Memorandum by D Scott Hellewell (LR 25)
INTEGRATED TRANSPORT: THE FUTURE OF LIGHT
RAIL AND MODERN TRAMS IN BRITAIN
1. INTRODUCTION: INTEGRATED
TRANSPORT
1.1 The Transport Committee is undertaking
its inquiry into Light Rail as part of an overarching inquiry
into Integrated Transport. By way of introduction, and to assist
Members in settling the scene, it may be helpful to provide a
brief description of Integrated Public Transport.
1.2 Integrated Public Transport is where
all the different types (modes) of public transport—bus,
trams, trains, ferries—and all operators work together in
some framework, whereby their individual services are operated
to complement each other. The integrated public transport network
is then marketed as one network with a fares and ticketing system
to cover all operators and modes, thus permitting free and easy
interchange. Such a network offers a realistic alternative to
the private car for many journeys. The 1968 Transport Act and
the PTA/PTEs were established for this very purpose, as was TfL.
1.3 Good examples of integrated transport
exist throughout Continental Europe, Scandinavia, Boston, New
York and San Francisco and Toronto.
2. THE COSTS
AND BENEFITS
OF LIGHT
RAIL
2.1 Costs
2.1.1 These arise under the following headings:
Promotional Costs, Bidding Costs, Capital Costs, Operating Costs,
Finance, funding & fees.
2.1.2 Promotional Costs are those
incurred by the Promoter, usually a PTE or a Consortium of Local
Authorities, eg South Hampshire Transit. They are the costs involved
in planning the LRT scheme and the preparation of documents required
to make a submission for an Order under the Transport & Works
Act (TWA) 1992. Documentation will include alignment plans and
cross-sections, a Book of Reference of affected parties and an
Environmental Impact Statement. It will mean identifying all the
utilities en route. It is a major piece of work which can take
between two and five years—depending upon length of alignment
and complexity—and cost between £1 and £5 million.
2.1.3 This process should be simplified
so that only the minimum work is necessary to identify quickly
the broad cost and impact of the scheme so it can receive, in
effect, "Outline Planning Permission". There would then
be a second stage, when all the detail would be produced, knowing
that the scheme was likely to proceed.
2.1.4 The Secretary of State is likely to
call in the LRT Scheme and to hold a Public Inquiry. Historically
there have been delays in establishing the inquiry and further
delay (up to two years) before the Secretary of State gave his
reply. The length of inquiries has ranged from a few days to many
weeks. The cost of this stage, involving Legal Counsel, etc, can
be up to £1-2 million.
2.1.6 Bidding Costs are those involved
by companies bidding to design, build, operate and maintain the
project, are dependent upon the actual procurement method adopted
for the LRT scheme. (The pros and cons of different financing
arrangements are considered in Section 6.) The design element
can duplicate some of the work done by the Promoter in obtaining
Powers. Historically consortia of companies have assembled to
bid for LRT projects, because of the wide expertise needed and
to spread the risk. Typically bidding costs will be in the range
of £3-5 million. Typically four or five consortia will bid,
involving expenditure of £12-25 million. Only one can be
successful, even then there is no guarantee that the project will
go ahead, eg Metrolink Extensions. These costs are taken entirely
by the private sector.
2.1.7 Thus, before the project has started
and with no benefit to the travelling public, £17-37 million
has been spent, the majority private sector risk. If the project
does not proceed, this money has been wasted. The opportunity
cost of this expenditure is significant. The inherent risks are
substantial. These issues need to be addressed.
2.1.8 Capital Costs are made up of:
(a) Infrastructure Costs: the building
and installing of track, power supply, bridge and cutting work,
service diversions, traffic management arrangements, stations,
depot, control room, offices, etc.
(b) Vehicles: supply of light rail
vehicles and any other mechanical equipment needed.
Capital costs have increased recently, partly
as a backlash from capital costs associated with heavy rail. However,
it tends to be the risk factors associated with projects, eg scope
of service diversions and complexities of traffic management arrangements,
that have lead to this increase in costs. The greater the design
undertaken initially (however achieved), the less the risk when
it comes to pricing the job (and the better quality of work).
