17. One of our witnesses spoke lyrically about the
allure of "shiny steel rails"
in attracting investment to areas served by high quality, permanent
local transport. The pteg report from Steer Davies Gleave notes:
There is a lot of literature on the economic
impact of tram schemes, although surprisingly little formal and
consistent monitoring of the effects of individual schemes.
Similarly, the NAO recommended:
In conjunction with promoters, the Department
should commission a comprehensive evaluation of the costs and
benefits of every light rail scheme it has funded after it has
opened to assess whether the expected number of vehicles and other
infrastructure has been put in place, the frequency and speed
of services are as expected, and systems are delivering the other
expected benefits to passengers and local communities.
Costs should be reviewed after one year; benefits, including services,
and patronage and economic and social impacts should be
evaluated after three to five years.
We were surprised to learn that there had been no
consistent evaluation of the regeneration effects of light rail
schemes; we were equally surprised by Mr Rowlands's suggestion
to the Committee on Public Accounts that such an evaluation could
cost between £10 and £15 million.
Our witnesses from the NAO declined to comment on whether this
was reasonable, but conceded that "at first glance £10
million to £15 million seems a great deal of money to evaluate
a light rail system".
When we took evidence from the Minister, Mr McNulty told us that
the Department did intend to commission a comprehensive before
and after evaluation of a suitable scheme, such as the Manchester
18. Evaluation is difficult given the long times
involved, and the many factors involved in such regeneration.
Nonetheless, there is already sufficient evidence, both from the
United Kingdom and from other countries, to demonstrate that light
rail systems have significant regeneration potential, although
a long term evaluation can be expected to give a clearer view
of when light rail is most effective in securing regeneration,
and what can be done to achieve the greatest benefits. We acknowledge
that schemes will not all be equally successful in achieving their
regeneration objectives. Nevertheless, it is clear that some schemes,
such as the Docklands Light Railway or Manchester Metrolink, have
had significant regeneration benefits,
and that this perceived regeneration effect is the aspect of light
rail that is most attractive to promoters, and to local authorities
which hope their area will benefit from a light rail scheme.
19. Merseytravel noted that:
The fact that the capital costs are high provides
longevity and certainty for both the infrastructure and the service
which it will provide. Businesses and communities know that light
rail systems, once constructed, will remain in operation over
the long-term in order to get a return on the initial capital
costs. They will not easily be withdrawn, therefore. This permanence
enables other investments to be made along the route of light
rail systems, which bring major associated social and regeneration
benefits. Light rail is a key driver for economic and social regeneration.
Several witnesses considered that far too little
emphasis was placed on regeneration when schemes were evaluated.
Councillor Richard Leese, the Deputy Chairman of the Association
of Greater Manchester Authorities,
drew our attention to a report published by the Office of the
Deputy Prime Minister in January 2005 which noted:
The most persistent concern expressed
is the failure of transport policies to contribute sufficiently
to urban renaissance and sustainable communities. The concerns
are myriad, ranging from the separation of Transport from Environment,
through the unwillingness to recognise the significance of transport
to urban economic competitiveness, to the failure of government
departments to speak with the same voice, as in the Manchester
Metro case. There are concerns that the failure to invest in and
support transport projects significantly restricts urban, regional
and hence national economic performance.
20. It is clear that light rail attracts investors.
For example Merseytravel told us that Knowsley Metropolitan Borough
Council had been able to use the prospect of Merseytram Line 1
to attract retail investment to Kirkby town centre; similarly,
the New East Manchester urban development company noted that a
new Fujitsu headquarters building had been attracted to their
area because of "the fast, efficient and reliable public
transport connections which Metrolink offers".
Tameside Metropolitan Borough Council noted that:
Major companies including AMEC, Ask Developments
and Watkins Jones have expressly stated that the likelihood of
a light rail system being introduced into the area was a strong
material factor in influencing their recent decisions to invest
in the area. Their proposed investment alone on only three sites
will result in over 5,000 new jobs. Confirmation of the light
rail system will unlock additional investment.
The Nottingham Express Transit also appears to be
attracting investment to the area.
21. The very pattern of settlement in modern London,
which has been strongly influenced by the existence of the London
Underground, and even driven by it, supports the contention that
high quality permanent public transport systems themselves attract
investment. We also note the pteg finding that "there is
clear empirical evidence of the positive effects that light rail
has had on the cities where it has been implemented in the UK."
22. Regeneration depends on planning and transport
authorities working together. As the NAO points out, one reason
why the Sheffield Supertram failed to attract the number of passengers
originally expected was that much of the high density housing
on its route was actually removed between the system being planned
and starting operating.
The number of submissions from local authorities and other groups
in the Greater Manchester Area, and from other areas with light
rail schemes, suggests that local authorities are now working
together to ensure the transport infrastructure is used effectively.
23. For all its advantages, light rail requires expensive
infrastructure. The precise costs depend on the nature of the
scheme: a light rail system using the tracks of a former heavy
rail route is far cheaper than an on-street scheme. The NAO reported
that the cost per kilometre of existing schemes had varied between
£5.4m for the Sunderland extension to the Tyne and Wear Metro
to £21.2m for Phase 2 of the Manchester Metrolink.
24. In contrast, bus services are cheaper to improve,
although their cost advantages can be exaggerated. We also note
that there are very few examples of high-quality guided bus schemes
in operation. Some of us were able to visit the Adelaide guided
bus with the previous Committee. But there are few other examples.
Mr Ambrose of AEA Technology (Rail) told us that there "have
been a number of guided bus experiments, most of which are dropping
by the wayside at the moment, some through unreliability and some
really because they had been found to be unsuitable".
25. We are disappointed that so little appears to
have been done to ensure that real comparisons can be made between
bus and tram. In 2000 our precursors recommended Government assist
in the development of extensive guided bus networks to allow the
viability of the guided bus to be properly assessed.
Yet in March 2005, the Minister told us that the Department had
not made any direct comparison of the success of guided buses
compared with light rail "because there is not a lot, yet,
of guided buses in place and working in any substantive fashion."
This is not for lack of opportunity: Greater Manchester has had
proposals for a guided bus way which have been in existence for
some 6 years without departmental approval.
26. Most of our evidence was clear that although
bus based systems cost less, the potential benefits were lower.
The cost of bus improvements varies widely; the "more tram-like
the bus system, the more tram-like the costs".
As the Institution of Highways and Transportation noted, "The
only effective alternative to light rail to obtain consistency
of regularity and reliability would be some form of fixed track
bus rapid transit."
What Light Rail Can Do For Cities reports that "high-end"
bus based systems with segregated lines, high-quality stops and
electric power through overhead lines can cost 80% of the light
rail system. Greater Manchester Passenger Transport Executive
(GMPTE) has worked out the comparative costs of bus and light
rail on the routes of Phase 3 of the Metrolink. Although bus schemes
would cost about 69% of the cost of the tram systems, and carry
74% of their passenger numbers, they would were likely to remove
from the network only 36% of the cars that a tram could.Table
3: Light Rail and Bus Comparisons, Metrolink Phase 3