Written evidence from Centro (HSR 92)
1. This paper focuses on the West Midlands Metropolitan
Area with due regard to national considerations as appropriate.
Only questions to which Centro wishes to submit evidence have
been addressed.
1. What are the main arguments either for
or against HSR
2. Centro has assessed the evidence towards High
Speed Rail (HSR) and concludes that the two headline arguments
for HSR are:
(A) Rail Capacity and Connectivity: HSR
will provide the UK with the rail capacity required to meet existing
and future growth on both national and regional rail networks
whilst addressing the poor rail connectivity and journey times
between the West Midlands and the north. This will provide the
generational opportunity to enhance local rail networks to revolutionise
the way people travel whether it be everyday commuting, business
travel or leisure.
(B) Economy: by providing enhanced national
connectivity; new international connectivity and; reduced journey
times, HSR will allow for a step-change in the economic geography
of the UK, supporting sustainable economic growth across the regions
of UK to the benefit of the entire UK economy reducing the UK's
reliance on London to compete in the global economy.
3. These two arguments are supported by the long
term benefits of HSR towards reducing Carbon emissions which with
the completion of the Y-Network will allow modal transfer onto
rail particularly away from aviation and road based freight movements.
4. To do nothing about the rail capacity and
connectivity challenge facing the UK cannot be an option and instead
debate must focus on the benefits of HSR against the alternative
solutions to the rail capacity and connectivity challenges. The
DfT's Economic Case for High Speed Two (HS2) shows clearly that
that investment in a high speed network provides a higher return
than that achieved from a new conventional line or upgraded network.
Centro believes that this should be the key criterion for investment
if the scheme is affordable which as demonstrated below is clearly
the case. The supporting evidence for each
argument is outlined below:
(A) RAIL CAPACITY
AND CONNECTIVITY
5. Capacity to meet existing and future demand
is a critical challenge facing the entire UK rail network. Rail
is an overwhelming success with 1.25 billion passenger journeys
per annum whilst rail freight volumes have increased 50% since
1995. To do nothing in meeting the national capacity challenge
cannot be an option. The West Coast Main Line (WCML) and West
Midlands rail networks are acute examples of the rail capacity
challenge but similar challenges are also prevalent on key networks
such as the East Coast Main Line and other regional rail networks.
National Rail
6. Long distance rail travel has doubled since
1994-95 whilst the WCML supports 31 million journeys today double
the 16 million made in 1999. London, as heart of UK economy, will
continue to drive long distance travel patronage growth with for
example Birmingham to London patronage forecasted to increase
by 35% by 2024-25.[66]
However the problems attached to capacity are not restricted to
future growth. Today, the problem of capacity is starkly demonstrated
by the common place overcrowding on services and the over subscription
and police stewardship of passengers attempting to access services
from London Euston during peak travel times.
7. Current rail industry approach to meeting
existing/ future growth is focused on running longer trains and
incremental infrastructure enhancements. However there is a finite
ability to meet rail growth with this approach whilst delivery
is extremely disruptive to existing rail network.
Local Rail
8. The West Midlands Local Rail network has enjoyed
sustained long term growth and in 2009-10 supported 40M journeys
per annum, double the number carried in 1994. The (draft) West
Midlands & Chiltern Route Utilisation Strategy (WM&C RUS)
predicts future growth of 32% between 2009-10 and 2019-20. During
2009-10 Rail travel accounted for 27% of all AM peak commuter
journeys into central Birmingham.
9. The West Midlands, despite being at the central
point of rail network suffers from poor connectivity, frequency
and journey speeds to major urban/economic areas of the UK:
Table 1
EXISTING RAIL CONNECTIVITY BETWEEN BIRMINGHAM
AND MAJOR UK CITIES
Birmingham to...
| Distance (straight line; miles approx)
| Journey Time
(Hr:Min) | Average Speed
(Distance/ Journey Time)
| Fast Direct Trains
Per Hour
(AM Peak)
|
Nottingham | 40 | 1:16
| 32 mph | 2 |
Sheffield | 50 | 1:13
| 41 mph | 2 |
Liverpool | 60 | 1:42
| 35 mph | 2 |
Manchester | 60 | 1:42
| 35 mph | 2 |
Leeds | 100 | 1:59
| 50 mph | 1 |
London Euston | 110 | 1:24
| 79 mph | 3 |
Newcastle | 160 | 3:19
| 48 mph | 2 |
Edinburgh | 250 | 4:01
| 62 mph | 1 |
Glasgow | 250 | 3:57
| 63 mph | 1 |
10. High Speed Rail will provide the opportunity to segregate
Intercity services away from existing network releasing significant
levels of rail capacity to meet demand on the existing network.
