Funding for Olympic transport
PUBLIC FUNDING PACKAGE
25. £2.375 billion, from Lottery money, London
council tax, and London Development Agency funding, has been agreed
between the Government and the Mayor of London to meet the cost
of the Games.[18]
We note that in response to a Parliamentary Question about
reassessing the cost of the Games, the Government has confirmed
that KPMG has been commissioned to provide advice to the Government
on those costs."[19]
26. The Government told us that "the total cost
of the Olympic specific transport schemes to be met from Olympic
funding amounts to £692 million".[20]
£508 million (revised to £542 million)"
[21] of this total
is expected to be met from the £2.375 billion with the remainder,
£184 million (revised to £150 million)[22],
being met from the operational budget of the Games, although these
proportions appear to have varied more recently in a supplementary
memorandum from LOCOG .[23]
27. We questioned Transport for London, LOCOG, and
the Mayor of London closely about the transport projects which
would be completed by 2012 only as a result of the Olympic Games
and the additional money provided to the Games by the Government
over and above planned UK spending on transport before 2012.[24]
Sir Keith Mills, Vice Chairman of LOCOG, told us that this extra
money amounted to £692 million.[25]
This was broken down as follows: capital investment in infrastructure
£340 million, to include schemes such as the upgrade
of the North London Line and West Ham station capacity enhancements.[26]
It appears that the effect of the extra funding on these projects
will be to accelerate their completion to coincide with the timetable
for the Games.[27] £202
million, is dedicated to buying "temporary Games-time
services",[28] for
example, additional train services including the Olympic 'Javelin'
shuttle from St Pancras to the Olympic Park at Stratford, and
temporary park and ride facilities.[29]
The remaining £150 million is a contribution towards
transport running costs."
OLYMPIC TRANSPORT RUNNING COSTS
28. The operational budget of the 2012 Olympic Games,
estimated to be £1.5 billion, covers the operating costs
of running the Games. These costs are met almost entirely from
broadcast rights, sponsorship and ticket sales. The LOCOG will
not finance any capital expenditure. Of the £1.5 billion
LOCOG budget, £150 million is expected to be spent on operational
Olympic transport.[30]
KEY TRANSPORT FOR LONDON PROJECTS
29. In its initial assessment of London's Olympic
bid the International Olympic Committee (IOC) commented adversely
on London's transport. For example "rail public transport
is often obsolete and considerable investments must be made to
upgrade the existing system in terms of capacity and safety."[31]
30. During the bid process in July 2004, Transport
for London agreed long term funding with the Department which
allowed it to start an investment programme in transport infrastructure
for London amounting to £10 billion over the five years to
2012.[32] This almost
certainly helped to convince the IOC that London's infrastructure
would be able to meet the needs of the Games:
During the bid process, substantial London rail
transport infrastructure investments have been clearly confirmed,
guaranteed and accelerated. Provided that this proposed programme
of public transport improvements is fully delivered on schedule
before 2012 and the extensive Olympic Route Network is implemented,
the Commission believes that London would be capable of coping
with Games-time traffic and that Olympic and Paralympic transport
requirements would be met.[33]
31. This spending agreement has enabled TfL to accelerate
the completion of major projects by 2010, for example, the three
DLR extensions and the East London line extension which "TfL...had
guaranteed to the [International Olympic Committee]."[34]
DOCKLAND LIGHT RAILWAY EXTENSIONS
32. The Docklands Light Railway (DLR) runs from Bank
and Tower Gateway in the City of London through Canary Wharf to
the Isle of Dogs and Greenwich, and through Poplar to Stratford
and Beckton.
33. An extension from Canning Town DLR to London
City Airport and King George V (North Woolwich), opened on 6 December
2005. The estimated cost of the new line, built by City Airport
Rail Enterprise (CARE), a consortium of AMEC and the Royal Bank
of Scotland, was £140 million. Under a concession arrangement,
CARE will be responsible for the maintenance of the railway for
a period of approximately thirty years, and for making it available
for DLR to operate trains. Two further extensions are planned:
the first from King George V to Woolwich Arsenal, the second from
Royal Victoria to Stratford International.
