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

Memorandum by the Department of the Environment Transport and the Regions (RT 31)

  1.  The Department welcomes the Select Committee's inquiry into light rapid transit systems and the Committee's invitation to submit written evidence.

  2.  This memorandum sets out the Department's role in, and policy on, the development of light rapid transit systems. It deals primarily with light rail systems but covers the more sophisticated guided bus systems which require significant investment in infrastructure such as the proposals for the Merseyside Rapid Transit system being developed by Merseytravel PTE. It does not cover more modest guided bus measures, such as the kerb guided systems in Leeds or Ipswich, which generally cost much less and do not necessarily require approval under the Transport and Works Act 1992.

  3.  In general, and outside London where London Transport have responsibility for public transport, it is for local authorities to determine the role which light rapid transit should play in meeting the transport needs in their areas. Because of the relatively high cost of such systems, and the fact that they cannot generally be built and operated on a commercial basis, local authorities require funding from the DETR for such projects. Grant is available from the Department under section 56 of the Transport Act 1968 and, more recently, from funding provided to support the local authority Private Finance Initiative.

  4.  Applications for funding for light rapid transit systems are subject to appraisal to establish that they represent good value for money for the taxpayer. This appraisal ensures that transit systems can bring wider benefits, particularly in terms of reduced congestion, which cannot be captured in revenue from the operation of the system, and that they contribute to the achievement of the Government's overall transport objectives.

  5.  Light rapid transit schemes generally require powers under the Transport and Works Act 1992.

  6.  In the UK five major light rail systems have opened, with support from the Department, since 1980; a sixth is under construction and support has been committed to a seventh. These are described in the following paragraphs.

  7.  The original Tyne and Wear Metro opened in stages between 1980 and 1984. It cost £284 million (all figures in this paper are at outturn prices unless otherwise stated), some two-thirds of which was met by central government grant. An extension to Newcastle Airport opened in 1991, most of the £12 million cost being met by the Passenger Transport Executive (PTE), which owns the system. In December 1998 the Department provisionally agreed to fund an extension to Sunderland and South Hylton, subject to a satisfactory appraisal ensuring value for money. A final decision on funding will be announced shortly.

  8.  The first phase of the Docklands Light Railway in London opened in 1987, the £77 million cost being met by London Transport with Government assistance. The Bank extension opened in 1991, and cost £294 million (including upgrading the system). The Beckton extension opened in 1994, the majority of the cost of £280 million being met by the London Docklands Development Corporation from land sales. The Lewisham extension is due to open by the end of this year.

  9.  Manchester Metrolink (linking Bury and Altrincham) opened in 1992. Most of the £140 million capital cost was met through DETR grant and credit approvals. It is owned by Greater Manchester PTE, which let a design, build, operate and maintain (DBOM) contract to a consortium of GEC-Alsthom, Mowlem, AMEC and Greater Manchester Roadcar. An extension to Salford Quays and Eccles is due to open later this year (Salford Quays) and in early 2000 (Eccles). Of the capital cost of £160 million, the majority came from the private sector, and the rest from the sale of the PTE's bus companies, Capital Challenge, and the European Regional Development Fund (ERDF). The contract to build this extension and to operate the entire system, including the Bury-Altrincham line, was won by Altram (Manchester), a consortium of Ansaldo Transporti (an Italian vehicle manufacturer), John Laing, the Serco Group and the 3i Group.

  10.  South Yorkshire Supertram in Sheffield opened in stages in 1994 and 1995. It was promoted by South Yorkshire PTE. Most of the £240 million capital cost was met through DETR grant and credit approvals. The system was intially operated by a PTE-owned company, which was sold to Stagecoach in December 1997. The infrastructure remains under the PTE's control.

  11.  Midland Metro Line One (linking Birmingham and Wolverhampton) opened in May 1999. It was promoted by West Midlands PTE (Centro). A DBOM contract was let to Altram, a consortium of Ansaldo Transporti (an Italian vehicle manufacturer), John Laing, and Travel West Midlands (owned by National Express). Over half of the £145 million capital cost was met through DETR grant and credit approvals, and most of the balance from the European Union, West Midlands Passenger Transport Authority, Altram and the local authorities.