Alternative Options
11. The alternative conventional rail enhancement options
have been accessed by Centro and do not demonstrate the ability
to tackle rail capacity and connectivity challenges faced by the
UK on national and local rail networks to meet national travel
as well as local commuter and rail freight growth. The HS2 route
built as a conventional rail route would cost £15 billion
whilst upgrades to the WCML (such as those proposed in Rail Package
2) could cost £5 billion but would only provide for growth
on the WCML at the expense of West Midlands Local Rail and freight
services whilst not addressing capacity challenges on key national
rail corridors such as the East Coast Main Line nor addressing
the poor connectivity between the West Midlands and the major
cities across the UK, especially to the north. No international
connectivity is provided by the alternative options.
B. ECONOMY
12. The West Midlands economy suffers from the lowest productivity
of the UK major economic centres compounded by road congestion,
high unemployment and; unrepresentation of high value business
sectors. HSR provides the opportunity to expand rail capacity
and connectivity providing businesses with access to new or enhanced
local, regional, national and increasingly international destinations
whilst providing connectivity between people and employment to
the benefit of the economy. Providing the capacity to meet rail
freight growth would also provide further economic benefits to
the UK with rail freight already contributing £6 billion
benefits per annum to the UK economy.
13. The subsequent economic benefits of HSR, combined with
enhancements to the existing rail network, demonstrated that the
West Midlands would benefit from: an additional 22,000 jobs; £1.5
billion GVA benefits and; with the attraction of higher value
business sectors an increase in average wages of £300 per
annum.[67] HS2 operationally
will create 1,500 permanent jobs including 300 jobs at the HSR
rolling stock depot at Washwood Heath in Birmingham, one the West
Midlands most socially deprived areas.
14. HSR provides rail based national and international connectivity
for businesses providing access to new/expanded markets; HSR reduces
journey times between major economic centres such as London, Manchester,
Leeds and Newcastle with international connectivity to cities
such as Paris, Lyon or Frankfurt. This connectivity will attract
national and global companies to invest in the West Midlands ensuring
benefits beyond Birmingham including Wolverhampton and Coventry.
C. CARBON
15. The full Y-Network will provide the national and international
connectivity and fast journey times that will encourage people
to undertake journeys by rail rather than car/ aviation. By maximising
the opportunities of the released capacity on the existing network,
carbon savings can be made by inducing modal shift onto rail for
people making journeys on the West Midlands rail network.
2. How does HSR fit with the Government's transport policy
objectives
Q. HSR is designed to improve inter-urban connectivity.
How does that objective compare in importance to other transport
policy objectives and spending programmes, including those for
the strategic road network?
16. Centro believes that HSR, covering HS2 and the full Y-Network,
is consistent with the Governments objectives for transport to
support sustainable economic growth and reduce carbon emissions.
Q. Focusing on rail, what would be the implications of
expenditure on HSR on funding for the "classic" network,
for example in relation to investment to increase track and rolling
stock capacity in and around major cities?
17. Centro is of the view that traditionally the funding of
major transport infrastructure which provides national economic
benefits has been funded outside of national rail budgets and
there is no evidence to suggest the delivery of HS2 would be different.
The funding of Crossrail requires £2 billion per annum up
to 2015-16 from which point the funding can simply be allocated
to HSR without impact to public services or planned/future investment
in the existing rail network. Indeed, the opportunity to maximise
the released capacity on the existing rail network and revolutionise
the way people travel will be intrinsically linked to continued
and sustained investment in the existing rail network and rolling
stock.
