Supplementary memorandum by the Department
of the Environment, Transport and the Regions (RT 31A)
LIGHT RAPID TRANSIT SYSTEMS
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 GovernmentNottingham
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
|