.
5. Powers to construct the Tramlink were sought in
a Private Bill deposited in 1991 (the Croydon Tramlink Bill [Lords]).
The Bill was opposed by petitioners in both the Lords and the
Commons, but was eventually enacted on 21 July 1994. Work to construct
the Tramlink began in January 1997.
6. Approximately 17 kilometres of the 28-kilometre
Tramlink network runs along lines converted from heavy rail operation
or used former heavy rail alignments. Around 3 kilometres of the
system operates along existing highways with the remaining 8 kilometres
using new rights of way, mostly adjacent to existing roads. The
network consists of a clockwise loop in Croydon town centre with
four branches. The initial service pattern is planned to be as
follows: a service between Wimbledon and Elmers End every 10 minutes;
between Croydon and Beckenham Junction also every 10 minutes;
and between Croydon and New Addington every 6-7 minutes.
7. The cost of the project for which TCL was responsible
was approximately £185 million, which excludes the cost of
utility diversions (about £20 million), paid by London Transport.
This compares with the estimate of the project's cost of £160
million at 1992 prices made during the passage of the Croydon
Tramlink Bill. The cost of the project has been divided almost
evenly between the public and private sectors: £125 million
has been provided by central Government. Despite the project's
costs, an assessment of the different transport options for the
area concluded that Tramlink enjoys a benefit to cost ratio of
2.7 to 1, and is a more attractive option than bus-based improvements
to the transport system. Moreover, the benefits of the project
might have been understated in the assessment, since no estimate
has been made of the increase in property values and creation
of jobs as a consequence of Tramlink: there is, in any event,
no mechanism by which the scheme can capture betterment of this
kind.
8. Once operational Tramlink will have 120 employees
of which 72 will be tram drivers. Particular emphasis has been
placed on maintaining a flexible workforce: managers, for example,
have also been trained to drive. Drivers, as well as controllers,
are salaried, and their rates of pay are better than those offered
to local bus drivers.
The Tramlink concession
9. Following the enactment of the Croydon Tramlink
Act, the project was put out to tender. Four consortia entered
bids for the 99-year concession to design, build, finance and
operate the project: the successful group was Tramtrack Croydon
Limited, which is made up of First CentreWest Limited, a subsidiary
of FirstGroup plc, Bombardier Transportation, The Royal Bank of
Scotland plc, 3i Project Finance, and Sir Robert McAlpine/Amey
Construction Limited. The concession was awarded to the bidder
that required the lowest level of capital grant: TCL undertook
to take the project, operating and traffic revenue risks.
10. The project's financing was modelled over a 30-year
period, rather than the full length of the 99-year concession.
This was because TCL has assumed that it will have to replace
the vehicles and other equipment at that time, and it regards
it as important to ensure that new investment will be available
to renew the system. Agreements have been reached with Bombardier
and Amec for maintaining the system's trams and infrastructure
respectively.
11. TCL expects 40 per cent of its revenue to come
from the Travelcard scheme, 40 per cent from cash fares, and 20
per cent from concessionary passes. The company will not have
the commercial freedom to set fares, since fares will be decided
by London Transport. For that reason, the concession provides
some protection to TCL from the effects of any non-inflationary
fares increase policy which might be adopted by London Transport
in the future. This takes into account any increases in patronage
which would be generated by lower fares in future. Apart from
the project delivery risk, the main commercial risk that TCL is
taking is in the number of passengers who would use the service.
Nevertheless, the consortium felt that the concession carries
a relatively high risk in comparison with PFIs, which were limited
to the provision and maintenance of infrastructure.
12. It is estimated that 500,000 people live within
half-a-mile of a Tramlink stop, and that the system will carry
more than 20 million passengers each year. This forecast is based
on existing bus and rail usage, TCL's forecast of the modal switch
from cars, and the extent to which the system will encourage additional
trips. The consortium expects around 11 per cent of users to transfer
from cars (removing 2 million car journeys per annum) and 9 per
cent of passengers to use Tramlink to make new journeys: the remainder
will transfer from other modes of public transport. TCL felt that
it had won the concession because of the robust view it had taken
of passenger volumes. There are some risks associated with its
forecasts: for example, the proportion of passengers diverting
from bus to tram might prove to be an over-estimate. However,
by contrast with earlier light rail schemes outside London, Tramlink
will not have to face competition from bus operators, since London
Transport intends to restructure bus services in the area to complement
Tramlink, and some dedicated feeder routes will be provided. This
will leave the volume of bus mileage operated in the area broadly
unchanged.