Q. What are the implications for domestic aviation?
18. HSR can provide the connectivity and journey times which
can reduce demand for domestic aviation and international aviation
to destinations such as Paris. However, crucially, HSR can also
provide the journey times and connectivity to Birmingham Airport
from London which would prove attractive as an alternative for
people making flights from major airports such as Heathrow. Major
carbon savings are realised from the full Y-Network.
3. Business Case
Q. How robust are the assumptions and methodology- for
example, on passenger forecasts, modal shifts, fare levels, scheme
costs, economic assumptions (eg about the value of time) and the
impact of lost revenue on the "classic" network?
19. Centro believes that the business case methodology and
assumptions used by HS2 are robust and in alignment with standard
Treasury Appraisal. However, Centro's assessment of the Business
Case provides evidence to suggest that the business case understates
HSR because:
Future Growth
20. The future patronage forecasts used by HS2 for growth
on the rail network appear to be conservative when compared to
historical and actual passenger growth especially on the WCML
and West Midlands Rail Network. The demand forecasting work undertaken
by HS2 Ltd uses an estimate of underlying growth in rail demand
of +3.4% per annum across the entire UK rail network.
21. The key drivers of rail patronage growth include increased
economic and population growth. Future growth levels of both are
projected to be in broad alignment with historical trends meaning
that unless the rail industry introduces policy tools such as
pricing to reduce demand, future rail demand is likely to be consistent
with historical growth levels.
22. Therefore, the future growth outlined by HS2 needs to
be assessed against actual and historical growth in rail travel
demand. The (draft) WM&C RUS states that passenger journeys
on the West Midlands rail network will grow by 30% by 2019-20
equating to a 2.4% per annum growth whilst journeys to Birmingham
are predicted to increase by 32% in the peak by 2019 and broadly
the same for off-peak travel. However rail patronage in the West
Midlands has increased by 6.4% during 2009-10 to 40 MILLION, nearly
3% above the average 2.4% increase predicted by the WM&C RUS.
Table 2 outlines historical rail growth in the West Midlands whilst
Table 3 outlines growth in long distance rail journeys from London
1999-2000 to 2009-10.
Table 2
HISTORICAL WEST MIDLANDS RAIL NETWORK PATRONAGE GROWTH[68]
Year | 2004-05
| 2005-06 | 2006-07
| 2007-08 | 2008-09
| 2009-10 |
Patronage (million) | 29.3 |
30.9 | 32.8 | 35.5
| 37.6 | 40 |
% change per annum | 6.9 |
5.5 | 6.1 | 8.2 |
5.9 | 6.4 |
Table 3
HISTORICAL GROWTH LONG DISTANCE RAIL TRAVEL[69]
London to | Total Growth
| Average Annual Growth Rate |
Manchester | 70% | 5.4%
|
Birmingham | 58% | 4.7%
|
Liverpool | 41% | 3.5%
|
Glasgow | 23% | 2.1%
|
23. By 2043 HS2 Ltd have estimated that 136,000 passengers
per day will use HS2. This represents an additional 53,000 passengers
per day, with the majority of HS2 passengers coming from the existing
rail network. Whilst this appears to be significant increase in
rail users overall it is in fact a very small increase in additional
passengers per annum over a 30 year period (circa 1.5% per annum).
24. HS2 (London to Birmingham) has a BCR of 2:1 (1.6:1 Without
Wider Impacts). Centro believes that this could be higher if further
work is undertaken on maximising the benefits of capacity freed
on the existing rail network. These additional benefits would
be spread across the country and generate a significant non-rail
user benefit stream as trips from private car users transfer to
the improved existing rail network.
Wider Impacts
25. Centro believes that while the Wider Impacts included
in the HS2 appraisal are significant they are still an underrepresentation
of the impact that HSR could have on the UK economy. If a more
dynamic approach to modelling the interaction between changes
in accessibility and land use were employed, that reflected changes
in the location and mix of businesses in an area as a result of
improved transport connections, then this would represent a more
realistic estimate of the economic impact of HS2. The Department
for Transport have assumed no changes to land use will occur as
a result of HSR which is not consistent with international case
studies of HSR as outlined in para 36.