For many of the elements there are only a relatively limited number
of suppliers, unless Continental sources are used, many of whom
are reluctant to get involved in the UK LRT market. Also the Regulatory
Authorities (HSE, HMRI, Disability Units, etc) have unduly onerous
requirements relative to EU Standards. There is also the "uniqueness"
of each UK LRT scheme, the lack of standardisation resulting.
2.1.9 Designs of new and cheaper track forms,
eg LR55 and simpler tram designs incorporating automotive and
industrial technology, have been privately developed. But progress
over these last 10 years has been slow and disappointing, largely
because no Promoter or Constructor was prepared to take the risk
and no Government Grants were available.
2.1.10 All these issues must be addressed.
However, many of the problems stem from the procurement method
adopted in this country, which will be considered in Section 6.
2.1.11 Operating costs are made up
of:
(a) Pre-Operational Costs involved
during the design, development and building stages, the build-up
of the operating team, the preparation of documentation, recruitment,
training and examination of staff and test and trial running.
These are all incurred before fare-paying service commences.
(b) Steady-state Operating Costs are
the costs of operating and maintaining the LRT system to provide
the service specified by the promoter.
Provided experienced operators are involved
it is not too difficult to make reasonably accurate estimates
of these costs. However, the longer the operating concession,
the more difficult it is to forecast operating costs.
2.1.12 LRT schemes are expected to operate
without any subsidy. It follows that fares income must exceed
operating costs. Fares are usually left to be determined by the
Concessionaire, however competition in the market place affects
the maximum fares that can be charged. Outside London public transport
is deregulated and it is very difficult to assess over the life
of an operating concession what degree of competition the LRT
scheme will experience. In spite of tight control on operating
and maintenance costs, competition can affect fare income and
thus operations become loss-making. This is a major risk and
leads to lenders assuming the lowest passenger revenues and charging
a high risk premium, thus affecting the scheme's viability.
2.1.13 Financing and Funding Costs.
The method by which LRT schemes have been procured in Britain
all involve the private sector taking substantial risks at every
stage in the development, building and operating the project.
Risk is added at every step, the cumulative effect of which is
to price up UK LRT schemes. Furthermore, all the relationships:
Promoter to Constructor and/or Operator; between the Individual
Consortia members: designer-builder-operator/maintainer are subject
to complex contractual arrangements, each involving penalty and
termination clauses. There is a very high cost of lawyer's
and financier's fees involved which could be greatly reduced if
a simpler and more traditional approach was adopted.
2.1.14 Risk: in the foregoing consideration
of costs "risk" has been mentioned frequently. The NAO
Report(1) made reference to risk and its allocation. By careful
work at each stage risk can be greatly reduced and accurately
quantified. If the present amount of time spent on financial and
legal matters was applied to the reduction and assessment of risk,
it would not feature so highly in UK LRT projects. Furthermore,
the cost of risk is frequently compounded at each stage of the
bid process. In the case of Metrolink extensions "£80
million contingency was built in on top of the 10% contingency
that the bidders had included, and the 5-6% contingency included
by the sub-contractors"(2). Is there any wonder LRT schemes
cost so much in Britain!
2.2 Benefits of Light Rail
2.2.1 LRT offers safe, quick, reliable transport,
accessible to all, using non-polluting power at point-of-use and
is sustainable, and kind to the environment. It very nearly combines
the best features of trains and buses—the safety and reliability
of trains and the frequency and accessibility of the bus. Worldwide
it has shown its ability to persuade motorists to leave their
cars. Where allowed to do so, it has often been the catalyst in
regenerating run-down areas (eg Docklands) or permitted the opening
up of remote new housing areas (eg Antwerp).
2.2.2 Because of its flexibility (compared
to heavy rail) it can be fitted into existing city centres, including
narrow streets and pedestrian areas. Surface treatments can vary
from a variety of pavings to grassed track. Because stops (or
stations) are simple they can be located to suit passenger demand
and are accessible to all. Light rail can take over run-down or
infrequent heavy rail passenger services or freight-only lines
or disused alignments (eg Manchester Metrolink). By building new
street-running city centre sections, whole new LRT networks can
be created.