13. TCL told us that the costs of bidding and drawing
up the concession arrangements and its subsidiary agreements had
been substantial. More than 100 separate legal agreements had
been put in place between the various parties. It also observed
that each light rail scheme in the United Kingdom had been carried
forward according to different financial policies: Tramlink, for
example, was the first to be taken forward under the Private Finance
Initiative. TCL hopes that the procedure for planning, financing
and building light rapid transit projects might be improved as
a result of this and other recent experiences.
Operations
14. As part of the concessionary agreement, London
Transport has specified the minimum hours of operation and service
frequencies for Tramlink. TCL, however, plans to operate more
services than the minimum requirement. Moreover, Tramlink will
operate more frequently than the heavy rail services it, in part,
has replaced. The intervals between trams running in central Croydon
has been tested to sixteen trams per hour (ie one tram every four
minutes), but testing continues in order to achieve the company's
objective of three minute headways. Trams will operate from 6.00
am (7.00 am on Sundays) to approximately midnight. Other sections
of the concession deal with further performance indicators, such
as standards of cleanliness. While Tramlink will be included in
the Travelcard scheme, the possibility of offering through-ticketing
to destinations on the national rail network outside the Travelcard
area is being discussed. The train operating companies providing
services in the area view Tramlink as complementing, rather than
competing with, their own services.
15. TCL is content with the degree of priority planned
for its vehicles over other traffic in areas of on-street running.
In central Croydon, the trams will benefit from a degree of freedom
from other traffic that is unknown for buses. TCL told us that
it believed that this reflects policymakers' more favourable perception
of light rail compared with the bus, and the widespread belief
that it can attract people from their cars.
16. No decision has yet been taken on whether bicycles
would be allowed on the trams, although all stops would be provided
with bike racks. While the trams are of a low floor design, with
areas for buggies and standing passengers, TCL does not think
that bicycles could be accommodated easily. Each cycle would require
the same amount of space as up to six passengers and the consortium
is keen to ensure that standing areas are available to passengers
with push chairs or those using wheelchairs.
17. TCL said that it regretted that it had not proved
possible to open the system in November 1999 as originally planned.
The delay was caused principally by delays in the design and approvals
process, but during testing and commissioning there had been problems
with the system's hardware. There have also been a number of accidents
during the testing process including minor collisions between
trams and motor vehicles. A more serious incident involving a
car had occurred in October 1999, and is the subject of an inquiry
by the police. No accidents involving pedestrians have been reported.
At the time of the Sub-committee's visit, TCL expected that operations
would start in late February 2000, although this deadline was
also subsequently missed. The system has not yet passed through
the 14-day 'proving period' which must be completed before the
construction joint venture, McAlpine/Amey, is allowed to hand
the system to TCL. The system procurement contract includes a
provision for liquidated damages in respect of delay in opening
Tramlink.
18. Approval of the system from Her Majesty's Railway
Inspectorate (HMRI) is required before it enters public service.
TCL told us that HMRI has assembled a dedicated team of specialists
for this work, and has built up considerable expertise, despite
the limited application of light rail in the UK. TCL is concerned,
however, that proposals for charging for the Inspectorate's time
might represent a significant additional cost for a project like
Tramlink: it has been suggested that charges might be as much
as £1,000 per day.
Future developments
19. TCL felt that Tramlink, as well as other light
rail and tram projects, is particularly important for addressing
suburban transport problems, especially on the orbital routes
where congestion is most severe. It thought that there are three
or four other potential schemes in London with sufficient passenger
demand to justify investment in light rapid transit: for example,
there is what appears to be an attractive proposal to construct
a light railway along the line of the Uxbridge Road in west London.
These projects are the subjects of London Transport's intermediate
modes study.