Wider Network Benefits
26. The appraisal of the completed "Y" Network estimates
a BCR of 2.6:1 (2.2:1 without wider impacts) which Centro believes
is understated as the appraisal excludes the benefits of stopping
in Carlisle and Edinburgh. Again Centro believes that wider impacts
are an under estimate not only because of the methodological approach
but also because the current figure is based on work carried out
for the London to Birmingham business case.
Q. What would be the pros and cons of resolving capacity
issues in other ways, for example by upgrading the West Coast
Main Line or building a new conventional line?
27. Whilst High Speed rail is marginally more expensive than
upgrading the existing infrastructure it offers a number of significant
advantages in terms of additional capacity and reduced disruption
to passengers. The experience of a previous upgrade to the existing
"live" rail infrastructure is relevant. The WCML Route
Modernisation project costs were estimated at £2.1 billion.
The outturn cost was £9 billion and it entailed a decade
of on-line works, which was hugely disruptive to rail users. There
is much greater risk and uncertainty around early line of route
cost estimates than those made for new-build. Upgrades also typically
take longer than originally programmed.
28. Such an approach to tackling capacity challenges would
do very little for the West Midlands in terms of improving connectivity
(as demonstrated in Table 1) to key cities served by the East
Coast Main Line such as Nottingham, Sheffield, Leeds and Newcastle
compared to what would be delivered by the "Y" network.
Improvements to the WCML to facilitate additional long distance
services would also reduce the ability to improve local services
as the railway would remain an inefficient mixture of fast long
distance and slow local and regional services.
29. Building a new conventional rail line would save only
around 9% of the cost of HS2 but without the international/ national
connectivity and journeys times savings delivered by HSR meaning
fewer quantifiable benefits, especially economic benefits, and
is therefore not considered by Centro to be a credible alternative
to HS2.
Q. What would be the pros and cons of alternative means
of managing demand for rail travel, for example by price?
30. Centro has previously undertake studies into the impacts
of pricing to reduce travel demand which provides evidence that
pricing would result in:
Lower
economic growth and jobs. These stem from
faster and expanded travel opportunities and if these do not materialise
then the economic benefits do not occur or will be constrained
by the extent to which benefits can be achieved on the conventional
network.
Social
Exclusion. A policy of pricing to manage
demand will result in rail only been affordable to selected socio-economic
groups which would have major impacts to social inclusion and
create barriers for people, especially from lower income groups,
to use rail in accessing jobs and educational opportunities. Centro's
Local Transport Plan promotes social inclusion and therefore pricing
would counter to this objective.
Increased
Carbon Emissions. Those unable to afford
to travel by rail would be forced to travel by road or air increasing
carbon emissions. Demand in these areas would ultimately increase
the case for expanded roads/ airports which have high costs and
would be counter to many Government objectives.
4. The Strategic Route
Q. The proposed route to the West Midlands
has stations at Euston, Old Oak Common, Birmingham International
and Birmingham Curzon Street. Are these the best possible locations?
What criteria should be used to assess the case for more (or fewer)
intermediate stations?
31. Centro believes that the proposed stations
on the West Midlands to London route are in the best possible
locations. A key issue in determining their success will be ability
to interchange with other modes and in particular at Birmingham
Interchange it will be necessary to ensure that the HSR Interchange
Station, the existing Birmingham International rail station, Birmingham
Airport/ NEC are as closely located as possible.
Q. Which cities should be served by an eventual
high speed network? Is the proposed Y configuration the right
choice?
32. Centro supports the proposed Y network as
it creates significantly improved connectivity between the West
Midlands and the North, with both Manchester and Leeds being the
key locations needing access. It will be important to consider
how improved connectivity to Newcastle and Scotland beyond the
proposed Y network can be delivered as part of the HSR strategy,
and whether the current network can be sufficiently upgraded to
deliver the capacity and journey time benefits needed for High
Speed services.
Q. Is the Government correct to build the
network in stages, moving from London northwards?
