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

Supplementary memorandum by the Department of the Environment, Transport and the Regions (RT 31A)


  Following my appearance before your Committee on 1 March, I am writing to provide the further information requested, as helpfully listed in the Committee's letter of 3 March to my Department.

1.  A comparison of the costs of using different forms of funding for light rapid transit schemes (Q377)

  I can best respond to this by referring to the two light rail schemes approved by the present Government—Nottingham and Sunderland. The relevant guidance is a note by the Treasury Taskforce (How to construct a public sector comparator). For Nottingham, the analysis carried out prior to approval of the project in principle as a private finance initiative (PFI) scheme in December 1998 suggested that, while the benefit:cost ratios of conventional public procurement and PFI were similar, PFI was preferable because it transferred certain risks to the private sector. My Department is currently updating this analysis, in consultation with the scheme's promoters, now that their negotiations to finalise the project's details with the preferred bidder are nearing completion. For the Sunderland extension to the Tyne and Wear Metro, the PFI procurement route was explored. However, my Department concluded that, owing to contractual difficulties, conventional public procurement was the most appropriate funding route.

2.  Typical bid submitted for funding an LRT scheme and Department's analysis of it (Q379)

  A typical bid is of the order of 40-50 pages long, and contains a detailed cost-benefit appraisal of the scheme together with explanatory and background material. A dialogue then takes place with my Department, as a result of which revisions to the appraisal are made. The outcome is usually a report by my Department, containing a table on the lines of Annex 1.

3.  Utilities' contribution towards cost of diversionary works (Q384)

  When the contribution of 18 per cent for diversions arising from major works was agreed between utility and authority representatives, ahead of the enactment of the New Roads and Street Works Act 1991, light rail schemes were not covered by that agreement. In the subsequent discussions the utilities argued that such schemes should be treated as other statutory undertakers and subject to the "disturber pays" rule that applies between undertakers. The public transport promoters, however, contended that they were in the same position as the highway authorities, and should be entitled to the same contribution towards diversionary works costs.

  The reduced rate of 7.5 per cent for contributions which will apply to light rail and tramway projects, confirmed in my written PQ answer dated 17 January this year, aims to strike a balance between the legitimate different interests. In part it reflects the fact that light rail infrastructure such as the track bed, stations and power line columns make it more difficult for utilities to assess their equipment than when that equipment is under the normal highway. Exceptions are provided for work that would be classified as "major highway work" or "major bridge work", if that work was carried out by a highway of bridge authority. Examples would be moving a kerb line or remodelling a junction. This will still attract the 18 per cent contribution.

  The overall effect of the changes is likely to reduce the contribution to be made by utilities by typically 1 per cent of the cost of a scheme. To the extent that this adds to the "funding gap" for the scheme, it would be eligible to be considered for grant of PFI credits from Government, and, if such funding were approved, the additional costs would not fall to the promoter.

4.  Light rail's success compared to bus in attracting motorists out of cars (Q402)

  Your Committee is already aware of the studies of the transport effects of the Manchester Metrolink and South Yorkshire Supertram schemes. Both of these contain some information from surveys on the perceived attractions of the light rail system to different categories of user. Household surveys in Manchester showed that car users, along with users of other modes, viewed reliability and frequency as the two most important aspects of public transport, followed by speed in the case of car users (see volume 1 of report, chapter 9). In Sheffield's on-board surveys, car users who chose Supertram cited the relaxing nature of the journey as the most important factor (see paragraph 3.29 of report). The fact that Supertram's routes and frequencies are much more readily understandable to inexperienced public transport users than those of buses may also have been a factor (see paragraph 3.55). Stated preference surveys across all systems show a preference for light rail as against bus. This preference is likely to be reflected in choice of mode. We have no comparable studies for bus based systems.

5.  LRT schemes' economic development effects compared to bus (Q407)

  My Department is aware of the following published studies of the economic development effects of UK LRT schemes, as regards actual rather than forecast effects.

    —  Transport Research Laboratory study of Tyne and Wear Metro.

    —  Salford University study of Manchester Metrolink.

    —  Sheffield Hallam University study of South Yorkshire Supertram (forthcoming).

  We are not aware of any studies of bus-based systems. Nor do we have a list of studies of systems abroad. As regards Portland, Oregon, which you specifically asked about, Portland's public transportation authority claims that more than $2.4 billion dollars has been invested in new developments within walking distance of light rail stations.

6.  Guidance (Q415)

  My officials have now sent the Committee a copy of the Best Practice Guidance on Local Transport Plans (LTPs).

  Should the Committee have any queries on this information, please contact my Department's Local Transport Policy Division.

Keith Hill

Parliamentary Under-Secretary of State

15 March 2000

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