  12.  In addition, Croydon Tramlink (linking Wimbledon, Croydon and Beckenham) is under construction and is due to open later this year. It is being built under a DBOM contract won by Tramtrack Croydon (a consortium comprising CentreWest, McAlpine/Amey, Bombardier and Royal Bank of Scotland), at a cost of £200 million of which £125 million has been provided by the DETR.

  13.  The Department announced in December 1998 funding of £167 million for a new tram system in Nottingham (Nottingham Express Transit) under the Private Finance Initiative. The preferred bidder is Arrow, a consortium of Tarmac, Adtranz, Transdev (a French transport operator), and Nottingham City Transport (a bus operator owned by Nottingham City Council). Negotiations between the City Council and Arrow to finalise the deal are continuing.

  14.  From the provisional local transport plans recently submitted by local authorities, the Department is aware of the following proposals for light rapid transit schemes in England:

Type of System
Statutory Powers Obtained?

Manchester Metrolink extensions to Oldham and Rochdale, Ashton-under-Lyne, Manchester Airport, Lowry Centre, East Didsbury and Trafford Park
Light rail
Midland Metro extensions in Birmingham city centre, from Wednesbury to Merry Hill and Brierly Hill, and loop around Wolverhampton town centre
Light rail
South Hampshire Rapid Transit initially linking Portsmouth, Gosport and Fareham
Light rail
Inquiry held.
Inspector's report submitted to DETR
Leeds: proposals subject to consideration of funding sources including revenue from road user charging
Light rail
Bristol and South Gloucestershire linking central Bristol and Almonsbury
Light rail
Merseyside Rapid Transit
Being reviewed
Order refused
Central Hertfordshire Passenger Transport System linking Watford, St Albans and Hatfield
Possibly guided light transit

  15.  A separate memorandum from London Transport describes the possibilities for various new schemes in London.

  16.  The Government's policy on light rapid transit was set out in the White Paper on Integrated Transport "A New Deal for Transport: Better for Everyone" published in July 1998.

  17.  In essence, the Government recognises that light rapid transit can have a part to play in integrated transport strategies in urban areas. But with their high costs, particularly for conventional light rail schemes, and other pressures on the Department's local transport capital budget, the White Paper warns that priority will be given to funding packages of more modest transport measures which spread benefits more widely, and that light rapid transit systems will only be supported if they represent good value for money and form an integral and necessary part of a strategy in a local transport plan.

  18.  The introduction of powers for local authorities to introduce road user and workplace parking charging schemes, and the commitment to ring fence revenues from such schemes for improvements to local transport, offer the prospect of significant additional resources for local authorities, and the White Paper encourages authorities planning to develop light rapid transit systems to consider funding them from the revenues generated by such charging schemes.

  19.  This approach to future support for light rapid transit systems was reflected in the guidance issued to local authorities on provisional local transport plans in April this year.

  20.  The Department monitors the impact of light rail schemes which it has funded. The results of research jointly commissioned with Greater Manchester PTE into the impact of Manchester Metrolink were published in 1996 (Metrolink Monitoring Study: an independent report by Oscar Faber). A similar study on South Yorkshire Supertram is due to be published shortly and studies are being carried out on Midland Metro and Croydon Tramlink.

  21.  The Department collects information on the use of light rail systems which is published annually in Transport Statistics Great Britain (Tables 5.20 to 5.24 in the 1998 edition).

  22.  The Department also supports some research and development work on light rapid transit systems. It has commissioned work on the range of technologies available for moving people in cities comparing capacity and whole life costs for a range of transport modes (Review of PeopleMover Technologies in Urban Areas, March 1997), and on appraisal methods, financial support mechanisms, performance, and the use of complementary measures, for a range of light rail systems around the world (Light Rail and Complementary Measures, by Environmental and Transport Planning, May 1998).

  23.  The Integrated Transport White Paper identified a role for new technology in delivering transport solutions and committed the Government to supporting promising technologies, trials, and pilot implementation projects. In the field of light rapid transit, the DETR has set aside funding of £2.7 million, spread over three years, to assist in developing innovative systems beyond the design stage. Having invited expressions of interest, the Department has invited two applicants to submit full bids. These are Alsthom, for an electronic vehicle guidance system for use with buses, and Bristol University, for a personal rapid transit system using automatic vehicles on a guideway.

October 1999

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