Memorandum by Liverpool Electric Tram
Systems (RT 41)
INTRODUCTION
With most of the UK transport system in the
private sector, new ways need to be explored to promote and fund
infrastructure based urban public transport systems that are proven
to attract commuter car trips and so reduce urban environmental
impacts. LETS Ltd in Liverpool has addressed this issue and is
promoting a demonstration tramway on a commercial basis, without
the need for Central Government Grant Aid. The first line between
the city centre and Liverpool Airport awaits approval for Outline
Planning Permission. The second and third lines are in preparation
for an ultimate eight line network.
The present statutory planning process for infrastructure
based public transport distorts the commercial market, compared
to the ease of entry for bus services, as well as distortion by
indirect subsidies given to bus operators by the rebate of fuel
taxes and the free use of public roads. Reducing of barriers to
entry and the equality of treatment between different transport
modes needs to be addressed. A rapid adoption of electric traction
must be achieved, to attract motor car commuters and reduce congestion,
and urban air pollution. This is important if global warming is
to be avoided and public health improved. The strength of the
private sector needs to be harnessed, by reducing the actual and
perceived risks to entry. At the present rate of progress it will
take 100 years to electrify most cities. By the LETS approach
significant progress could be achieved in 20 years.
1. THE URBAN
TRANSPORT MARKET
Professor Buchanan observed in the 1963 "Traffic
in Towns" Report that the suppressed demand for car use in
urban areas is very high. So high that any new urban road will
always fill with traffic, without any reduction in congestion.
This is a classic example of the economist cost-demand curve.
New roads reduce the cost of driving and therefore increased demand
generates new traffic. Indeed the Public Inquiry into the London
Motorway Box showed in the 1970s that the Box would increase traffic
on local roads as a result of traffic generated by the motorway.
There would thus be an increase in congestion. Buchanan's 1963
case studies showed that full motorisation would only be possible
in towns of under 100,000 population, assuming that car parking
space could be released.
Unfortunately the growth of motor traffic, and
the earlier conversion to buses of tram and trolleybus services
has generated a burden on air pollution that has reached "Los
Angeles" proportions in many cities. This is especially so
during periods of atmospheric inversions, like the December 1991
incident in London which led to an increase in cardio-respiratory
deaths. Many UK cities now experience a significant number of
days when air pollution is above the World Health Organisation
danger level (at which health is threatened) for a significant
number of days per year. In Liverpool this is about 50 days pa.
Motor traffic is now the main air pollution source in UK cities.
Factories with the air quality of many urban roads would be closed
by the Factory Inspectorate.
Presently there is no mechanism to feed back
to motorists the costs of the environmental damage from urban
car traffic. Indeed the experiment last year in Leicester to find
the level for a congestion toll that would deter or divert commuting
car trips was abandoned when motorists showed that an £8
per day toll would not reduce significantly the volume of traffic.
The annual real increase in the price of petrol introduced by
the last Government was aimed at reducing carbon dioxide emissions
in line with the Rio (and Kyoto) Treaties. This petrol price increase
has not reduced car travel, nor even reduced the rate of increase
of car travel. Nor is it targeted at the use of motor cars in
urban areas.
Ironically although the volume of urban traffic
has growth continuously for the last 30 years, the number of trips
made per week has remained virtually constant at about 21 per
person. People have exploited the real reduction in motoring costs
by making longer trips, especially by living further away from
places of work. At the same time a number of enterprises and institutions
have also exploited the widespread availability of motor cars
by rationalising activities onto few but larger sites to generate
scale economies. This itself increases the average length of access
journeys. The example of supermarkets is well known but hospitals,
schools and government departments have also rationalised, or
centralised, at the expense of the poor who cannot travel by car
and suffer therefore social exclusion.
2. WHY CAR
USE HAS
GROWN
The growth of car traffic is due to the real
reduction in the cost of motoring over the last 20 years. At the
same time the real cost of using public transport has increased.
This growth has created rising congestion, kept tolerable until
recently by traffic management and a natural equilibrium of traffic
speed, which in London has little changed in the past 100 years
at about 11mph. Indeed Mogridge has postulated that the only way
to increase road traffic speed is by increasing the average speed
of public transport services. Faster public transport services
attract marginal car trips, releasing capacity to enable the remaining
traffic to drive faster, up to the new equilibrium speed set by
faster public transport.