2.2.3 Under the appropriate conditions LRT
can run out into the suburbs of a large city region (thereby offering
through seamless travel) by sharing track with heavy rail services
(eg Karlsruhe). There are really no limits to what LRT can
achieve and the benefits it can give.
2.2.4 LRT scores well under all five categories
of the Government's New approach to Appraisal (NATA) to which
all transport projects are subjected. The five categories are:
environment, safety, economy, accessibility and integration. It
should also be noted that in the case of both Metrolink extensions
and the Leeds Supertram Scheme, buses cannot achieve sufficient
benefits to offer a satisfactory alternative.
3. WHAT LIGHT
RAIL SYSTEMS
NEED TO
BE SUCCESSFUL
3.1 To be successful LRT systems need:
3.1.1 Reasonable passenger flows:
a range of 3,000-15,000 pphpd is often quoted. LRT schemes can
be justified on lower flows according to circumstances. Higher
flows up to 20,000 pphpd can be accommodated, if allowed for (but
not built), at the design stage.
3.1.2 Quick journey times: relative
to the circumstances. This implies commercial speeds (origin—destination)
of 18-25 mph. This does not mean high speed, it means carefully
located stations at approximately 1-1½ mile intervals and
vehicles capable of high acceleration and braking.
3.1.3 Substantial levels of segregation
from other transport to ensure quick and reliable journey times.
At least 70% of the system should have its own right-of-way. When
running on-street LRT should be accorded priority at all junctions
over other traffic.
3.1.4 Integration with:
— land-use, existing and future;
— the car, through park and ride provision;
and
— other public transport: buses and
trains, supported by a comprehensive fare and ticketing system
covering all public transport in the area concerned.
4. HOW EFFECTIVELY
IS LIGHT
RAIL USED
AS PART
OF AN
INTEGRATED TRANSPORT
SYSTEM?
4.1 The NAO Report highlighted the lack
of integration of LRT schemes into the urban and transport fabric.
Little more can be added to this excellent report. Throughout
the World LRT forms the backbone of an integrated public transport
system. Only in Britain is LRT expected to compete for market
share.
4.2 Tyne & Wear Metro, opened in stages
in the early 1980s as the backbone to an integrated transport
system for that conurbation, showed how it should be done and
what it could achieve. Following the 1986 Transport Act, which
deregulated local public transport, it is now no longer possible
to develop such a scheme and, indeed, the Metro has suffered.
The Competition Act, and its interpretation, has also compounded
the problem.
4.3 Britain continues to pursue a unique
policy in the Developed World, failing to understand the nature
of competition in the urban transport market. Competition should
not be between buses, trains and trams or between red, blue or
green buses. Competition is between quality public transport,
properly integrated, and the private car. If the line-haul mode
is rail-based or a guided busway, ordinary bus services should
be organised to complement it, not to compete with it. Purpose-built,
quality interchanges should be built—often integrated with
suburban-centre development.
4.4 LRT also needs integrating into existing
and future land-use developments, including regeneration proposals
and the up-grading of the city-scape. This takes time, effort
and money. Present procurement arrangements tend to prevent such
an approach.
4.5 Until the Government addresses the
competition issues identified above, and removes the competitive
element to any up-graded line-haul mode, significant improvements
to provincial public transport will not occur.
5. BARRIERS TO
THE DEVELOPMENT
OF LIGHT
RAIL
5.1 The four main impediments to LRT development
in the UK at the present time are:
5.2 Cost has been dealt with extensively
in the opening section of this Submission. Simpler methods of
procurement could assist in reducing costs by concentrating more
effort in design and consultation and preparing better contract
documentation. This would help to reduce risk. Risk needs to be
allocated where it can best be handled.
5.3 Timescale of Implementation is
grossly extended in Britain and the situation is getting worse.
In the time it has taken Britain to build five schemes, the French
have built 10. The Lyon LRT Scheme took only four years from conception
to implementation. As has been indicated throughout this document,
the UK approach must be simplified and rationalised. Time is money
and the British approach does not ensure that the money is spent
wisely or cost-effectively.
5.4 The lack of integration and the
Competitive situation, unique to Britain, has been dealt
with.
