Memorandum by Merseytravel (LR 78)
THE FUTURE OF LIGHT RAIL AND MODERN TRAMS
IN BRITAIN
INTRODUCTION
1. Merseytravel is the operating name of
the Merseyside Passenger Transport Authority and the Merseyside
Passenger Transport Executive.
2. The Passenger Transport Authority (PTA)
is comprised of 18 elected councillors drawn from each of the
five district councils in Merseyside : Liverpool City Council;
Sefton Metropolitan Borough Council; Knowsley Metropolitan Council,
St. Helens Metropolitan Council; and Wirral Metropolitan Borough
Council. The PTA was established in 1986 on the abolition of Merseyside
County Council.
3. The PTA sets the transport policies in
the sub-region, and the Passenger Transport Executive (PTE) implements
those policies. These policies are set out in the Merseyside Local
Transport Plan, a statutory document covering the period 2000-01
to 2005-06.
4. While there are seven PTAs and PTEs in
the UK, Merseytravel is unique in that the PTA and the PTE is
fused together and is one operating organisation.
5. The PTE Group, of which Merseytravel
is a member, has submitted a separate paper to the Committee,
which Merseytravel fully endorses. This paper is submitted to
assist the Committee with its inquiry and draws specifically on
the light rail experience on Merseyside. The focus of this paper
is primarily to address the issues raised by the Committee when
it announced this inquiry, based on our experience on Merseyside.
6. If it would assist Members' deliberations
further, Merseytravel would be delighted to give oral evidence
to the Committee.
CONTEXT
7. As members of the Committee may be aware
Merseytravel is, with its local authority partners, promoting
a 3-line light rail scheme (called Merseytram) to serve Merseyside.
Merseytram has been in development since 1999 and is the no 1
major public transport project in the Merseyside Local Transport
Plan. Line 1 connects Liverpool city centre with Kirkby town centre
in Knowsley, to the north east of the city; Line 2 links the city
centre with Prescot and Whiston to the east; and Line 3 will run
from the city centre to Liverpool John Lennon International Airport,
to the south-east of Liverpool. A map of the proposed three-line
route is provided in Annex 1.[26]
8. Merseytram will provide improved access
to all the major developments in the city centre, including the
new Grosvenor retail development in Paradise Street, and will
serve the city's major attractions in advance of the European
Capital of Culture celebrations in 2008. Line 1 also serves six
of the 38 Pathway Areas: areas of multiple deprivation as designated
by the EU Objective One Programme.
9. The public inquiry into Merseytram Line
1 was held during April, May and June of 2004 after Merseytravel
had commenced the Transport and Works Act (TWA) process in October
2003. The Secretary of State announced in December 2004 that the
necessary TWA Order would be made. The Order was made on 21 January
2005 and is now in force, and Merseytravel is well advanced with
the procurement process for Line 1: construction is scheduled
to start in summer 2005. A more comprehensive overview of the
status of Merseytram will be provided later in this paper.
THE COSTS
AND BENEFITS
OF LIGHT
RAIL
10. As with all major infrastructure projects,
the capital costs of light rail systems are significant. They
almost always require the acquisition of land, major highways
works (including alterations to utilities), major public local
inquiries and a large investment in manufacturing, maintenance
and operational capacity as well as construction costs.
11. While these costs are unquestionably
high, so too is the return on the investment. These benefits extend
far beyond the normal parameters of smaller scale public transport
services, and deliver a range of economic, social and environmental
improvements in the areas they serve.
12. The correlation between high quality
public transport services and economic performance is strong.
Light rail schemes are a large-scale, fixed infrastructure systems
which provide robust, reliable and high quality services over
the long-term. From an investment perspective this provides an
excellent platform on which to build. Light rail provides an extremely
attractive opportunity and encourages other associated public
and, crucially, private enterprise, typically in the form of regeneration.
These, in turn, bring a range of other benefits to the community.
13. 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.
14. It may assist the Committee to cite
an example in Kirkby town centre, which does not currently have
any major supermarket or superstore facilities. By using the development
of Merseytram Line 1, Knowsley Metropolitan Borough Council (KMBC)
has entered into negotiations with a number of organisations about
developing a major supermarket/superstore in the town centre.
The sustainability and permanence of the tram as a mode of transport
has been a crucial factor in these negotiations. As well as providing
much needed new jobs and access to them, this will also provide
access to high quality affordable goods including fresh meat,
fruit and vegetables, as well as offering people a wider range
of goods to choose from.
15. While it is a fact that other long-term,
sustainable, capital investments follow major investments in transport
infrastructure, the true benefits of this additional investment
are not always easily quantifiable and are not always transport-related.
Merseytravel believes that more weight should be attached to the
associated social benefits, particularly of reducing social exclusion
and underpinning regeneration, when weighing up the costs and
benefits of light rail projects.