20. TCL believes that new schemes could progress
more quickly, since it has been forced to follow a steep learning
curve, and others can learn from its experience. Despite the fact
that, on occasion, it had been difficult to find specialists who
could advise on certain technical aspects of the project, it has
now put together an expert and experienced team which might be
used on other light rail projects. However, if new projects do
not start soon, there is a risk that the pool of expertise created
for Tramlink will disperse. A particular lesson TCL has learnt
from its experience in Croydon is that the long timescales involved
with developing schemes like Tramlink mean that it is vitally
important to gain local cross-party support for projects, since
elections will inevitably occur during the development of the
project. Without such support, would-be promoters will be discouraged
from starting schemes for fear of experiencing financial losses.
21. In the future, TCL foresees a number of possible
extensions to the original system. Under consideration are a link
from Mitcham Junction to Wimbledon via Collier's Wood, and routes
to Sutton from the north and the east. Another possibility is
an extension to Crystal Palace, which will probably be the first
of any new projects. The procedure for extending the system has
yet to be agreed in detail, although TCL is obliged to consult
London Transport first on any proposals and vice versa. As most
extensions to the system will require public funding, Transport
for London is likely to take the lead in calling for expansions
of the network. It is known that the system will be able to accommodate
more services as technically it is capable of handling trams running
at two minute intervals: however, some further traffic management
changes in the centre of Croydon will be required to achieve such
headways.
Conclusion
22. TCL concedes that the circumstances in Croydon
which favoured the development of light rail, such as the existence
of major traffic generators and the potential to convert lightly-used
or disused heavy rail lines, might be atypical. In the absence
of the number of positive features of the Croydon Tramlink project,
it probably would not have been as attractive to those providing
public or private sector funds.
DOCKLANDS LIGHT RAILWAY
Participants from Docklands Light Railway Limited
23. Those members of the Docklands Light Railway
Limited (DLR Ltd) who participated in the second part of the Sub-committee's
visit, to the Docklands Light Railway, were Mr Ian Brown, Chief
Executive, Mr David Keep, Company Secretary, Mr Brian Abbott,
Public Affairs Manager, Mr Howard Smith, Planning and Development
Director, and Mr Paul Wren, Commercial Manager.
The existing system
24. The 26-kilometre light railway system is owned
by DLR Ltd, which is a Non Departmental Public Body sponsored
by the DETR. DLR Ltd manages the franchise held by Docklands Railway
Management Ltd (DRML) for operating the railway, and the concession
let to CGL Rail for building and maintaining the Lewisham Extension.
It is also responsible for planning and developing the railway's
assets.
25. We were told that the Docklands Light Railway
has been successful for a number of reasons. The redevelopment,
at a high density, of much of Docklands has led to much increased
demand for public transport. Limited parking provision and traffic
congestion on the local road network has also helped to increase
patronage of the railway. More recently, the opening of the Jubilee
Line Extension means that the Docklands Light Railway now acts
partly as a feeder to and distributor from the Jubilee line, and
while patronage of the Docklands Light Railway actually increased
after the opening of the Extension, passenger flows are now becoming
more balanced across the system. Integration with other forms
of public transport is important to the Docklands Light Railway
as two-thirds of journeys made on the system begin on buses or
on the Underground. This fact underlines the importance of the
Docklands Light Railway's participation in the multi-modal Travelcard
scheme.
26. Under the terms of the franchise agreement, the
franchisee, DRML, is entitled to fares revenue from most of the
railway plus a subsidy. In addition, bonus payments are made (or
penalties levied) according to its performance against a range
of indicators including those related to train services operated
and lift/escalator availability. Satisfaction surveys have been
undertaken, and if passengers are unhappy with services, payments
to the franchisee will be reduced accordingly. Performance targets
have been raised over time.
27. Bicycles are not carried on the Docklands Light
Railway because of the network's underground sections. A bicycle
park-and-ride scheme, which would provide a secure bicycle storage
facility at stations, is under consideration.
Recent and future extensions
28. The Lewisham Extension, which was financed by
a Public-Private Partnership, was completed two months early and
within budget. The revenue risk of the project is borne almost
entirely by DLR Ltd for the first nine years of the 24-and-a-half
year concession, with the concessionaire, CGL Rail, paid on a
daily basis (around £65,000 per day) according to the availability
of the infrastructure. This provision acted as an incentive to
open the extension earlier than scheduled. As well as assisting
the regeneration of the areas served and providing opportunities
for new journeys to be undertaken, the link integrates the Docklands
Light Railway more closely with the heavy rail and bus networks.