6. THE EFFECT
OF DIFFERENT
FINANCING ARRANGEMENTS
(PUBLIC/PRIVATE)
ON THE
OVERALL COST
OF LIGHT
RAIL SCHEMES
6.1 The traditional way of procuring an
LRT system would be for the public promoter to design it, obtain
the Powers and prepare contract documentation, and to invite tenders
for its construction. In undertaking this work it would probably
use specialist consultants. When inviting tenders it would probably
invite separate tenders for construction, trackwork, power supply,
etc and for the provision of vehicles. A turnkey approach may
sometimes be adopted. The Promoter would, in all probability,
then operate the system. This is how Tyne & Wear Metro was
procured and how the Glasgow Underground was rebuilt and modernised.
It was the method planned for Manchester. This is the simplest
and most cost-effective approach but involves more public finance
than the current methods of procurement.
6.2 The first stage of Docklands Light Railway
(DLR) was in effect, procured by a single turnkey contract with
a private sector consortium, since it proved a very effective
way of procuring the initial, small (17½ miles and 15 stations)
self-contained system in Docklands.
6.3 When authorising Manchester Metrolink
in 1988 the Government decided to take the DLR arrangement a step
further by requiring it to be built under one contract
with one private sector consortium, following competitive tendering.
The Manchester contract was for Design, Build, Operate & Maintain
(DBOM) for the concession period. The Government's objective was
to maximise the private sector's input and thus minimise cost
and timescale of the project. Subsequently all LRT schemes in
Britain have been procured under some variation of the theme DB
& OM; DBFinance OM by way of the PPP or PFI process. One feature
of this approach is that the Promoter cannot specify any particular
element; it can only be done in performance terms. In turn, this
leads to a lack of standardisation between schemes.
6.4 There can be significant benefits in
using the DBOM-type approach—provided that is what the Promoter
envisaged from the start, since it can reduce the duplication
of time and effort at the design stage and allow contractors to
make their input. BUT, a project cannot be accurately costed and
risk minimised until sufficient design has been done to ensure
constructability and operation. Under any arrangement the construction
of an LRT system in a urban area is a very complex matter. There
are also the changes that will occur during the design process
as a result of public consultations and consultations with the
public utilities and highway authorities. These skills were (in
1988-1990) not available from the private sector.
6.5 Consortia who have subsequently built
LRT systems or extensions in the UK have amassed a great deal
of hard-won knowledge and experience. This they priced into subsequent
LRT schemes for which they bid. However, this usually means that
they are under-cut by an inexperienced "new boy". It
is significant that every LRT scheme or extension in Britain has
been built by a different contractor. There are a number of
consequences of this: firstly, there is no transfer of experience
from one project to another and the same costly mistakes are repeated.
Secondly, there is no standardisation or commonality of large
or small elements between the schemes. This leads to inflated
costs, a perceived unacceptable degree of risk and hence the current
situation. At the very least there must be a re-assessment
of the risks involved and a fair allocation of them.
6.6 An LRT scheme is, essentially, a transport
scheme—all the other benefits identified earlier may be
considered to be "icing on the cake". It is designed
to offer a better level of public transport than currently exists.
It follows that the input of an experienced Operator must be available
from the start to interpret the service specification of the Promoter.
These operational inputs are critical to the capital and operating
cost of any LRT system. They determine the infrastructure necessary
to provide the required services eg track layout, power supply,
supervision and control arrangements and the number of vehicles
required to provide the service. In turn, this determines many
of the annual operating costs that have to be recovered from the
farebox.
6.7 The degree of integration/competition,
and the role of the LRT system in the overall public transport
network, are critical inputs to passenger demand. The fares to
be charged are also a major determinant in the number of passengers
forecast to use the various sections of the network. Various model
runs can be undertaken to forecast passenger figures. Sensitivity
and SWOT analysis can also be used to produce robust passenger
and revenue forecasts.
7. THE PRACTICALITY
OF ALTERNATIVES
TO LIGHT
RAIL, SUCH
AS INCREASED
INVESTMENT IN
BUSES
7.1 Light rail is only one of many modes
of public transport that is available today to the transport planner.
The modes vary from minibuses to megabuses via midi, single, double
or articulated buses, with Diesel, electric or dual traction.