16. Light rail systems also have major environmental
benefits. There is a reduction of approximately 14% in vehicles
using roads where trams have been introduced, which therefore
reduces emissions and pollutants as well as reducing some noise
pollution for affected areas.
17. Obviously, a core benefit of light rail
systems is that they can provide a fully accessible, low floor,
affordable and low emission services, as Merseytram will. One
of light rail's key strengths is its ability to attract passengers,
including those with disabilities and other constraints, to switch
from their cars. This is crucial in managing demand on the roads
and in providing genuine alternatives to car travel for all members
of the community. A study for PTEG by transport consultants Steer
Davies Gleave (published 23 February 2005) found that metro-style
systems are far more likely to tempt motorists out of their cars
and reduce congestion in major cities. The report found that in
the morning rush-hour, around one in five tram passengers had
made the switch from their car—compared to between 4% and
6.5% persuaded on to public transport by bus improvement schemes.
18. In summary key benefits of light rail
schemes include:
— supporting and enhancing regeneration;
— protecting the environment;
— improving the city's image;
— promoting new areas for commercial
investment;
— improving access to employment and
creating new job opportunities;
— increasing customer choice;
— underpinning growth industries such
as tourism; and
— providing high-quality inclusive
public transport services which attract drivers.
WHAT LIGHT
RAIL SYSTEMS
NEED TO
BE SUCCESSFUL
19. As the National Audit Office Report
concluded inter alia last year, in order to maximise their
benefits, light rail systems need to have guaranteed priority
at junctions along the highway.
20. Integration with other modes of transport
is essential to deliver high quality public transport and to offer
passengers, and potential passengers, a genuine and appealing
alternative to the car. Allied to this, light rail systems also
require accurate, up-to-date travel information that empowers
passengers to make informed transport decisions.
21. Smart, integrated ticketing systems
will simplify travelling thereby encouraging sustained use by
existing passengers and encouraging new passengers to switch modes.
The Integrated Ticketing Smartcard Organisation (ITSO) is developing
the technology to achieve seamless travel.
22. Finally, genuine partnership between
the promoter and the other statutory authorities, as well as with
the private sector, is essential. There is no merit in playing
zero-sum games—to be successful, a mutual winners approach
is required.
HOW EFFECTIVELY
IS LIGHT
RAIL USED
AS PART
OF AN
INTEGRATED TRANSPORT
SYSTEM
23. Our objective on Merseyside, through
the implementation of the Local Transport Plan, is to deliver
a fully integrated public transport network that is accessible
to everyone.
24. Our commitment to achieving this objective
can be seen by the fact that the proposed concessionaire that
is to operate the trams must fully integrate with the Merseyrail
heavy rail service. This will be a contractual requirement of
the Concession Agreement. The converse is also the case: that
the Merseyrail operator must fully integrate with the trams, when
they are in operation as part of the concession agreement. We
are also liaising with the local bus operators to ensure that
they too integrate with the tram and Merseyrail services, although
we do not have the same powers to enforce this integration as
a result of bus deregulation. Nonetheless we are in dialogue with
these operators and are hopeful of a positive conclusion. This
point is addressed further, later in this paper.
BARRIERS TO
THE DEVELOPMENT
OF LIGHT
RAIL
25. Light rail systems face a number of
barriers to their implementation. The complex nature of the powers
and consents procedure requires a great deal of detailed legal
work. This normally includes a public local inquiry. While it
is quite proper for light rail schemes to be scrutinised in such
detail, this does not alter the size of the task.
26. Historically light rail schemes have
suffered delays in the authorisation process. As referred to in
point 9 above, the Merseytram Line 1 Inspector and then the Department
for Transport worked extremely hard to ensure that the Secretary
of State could make a decision on our TWA application as quickly
as possible.
27. Far from being a barrier to the development
of Merseytram Line 1, the TWA and related consents procedure took
just 14 months from commencement to the decision by the Secretary
of State. This is twice as fast as any previous TWA Orders for
light rail projects, which in any event were in relation to extending
existing systems. Merseytram is an entirely new project, which
increases the significance of such a quick and positive decision
by Government.
28. In order to expedite the process, we
kept in constant touch with officials in the DfT throughout and
enjoyed an extremely constructive and positive relationship. As
a result of the efforts of everyone involved, this was the quickest
ever decision for a project of this size and nature by a long
margin. This was very positive as the Line 1 project is under
difficult time constraints: the project must be in operation by
the end of 2007 so that construction does not to coincide with
Liverpool's European Capital of Culture celebrations throughout
2008.
29. Aside from the powers and consents issues,
a major barrier is the procurement process and the need carefully
and effectively to manage the involvement of the private sector
partners who will ultimately build and operate the system. The
critical issue here is the management and apportionment of risk,
and the ability to achieve a satisfactory and fixed price and
programme for the project. Too many projects have encountered
major problems on these issues which have resulted in ever increasing
costs.