In Britain the opening of new urban roads, whether
the widening of Park Lane in London or town centre "relief"
roads, have had the effect of attracting marginal public transport
users to car travel, taking up the new capacity until the old
equilibrium speed is attained. The Pimlico Precinct traffic project
of the late 1960's showed that the elimination of "rat running"
routes through Pimlico resulted in no measurable increase in traffic
on adjoining roads. The closure of the City of London to through
traffic after the IRA bombing campaign, again resulted in no significant
increase in traffic on roads outside the city. More recently the
closure of Hammersmith Bridge for over a year for repairs, displacing
35,000 vehicles per day, led to no significant increase in traffic
elsewhere.
The growth of car traffic in the UK has been
in line with the growth of car ownership. Britain has a level
of car ownership somewhat lower than that in Austria, Belgium,
Denmark, France, Germany, Holland, Italy, Sweden and Switzerland.
Yet car usage in the UK is higher per capita and public transport
patronage lower per capita than those other countries. Now that
"predict and provide" is no longer the guiding objective
for road traffic planning, the experience in other European Countries
can help to show how the link between car ownership and car usage
may be weakened.
3. ATTRACTING
CAR USERS
TO PUBLIC
TRANSPORT
There is considerable market research which
shows why people stop using public transport and indicates what
would be required to win them back. Rarely is price the main determinant,
since many people spend up to 15 per cent of household income
on the ownership and use of their private car, and those who do
not have cars have been increasing their use of taxi, in place
of cheaper bus travel. Three factors normally rank very highly.
These are service dependability, frequency and reliability. In
trying to determine what influences household locational decisions,
up to 90 per cent would locate near an electrified rail service,
50 per cent to a diesel rail service, and less than 10 per cent
to a bus service. The long term dependability of public transport
is crucial if people are to be attracted to public transport,
since moving house or jobs requires the certainty that the service
will be there in five or 10 years' time. Frequent services, with
short waiting times and the need not to know the timetable are
highly rated. Finally service reliability, knowing departures
will be on time, so that people can arrive punctually for work,
or school.
This is almost the opposite philosophy of many
bus companies which have aimed at aping the door to door nature
of car journeys, by offering a large number of routes, over a
diffused network, at low frequencies, in the belief that people
will not change routes. Indeed towns with bus only public transport
systems have lost patronage faster than those with rail systems.
Runcorn new town provides an interesting case study. A dedicate
busway has since 1967 offered a level of bus service far better
than traditional towns of 70,000 people. Yet bus use in Runcorn
has declined as fast as other similar sized towns. There would
appear to be an intrinsic market reluctance for people with cars
to use buses. Those same people are happy to use rail services.
Motor car companies spend considerable sums
in market research to identify and supply the combination of features
that attract people to buy their cars. Together the motor industry
spends about £25 in advertising for every £1 spent by
all public transport services in the UK. Public transport enterprises
have in the past been production rather than market orientated.
There are now signs that the new public transport suppliers are
beginning to research and respond to market conditions. Since
without that the generic market for public transport based on
the trends of the last forty years would be for a further decline,
as has occurred in America where less than 3 per cent of personal
travel is by public transport, including internal air services.
4. WHY RAIL
SCHEMES ARE
UNAFFORDABLE
Until recently all new or improved rail schemes
have been promoted and funded by the public sector. The objectives
of public sector scheme have rarely been commercial, since the
availability of "free" capital from the public sector
has a distorting effect on the design and equipment of rail systems.
Objectives of urban regeneration and even vote winning have sometimes
been the driving forces behind schemes. The equipment suppliers
have also been influenced by the availability of public funding
in failing to innovate or in finding ways to reduce costs. Indeed
the idea of a captive, if small, public sector market gives some
of the major suppliers a secure and profitable outlet for their
products. The contrast with North America where private mainline
railways have demanded lower locomotive costs and better products,
leading to General Motors and General Electric being able to supply
better diesel locomotives to the UK, at lower prices than European
manufacturers.