29. Of possible future extensions to the Docklands
Light Railway, proposals for a new line to London City Airport
are the most advanced. It will be a largely free-standing and
partly self-financing project. The scheme has been designed to
benefit local residents, as well as users of the airport whose
numbers are forecast to double over the next three years. The
4.4kilometres extension to the airport and North Woolwich will
include two or three intermediate stations. An application for
a Transport and Works Act Order to construct the line was submitted
on 7 March 2000, and it was expected that the line might be open
by early 2004. It is likely that a concession to build and maintain
the new line, based on the model used for the Lewisham extension,
will be let.
30. At present, most passengers travel to the airport
by taxi (56 per cent), with 22 per cent travelling by car and
the remainder using dedicated bus services. The objective of the
extension to the Docklands Light Railway is to provide an alternative,
for which passengers travelling to and from the airport will be
charged higher fares (an extra £2.50) in order to raise sufficient
revenue to justify investment in the scheme. The cost of travelling
by taxi or airport bus will be taken into account when setting
the Docklands Light Railway fare. DLR Ltd stressed, however, that
local residents and airport workers would not have to pay premium
fares. Once on the Docklands Light Railway it is expected that
about half of the airport passengers will change onto the Jubilee
line at Canning Town rather than continue their journey into central
London on the Railway.
31. While the volume of traffic to and from London
City Airport alone justifies the extension, the intermediate stations
will bring significant regeneration benefits to brownfield sites.
The favoured route has been chosen, in part, in order to maximise
the impact on economic development. Moreover, the proximity of
possible development sites to the stations will allow dependence
on the car to be reduced, and enable housing developments of a
higher density than would otherwise be the case. Consequently,
more than 50 per cent of passengers using the new extension are
expected to join at the intermediate stations. According to DLR
Ltd, there is considerable support among local communities, local
authorities and English Partnerships for the project.
32. The projection of the line beyond North Woolwich
and across the river Thames to Woolwich Arsenal has also been
considered by DLR Ltd and London Transport. The Docklands Light
Railway could provide a high frequency service (15-20 trains per
hour) over the route and, at an approximate cost of £150m,
it would be cheaper than a heavy rail alternative, the cost of
which has been estimated at £245m. However, construction
of a light rail link to Woolwich Arsenal would end the possibility
of running heavy rail through-services over the route. However,
even the heavy rail alternative did not allow for the possibility
of freight traffic.
33. Another possibility being evaluated is the conversion
of the North London line between Canning Town and Stratford from
heavy rail to light rail operation. The use of the existing low
frequency heavy rail service over this section is expected to
decline following the opening of the Jubilee Line Extension. The
Docklands Light Railway could provide a higher frequency service
with additional stops which would improve access to development
sites along the route. The scheme would cost around £30m.
In addition, a short Docklands Light Railway link between Stratford
domestic and international railway stations could also be incorporated
into this project, enabling through services between the Eurostar
station and London City Airport. More importantly, the link would
also serve the railway land around the existing Stratford station,
which has considerable potential for development.
34. In all, the three possible extensions, to London
City Airport, to Woolwich Arsenal and over the North London line
to Stratford International station, might eventually increase
the number of passenger journeys made on the Docklands Light Railway
to close to 100 million per annum.
Light rail's potential
35. There is considerable potential, according to
DLR Ltd, for further conversion of suburban heavy rail services
to light rail operation: particular opportunities exist around
Manchester and Glasgow. Light rail services are more cost effective
than heavy rail (the Docklands Light Railway requires a subsidy
of only 4 pence per passenger kilometre) and use vehicles which
are more appropriate to the amount of demand. In any event, light
rail services can carry up to 8,000 to 10,000 people per hour
per direction, which is of a similar magnitude to the capacity
of heavy rail. DLR Ltd emphasised the benefits which would be
gained by franchising bus routes which feed the light rail system
as part of future light rapid transit projects.
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