30. In order to manage this process effectively,
Merseytravel took the unique step of involving the private sector
at the earliest possible stage, even before the TWA process had
been stated. This way we had the benefit of private sector input
at the right stage in the project's development and in ensuring
that those with responsibility for the construction and operation
of the system were comfortable with the project. By identifying
and managing issues alongside the private sector, we have minimised
the risk of developing problems of the kind which often result
in substantial increases to the costs. This "no surprises"
approach has been used successfully elsewhere in Merseyside (for
example, in relation to the Merseyrail Electrics Network).
31. To this end, we have invested significant
resources in ensuring that we could provide the private sector
with the most advanced and accurate information relating to the
project so that we could then expect genuine cost certainty. By
maximising the amount of accurate information given to our private
sector partners we have been able to remove doubt from the process.
The removal of doubt reduces the risks, which in turn reduces
the costs through a reduced "risk premium".
THE EFFECT
OF DIFFERENT
FINANCING ARRANGEMENTS
(PUBLIC/PRIVATE)
ON THE
OVERALL COST
OF LIGHT
RAIL
32. Members of the Committee may also be
aware that we have adopted a different procurement approach to
other light rail projects in the UK. Having looked at and learned
the lessons elsewhere we have sought to retain the maximum flexibility
in relation to the selection of a private sector partner and beyond.
33. As members of the Committee well know,
major infrastructure projects are notoriously difficult to deliver
and face challenges from start to finish. By adopting this different
procurement approach, which draws heavily on the negotiated procedure
under the European procurement rules, we have been able to identify
issues early and to apprehend them before they become problems
and to manage problems before they become unmanageable or unaffordable.
34. An example of this is this. Despite
still being within our budget, we recently rejected the Best and
Final Offer to Design, Build, Operate and Maintain Line 1 from
the sole remaining consortia bidding for the contract. We did
so on the ground that we believed better value for money could
be achieved by testing the market. Subsequently, two of the three
firms involved in the consortium have been engaged to continue
working on design and systems integration, and operational issues,
while the other elements of the contract have been re-tendered
under the emergency European procurement procedures.
35. Since then, and at the time of submitting
this paper, 21 expressions of interest have been received, of
which nine organisations have been shortlisted for the various
construction elements of the contract. By re-introducing competition
into the process at this stage, we are confident that we can receive
a lower price and secure more certainty on the programme.
36. This would not have been possible if
we had gone down a traditional procurement route. Merseytravel
believes that this procurement approach can support the delivery
of other light rail schemes in the UK, which have in recent years
been prevented or delayed by rising costs.
THE PRACTICALITY
OF ALTERNATIVES
TO LIGHT
RAIL, SUCH
AS INCREASED
INVESTMENT IN
BUSES
37. Merseytravel fully endorses an integrated
approach to the provision of public transport services. Light
rail, as with heavy rail, bus, ferry, walking, cycling and other
transport modes, has an important role to play within than setting.
38. However, light rail is not necessarily
the best solution in every circumstance. Indeed, before proceeding
with Merseytram, we were required to undertake a comprehensive
study of the various public transport options for each of the
corridors on Merseyside. For the three corridors in question,
a light rail solution was found to be the most effective. Had
this not been the case, Merseytravel would have pursued another
course of action.
39. Bus travel is the most heavily used
mode of public transport on Merseyside with almost 170 million
passenger journeys per annum against 33 million rail journeys.
Therefore, Merseytravel is fully aware of the importance of bus
services to meeting public transport needs in the sub-region.
As a result, we are fully committed to delivering a series of
improvements to the bus network which include introducing bus
priority corridors, bus lanes and other infrastructure improvements
(such as free car parks, real-time information, well designed
shelters and CCTV to evidential standards).
40. However, as a result of the deregulation
of bus services outside of London in 1986, public transport authorities
have very little direct influence over bus operators. The problem
for co-ordinating an integrated public transport system in this
context is that the bus operators are running their services as
an individual business which operate in an unregulated market
place. This does not naturally lend itself to integration with
other modes of transport that, in their eyes, are competing for
customers. The result is that bus services often operate in isolation
from the rest of the transport network and are driven by objectives
of profitability. This is at the expense of working with the authorities
and other transport operators to maximum benefit to passengers.
41. As well as discussing how to encourage
bus operators voluntarily to play a wider role in the integrated
public transport network, Merseytravel is also currently exploring
what options there are to amend the regulatory/operational regime
by introducing bus quality contracts.
42. Regarding the need to integrate Merseytram
with other transport modes, the system has been designed to support
major developments and access to key areas within Merseyside.
A list of key regeneration sites is attached in Annex 2.
43. This brief paper gives an overview of
the Merseytram project as one of the elements of the Merseyside
UP which is designed to produce a single integrated public transport
network which is accessible to everyone.
Merseytravel
25 February 2005
26 For map see 3 Line Network at http://www.merseytram.co.uk/merseytram%20frameset.htm Back
| 