If urban public transport is to break out of
the spiral of decline of the last thirty years when car costs
have fallen and public transport prices risen, then new more cost
effective equipment and methods of operation will be needed, not
based on operational considerations but reflecting market requirements
and those factors which are crucial in winning car users back
to public transport. Indeed the view that buses are cheaper than
trams needs to be seriously reviewed (appendix one).
5. THE LETS PHILOSOPHY
LETS has created a package of software and hardware
that aims to provide urban rail services on a commercial basis.
This means that some new rail lines could be built without the
need for capital grants from Central Government, or revenue subsidies.
To achieve this LETS must provide services that satisfy market
aspirations to maximise revenue, and matches the capital investment
required only sufficient to meet the immediate expected demands,
and capable of being operated at a profit large enough to service
the capital debt.
This philosophy has been refined over 12 years
of market research and product development[6].
The starting point for LETS is to serve only existing and measurable
demands. LETS cannot promote urban rail lines in order to satisfy
long term urban regeneration objectives, or other political aspirations.
On the other hand LETS can help Local Authorities achieve road
traffic reduction targets, by means of co-ordinated investments
between the private capital of LETS light rail services and publicly
funded traffic calming measures.
The second strand of LETS is to reduce risk
into manageable steps, given the present and unpredictable, and
burdensome statutory planning procedures. Thus to reduce risk
and costs in Liverpool LETS has applied for Outline Planning Permission
for its first planned line. This will establish an "in-principle"
agreement for the construction of a new rail line. This is a relatively
simple procedure, although as a first ever in the country, a year
has elapsed since the application was submitted. LETS hopes that
the second and subsequent Outline Planning Application will be
processed more quickly, once a precedent has been established.
The next stage will be an application for Detailed
Planning Permission, when the location of tracks, stations, access,
highway arrangements etc will be approved by the Local Planning
Authority. The final step will be an application for an order
under the Transport & Works Act 1992 for the technical powers
to operate rail vehicles, erect equipment, immunity from nuisance
prosecutions etc. By splitting the statutory procedure into three
distinct stages, the private investors in LETS are faced with
reducing risks but increasing expenditure. If the private sector
is in future to bear the burden of promoting new rail projects,
then the statutory process will need to be reviewed, the costs
reduced and the risks made more predictable.
In the experience of LETS, as a pioneer private
sector urban light rail system promoter, the statutory approval
phase is likely to be the longest, most convoluted and in relation
to the total investment disproportionally expensive. If rail is
to play a larger role in urban transport, the cost of entry for
private promoters will need to be reduced, or the risks eliminated.
The planning philosophy for LETS is to reduce
the capital costs, below the full cost of bus services, to that
which can be serviced by the anticipated revenue. This means no
tunnelling, and surface operations along existing rights of way,
since creating new rights of way is very costly and disruptive
to the urban fabric. The majority of existing rights of way in
towns are roads, where the majority of personal movements are
made. The majority of the LETS target market drive cars along
those roads, which therefore provide natural and convenient corridors.
Finally LETS as a friend of the environment
sees electric traction both as a way to reduce air pollution and
also to provide a degree of market re-assurance needed to attract
permanently long term car commuters, who will be prepared to (re)build
their life style around electric rail systems. Car commuters switching
to light rail and tram services will help to improve the health
of urban areas. In order to satisfy this commercially, LETS is
part of the development of an affordable British light rail vehicle,
which has been on test since 1997.
6. A NEW "LEVEL"
PLAYING FIELD
If the private sector is to make rational choices
in investing to improve urban public transport systems, then the
regulatory cost of entry should be the same irrespective of different
methods of transport. Presently an enterprise can for example
introduce a new bus services giving 42 days notice to the Traffic
Commissioners. This right is automatic, and bus routes can be
registered along any road on which there is no Traffic Regulation
Order banning heavy road vehicles. There is no need for an environmental
impact assessment, even though diesel buses are noisy, produce
significant air pollution and create ground vibrations. In comparison
an enterprise wishing to introduce the same sized buses along
the same route but powered by overhead electric wires, as a trolleybus
service, will need an Order under the Transport and Works Act
1992, costing about £1 million and presently taking over
30 months on average. This provides no incentive for bus operators
to consider other technologies, even though trolleybuses are quieter
than diesel, emit no air pollution and therefore will help to
reduce the level of urban air pollution. Indeed there is a regulatory
entry cost against environmentally benign trolleybuses.