Then come trams, LRT, Metro and heavy rail—the spectrum
has never been wider. The skill of the transport planner is to
ensure that he uses the right mode for the right job—although
if there are more than three modes in a city or four modes in
a city-region, passengers can be confused and interchange between
them can become a problem. Inevitably it should be "horses-for
courses", subject to the above caveat. A pre-feasibility
study will, in most cases, reduce the options to three or four
different modes or variations of mode. A Feasibility Study will
then determine the best value-for-money, using the usual cost-benefit
analysis techniques.
7.2 With the possible exception of Greater
London, the bus will always provide the majority of public transport
in any town, city or city-region. The bus is a very effective
form of public transport, often unjustly maligned. Unfortunately,
it has a poor image, although a number of progressive bus operators
have worked hard to improve the design and presentation of buses
and bus services and have been rewarded by increased passenger
numbers and revenues (eg Trent-Barton; Blazefield Group; Brighton
& Hove).
7.3 However, nothing can disguise the fact
that the bus shares its "track" with all other road
users and thus suffers from traffic congestion. This is exacerbated
by inconsiderately parked cars and the problems associated with
loading and unloading vehicles at the roadside. Bus lanes can
offer a measure of improvement, provided they are continuous and
policed. In the UK neither of these conditions often apply (in
marked contrast to Dublin's Quality Bus Corridors). Leeds has
a number of guided busways but these are in short, detached sections.
Pre-emption by buses at traffic signals is virtually non-existent
in the UK (although there were trials in Swansea in the 1970s!).
7.4 Unless local highway authorities are
prepared to take the "bull-by-the-horns" and provide
extensive and continuous lengths of busway and pre-emption at
junctions, the bus will have little attraction to the motorist.
The actual banning of car use in city centres is considered to
be a non-starter. However widespread introduction of Congestion
Charging has already shown its effectiveness.
7.5 IF, through the adoption of continuous
bus lanes and/or guided busways, bus services can become faster
and more reliable then the only matter to address is the vehicle
itself, its driver and its image. Some progressive operators are
already addressing these issues. Much new thought is currently
going into bus design. The new "Future" (ftr) bus being
developed by First Group, based on a Wright-bodied Volvo artic
chassis, offers great prospects and is to be trialled in Yorkshire
later this year.
7.6 Two further points need mentioning.
First, in comparable situations buses, even with substantial investment,
will not achieve the same level of benefits that LRT could achieve.
Bus-based LRT may be cheaper, but benefits are also less. Secondly,
whilst substantial lengths of bus priority might be achievable
in the suburbs or on a radial road, it is unlikely that they can
be achieved in the city centre, because the roads just do not
have the necessary capacity. This means that the benefits of speed
and reliability achieved on the approach to the city centre are
dissipated in the city centre. This is what happens with the otherwise
excellent Adelaide Busway in Australia. With LRT you get a whole
system including dedicated tracks in the city centre.
7.7 However, there will always be a case
in the larger cities (eg Nottingham) and City-regions (eg Manchester)
for LRT networks. These may be created ab-initio from the
heaviest used bus corridors (eg Uxbridge Road) where, after evaluation,
LRT is shown to be more cost-effective than "ftr" or
by the conversion of some existing, heavy rail lines to LRT as
has been identified by the SRA recently. The potential for tram-trains
as pioneered by Karlsruhe, should also not be forgotten.
7.8 IF, following detailed analysis of alternative
bus-based and LR-based rapid transit schemes, it is concluded
that LRT is the best solution that is the solution that should
be progressed. If there is a question of affordability (as there
currently appears to be) then consideration should be given to
re-phasing each scheme to bring annual expenditure in line with
government targets, in preference to reconsidering bus options
which will not deliver anywhere near the same benefits. Such an
approach would also minimise the abortive expenditure with which
the promoters and bidders are currently faced.
REFERENCES
1. National Audit Office (NAO): Improving
public transport in England through light rail, 23 April 2004.
2. From Notes of Manchester Metrolink Working
Group Third Meeting, Wednesday, 17 November 2004.
D Scott Hellewell, FCILT, FCMI
Independent Transport Consultant
Wakefield
February 2005
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