KING GEORGE V TO WOOLWICH ARSENAL
34. In April 2004, TfL and DLR Ltd announced that
four prospective consortia had been successful in the pre-qualification
process to bid for the concession to build the Woolwich extension.
In June 2005, Woolwich Arsenal Rail Enterprises (WARE), another
consortium formed by AMEC and the Royal Bank of Scotland, was
appointed as the concessionaire for thirty years. The estimated
cost is £150 million and construction started in Summer 2005.
This extension is expected to open in 2009.
ROYAL VICTORIA TO STRATFORD INTERNATIONAL
35. The aim of the Royal Victoria to Stratford International
extension is to link up the DLR with the CTRL at Stratford International.
The 5km extension will link with DLR's Beckton and London City
Airport routes. There will be new stations built at Star Lane,
Abbey Road and Stratford High Street. Existing North London line
stations at Canning Town, West Ham and Stratford will be modified,
and a new station will be opened at Stratford International. It
is expected to open in 2010.
DOCKLAND LIGHT RAILWAY CAPACITY UPGRADE
36. DLR Ltd has also proposed upgrading capacity
of the railway on the Bank-Lewisham route. In October 2005, DLR
Ltd received approval under the Transport and Works Act 1992 (TWA)
to undertake construction works on the route between Bank/Tower
Gateway and Lewisham. These works will entail lengthening platforms,
strengthening some viaducts and bridges, and also providing additional
lifts and other improvements in order to give the DLR the ability
to run three-car trains. Construction is expected to start on
April 2007. Provision has been included for eighteen new vehicles
and expansion of the Beckton depot. Drawing on more than £100
million of Transport for London's five-year £10 billion Investment
Programme, the project should see new trains on the network by
Autumn 2009 and twenty four vehicles have already been ordered.
A separate contract for the expansion of the DLR depot at Beckton
was finalised recently.
EAST LONDON LINE PROJECT
37. The East London Line (ELL) project will extend
and upgrade the existing London Underground East London Line,
converting it into a new metrostyle (National Rail) train service.
This will provide services that will ultimately extend north to
Highbury & Islington, south to West Croydon and west to Clapham
Junction, and in the future could potentially facilitate 'orbital'
journeys around London.
38. The project will be delivered in two phases,
of which the first phase only is due to be completed in time for
the Olympic Games. Phase one will extend the existing line north
to Dalston Junction and south to Crystal Palace and West Croydon.
It is due to be completed by June 2010 and to cost £900 million.
In November 2004 the Mayor of London took control of the ELL project
and financing will come from TfL's five-year investment programme.
Funding has yet to be agreed for the second phase which will extend
the ELL west to Clapham Junction and connect North London Line
stations at Canonbury and Highbury & Islington, but TfL does
not consider it to be crucial for Olympic transport.[35]
LONDON UNDERGROUND JUBILEE LINE CAPACITY INCREASE
39. The Jubilee Line runs from Stratford in East
London through Canary Wharf, Waterloo and Baker Street to Wembley
and Stanmore in North London. All Jubliee Line trains have had
an extra seventh carriage added from January 2006 boosting passenger
capacity on each train by seventeen per cent. These measures will
increase capacity by nearly twenty per cent on the whole Line,
equating to an extra 3,000 passengers every morning and evening
peak. The Jubilee Line will also receive a full line upgrade to
increase capacity in 2009. London Underground upgrades are discussed
in more detail later in the report.[36]
40. It is too early to conclude that the budget for
the Olympics is right. But the Government has boosted the money
available to enable the Docklands Light Railway and first phase
of the East London Line extension to be completed, and that is
welcome. We are heartened that the former Chief Operating Officer
for the 2000 Sydney Olympic Games considered that, overall, funding
for the London Games was "possibly the best Olympic budget"
he had seen at this stage.[37]
The Olympic transport budget will be a matter for the
Olympic Delivery Authority and the successors of Interim Olympic
Transport. We expect then to implement excellent financial planning
systems and to ensure sound stewardship of public money. This
does not however absolve the Government from responsibility for
overseeing carefully the financial health of the Olympic transport
budget in the coming years. We expect it to be fully alert to
problems and to step in quickly where difficulties arise.
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