To create a level playing field, either the
approval procedure for infrastructure based systems(eg trolleybuses,
tramways and light rail) should be simplified to that of bus service
regulation. Alternatively bus registration should be as difficult
and costly as a Transport and Works Act Order. Possibly a new
system for urban public transport approvals for street based systems
could be somewhere between these two but the same irrespective
of the transport technology.
As a result of the experience of LETS to date,
a bus type 42 day registration system would be the most attractive
to the private sector. Here the system promoter would obtain an
Operator's Licence from the Traffic commissioners, demonstrating
professional competence, financial strength and a satisfactory
maintenance system. After gaining the Operator's Licence, the
promoter would give 42 days notice of the intention to build an
new system, eg trolleybus or tramway line.
The alternate approach would mean that bus companies
would need to apply for an Order under the Transport and Works
Act 1992, submitting Parliamentary Plans, Book of Reference and
an Environmental Impact Statement. Then the bus operator would
face the risk and cost of a public inquiry and up to two and a
half years before a new service (or service alterations) could
be introduced. This would immediately reduce the instability in
the bus network outside London but would mean that only the big
five bus companies could afford to start new routes. Existing
small bus companies would enjoy "grandfather" rights
on existing routes.
The third alternative could be to require all
urban road based public transport to seek planning permission
and thus restore to Local Authorities an input into public transport
planning, lost with bus deregulation in 1986. This would apply
equally to bus, tramway, light rail and trolleybus proposals where
the right of way is an existing highway. Other aspects of road
operations (eg, signage) could also be brought under planning
control, and remove a number of other anomalies.
There is a statutory three month determination
period for planning applications. This increase for bus services
from the present 42 days would reduce the turbulence in the bus
system and slightly increase the cost of entry for new bus services.
On the other hand it would enable bus operators to diversify into
environmentally more benign forms of urban transit, proven to
be acceptable to the growing target market of urban car users.
If a significant switch from car use to public transport is to
be achieved, then services which are acceptable to car users will
need to be provided, in a commerically affordable way, in order
to release the necessary investment capital within the private
sector.
7. THE LETS LIVERPOOL
PROJECT
To test the LETS philosophy an application has
been made to Liverpool City Council for Outline Planning Permission
to build a tramway between the City Centre and Speke, serving
the airport en-route. The length of this first line is some 16km,
and for about half the route abandoned tramway medians in dual
carriageway roads will be re-activated. For the other half, conventional
street tramway operation is proposed, with a large degree of priority
over the other road traffic and pre-emption of traffic signals
at road junctions. The cost of this for planning purposes has
been estimated at £34 million.
The proposal has been developed over five years
through a Feasibility Study and Business Plan. The first line
has been selected as it will serve the most affluent districts
of South Liverpool, with the highest level of car ownership and
the most economically active proportion of population. This provides
a mobile personal travel market, LETS services operating every
six minutes right into the centre of Liverpool and out to the
Airport. The end to end journey time will be about 30 minutes.
Low height platforms at every station will give
level entry into the low floor electric rail vehicles LETS plans
to use. From the start the LETS system will fully satisfy the
Disabled Discrimination Act 1995. Already in planning are subsequent
lines, to form an integrated network in Merseyside, including
the use of the Ring Road (Queens Drive) 6 km from the city centre,
and the Queensway Tunnel to improve public transport links between
the Wirral and Liverpool. The new tramway will provide interchange
with existing Merseyrail stations. LETS will encourage Merseytravel
to open new stations at other strategic intersections. By this
means nearly 85 per cent of Liverpool's population will be within
500 metres of a rail service compared to the present 15 per cent.
Further the LETS network will be able to cater conveniently for
the 70 per cent of Liverpool trips which presently are suburb
to suburb and made by car.[7]
8. IMPLICATIONS
FOR OTHER
CITIES
The LETS philosophy is to deliver commercially
orientated tramway or light rail systems, funded by the private
sector and rewarded out of passenger revenue. This will have important
implications for other congested English and Welsh Cities. The
proven ability of light rail and tramway systems to attract car
traffic, coupled with the ability of private sectors to promote,
construct, equip and commission without the need for public funding
will clearly make new systems deliverable throughout the Country,
while responding to market requirements.
With a more even handed statutory approval procedure,
bus operators can use existing investment programmes for bus replacement,
to construct tramway systems. At the same time this improves the
local public transport product, is known to be effective in the
local travel market and thus help reverse the historical decline
of patronage since 1955, by attracting car trips. This can be
clearly demonstrated by the traffic success of the Manchester
Metrolink.
Indeed the improved manpower productivity of
trams coupled with non-transferable skills, means that public
transport enterprises facing increasing staff shortages, can carry
more passengers with a more stable workforce. Evidence from tramway
systems on the Continent and in America shows that tram drivers
are loyal and stay on average more than twice as long as bus drivers
in the same undertaking. This workforce stability also helps the
economics of urban transport enterprises, by reducing the costs
of staff recruitment and training.
The recent experience of light rail schemes
in the UK have all been publicly promoted and financed. New schemes
have been controlled not by urban need but by the willingness
of the Treasury to release on average £100 million in grants
for each new scheme. This has translated to one new light rail
system every two or three years. At this rate of progress it would
take a century for every urban area over 200,000 population to
have a single light rail line, let alone a network.
The LETS package which is privately financed
without Government Grants, redraws the funding barriers for new
schemes. The LETS philosophy enables the private sector to identify
profitable lines and then raise the necessary finance from the
capital market. Inevitably the first LETS commercial line will
be the hardest to achieve, as credibility barriers and past experience
have to be re-learnt. Once confidence has been established from
the first commercial line in operation, this will enable capital
markets to respond to the investment opportunities identified.
It would be wholly practical for the private capital market to
fund two or three new lines every year, and the majority of the
Country being equipped with light rail systems within 20 years.
A rapid conversion of urban public transport
technology can be compared to the historic experience of the conversion
from horse to motor bus at the turn of the century, and from tram
to trolleybus in the 1930's. Such investment programmes will create
opportunities and strains for the construction, manufacturing
and supply industries. For example the demand for tramcars is
likely to rise to about 100 pa, and about 50km of tramway being
built pa. Given the slow down in road construction and the large
size of that industry, the resources required for tramways are
relatively modest, eg a mile of urban motorway costs more than
a fully equipped tramway 10 miles long, which can carry five times
more passenger traffic. Indeed new tramways will provide new challenges
for supply companies, to find more economical techniques of construction
and manufacture. Given the single European Market, there are also
many enterprises in France, Germany, Holland and Italy, that have
the required experience and capacity. This will be competition
for UK companies but may also be the opportunity for forming alliances
to gain the necessary know-how.
A larger tramway industry will generate economies
of scale and lead to lower unit costs. This will make more urban
routes viable for the LETS commercial tramway treatment. As soon
as second and subsequent lines are added, creating networks, a
synergy of demand develops, not only by rewarding the new line
but adding extra traffic, at a marginal cost, to existing lines.
Such new tramways operated by bus companies will provide market,
operational and economic incentives to co-ordinate services, integrate
timetables, simplify revenue systems and make the total system
more user friendly, which the bus industry has singularly failed
to do over the last 30 years.
The most recent experience of new tramways opened
in France, shows that the tramway carries up to three times more
traffic than the bus route replaced, and that the connecting bus
routes increase their patronage proportionately, so that the whole
network traffic increases.
Finally the public sector has been effectively
removed from its former role as a supplier of public transport
service. Privately promoted light rail and tramways deliver a
number of benefits which can be captured by the public sector.
These benefits include: reduction in motor traffic, decrease in
air pollution and improvement of health, and a catalyst for planning
regeneration in the medium term. It has been well established
since a pioneering study on the Yonge Street Line in Toronto in
1955, that high quality fixed track public transport has the
effect of raising property values along the route, and especially
around stations. This raising of values will be translated into
higher rate income for the local authority. Secondly fixed track
public transport system act as a magnet for new development, which
by clustering around stops and stations will help to meet the
aims of PPG13 for concentrating urban development and encouraging
the use of public transport.
9. PARLIAMENTARY
ACTION
Often in the past Parliament has not been seen
as a promoter of innovation and economic development. Given that
over 90 per cent of the UK's public transport system is now in
the private sector, Parliament's role is not per se to discriminate
between different forms of public transport but to ensure that
all forms operate on a level playing field so that market forces
can effectively work. Similarly Parliament must protect the public
by the enforcement of equal safety standards, and that harmful
environmental emissions (eg air pollution and noise) are reduced
and eliminated.
Presently there is a large gap between the entry
barriers for new diesel bus services and infrastructure based
public transport. Equalising these barriers will release private
sector funding to invest in less polluting electric public transport,
proven to attract private car users and thus create useful secondary
reductions of pollution. The high risks associated with the Transport
and Works Act 1992 procedures, in comparison to the automatic
42 day registration of new bus services provides no incentive
for bus operators to innovate and indeed encourages the old mentality
of depending on public subsidies.
Given such an equalisation of entry barriers,
the private sector is capable of generating sufficient investment
capital to cover most if not all commercially viable tramway projects
in the UK, with little need for any public sector capital grants.
Transport services responding to market forces should ensure the
most efficient and beneficial allocation of capital. Indeed just
as Local Authorities take steps to attract private investors to
create new jobs or to set up factories, in the new privately owned
public transport future, local authorities wanting to achieve
transfers of car traffic to environmentally friendly tramways,
will try to attract such investment with packages of priority
and pre-emption over general road traffic.
In the absence of acceptable quality public
transport, measures to force private cars off urban roads are
likely to be counter productive. The failure of the Nottingham
Zone and Collar scheme in the mid 1970s should act as a warning.
Experience on the Continent where investment in improving the
quality and speed of public transport, preceded traffic calming
measures, making those measures both natural and acceptable.
There is one further area where Parliament may
consider its role and that is in setting standards for air pollution,
urban noise and traffic volumes, to guide local authorities in
achieving their responsibilities in Local Agenda 21. The setting
of targets will also help to measure the success of policies to
reduce pollution, especially greenhouse gas emissions. The Road
Traffic Reduction Acts of 1997 and 1998, and the Environment Act
1995 give Local Authorities ill defined duties, and no objective
measures for achievement. Given that the UK is committed to the
Kyoto Treaty targets for greenhouse gas reduction, it would be
sensible to translate these into local standards. Similarly standards
for other and health threatening air pollutants should be no more
difficult than the creation of smokeless zones 40 years ago under
the Clean Air Act 1956.
10. CONCLUSIONS
The last 50 years of publicly owned public transport
has coincided with a significant reduction of urban bus use and
an increase in private car traffic. Urban motor traffic is now
the largest source of air pollution, which has increased illness
and death, and creates congestion, which reduces the efficiency
of the national economy. In comparison with many continental countries
the UK has lower per capita ownership of cars but higher car use
and lower public transport patronage.
In 1999 over 90 per cent of the UK public transport
system is in the private sector. This is unlikely to change in
the near future. In order to energise the private sector to invest
in commercial tramway and other environmentally friendly forms
of public transport, the risk associated with promoting and the
barriers to entry will have to be reduced. If bus companies are
to rise to the challenge of new technologies, then the entry conditions
must be equalised between diesel bus and infrastructure based
systems, this includes the subsidies given to bus services through
the DERV tax rebate and the use of public roads without payment.
Logically there cannot be more publically promoted light rail
projects, which then operate in competition with commercial bus
(or tram) services.
Parliament can create the conditions needed
to release private investment into new infrastructure based public
transport. Parliament can also set environmental targets for local
authorities to achieve, especially for road traffic reductions
and air quality improvements. A partnership between these approaches
is a sound way for the UK to enjoy high quality integrated public
transport and healthy urban environments.
Professor Lewis Lesley
October 1999
6 Electrifying Urban Public Transport International
Conference 17 and 18 November 1987. Back
7
Merseyside Business Project-Volume 14, Number 1, July 1999. Back
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