33. The scale of the project will inevitably
require delivery in stages, although it would clearly be highly
desirable for the northern legs of the Y to be constructed as
soon as possible after the phase from London to the West Midlands,
as the interim situation with HSR services operating on the West
Coast Main Line north of Lichfield will create considerable capacity
problems for the existing network. Given that a key driver for
the project is the relieving of capacity on the WCML at its southern
end, it is imperative that the LondonWest Midlands HS2
route is delivered in time to achieve this.
Q. The Government proposes a link to HS1 as
part of Phase 1 but a direct link to Heathrow only as part of
Phase 2. Are those the right decisions?
34. Centro believes that these are the right
decisions, as the Old Oak Common Interchange will provide excellent
connectivity to Heathrow as part of Phase 1, while the link to
HS1 needs to be delivered as part of Phase 1 both for practical
construction reasons, but also to deliver the international connectivity
benefits of the route as soon as possible. When (or whether) the
Heathrow connection is delivered ought to be reviewed as part
of how effectively the Old Oak Common Interchange can deal with
Heathrow traffic, given that it will have a far better HSR service
than could ever be justified for Heathrow alone.
5. Economic Rebalancing and Equity
Q. What evidence is there that HSR will promote
economic regeneration and help bridge the north-south economic
divide?
35. Centro believes that the dramatic change
in accessibility brought about by HSR will support economic regeneration
and growth in UK regions by bringing major employment and population
centres close together. This change in accessibility will offer
greater opportunities to reach new markets, suppliers and employees
for businesses and jobs and services for residents. International
examples of HSR provide evidence to support this view.
36. For example, Lyon is on France's HSR network
with a population of three million people, providing similarities
with the West Midlands. As a result of HSR, Lyon is now recognised
as France's second largest economic centre with domestic HSR connectivity
to economic centres such as Paris, Lille and Marseilles with international
connectivity to Brussels and Frankfurt. The Lyon Part Dieu high
speed rail station has underpinned wider regeneration of Lyon
city centre and the area hosts 5.3 million square feet of office
space and around 20,000 jobs. Lyon is home to five high value
business sector clusters, driving economic growth and attracting
greater inward investment. A similar story is seen in Lille where
the opening of HSR in 1993 has led to the creation of 50,000 jobs
in the Lille metropolitan area.
Q. To what extent should the shape of the
network be influenced by the desirability of supporting local
and regional regeneration?
37. Centro believes that the Y-Network has been
fully influenced by the need to support local and regional economies.
To remain competitive globally the UK cannot simply rely on the
London economy alone. The benefits of HSR will spread prosperity
across the regions to the benefit of the UK economy as a whole.
38. HSR stations in Birmingham and Solihull are
expected to act as a catalyst for significant private sector development.
Development focused on strong regional centres, supported by HSR,
will generate benefits that are spread across the wider hinterland
of these locations supporting large areas of population and employment
outside the South East.
Q. Which locations and socio-economic groups
will benefit from HSR?
39. As discussed in paragraph 30, Centro believes
all socio-economic groups will benefit from HSR either:
directly
through the HSR journey speed and connectivity benefits or by
the released capacity on the existing network been used to improve
local rail service provisions and connectivity; or
indirectly
through a more prosperous economy creating jobs and wealth for
all residents to enjoy.
40. Greater capacity in the rail travel market
is also likely to have a positive impact on rail fares ensuring
all socio-economic groups can access the rail network and particularly
ensuring that rail doesn't becoming a "mode of the few"
for long distance trips post 2026.
Q. How should the Government ensure that all
major beneficiaries of HSR (including local authorities and business
interests) make an appropriate financial contribution and bear
risks appropriately? Should the Government seek support from the
EU's TEN-T programme?
41. Centro believes that it is fair that those
who benefit from HSR should contribute towards its cost but only
if the appropriate financial regulations and tools are in place.
For example, if Local Authorities are allowed to keep the additional
business rates generated by HSR (using mechanisms such as Tax
Incremental Financing) then these areas should contribute towards
appropriate HSR infrastructure eg stations. However, if the Treasury
keeps the additional tax raised from HSR then it's appropriate
that the Government and major private sector developers pay for
HSR.
May 2011
66 Source: Network Rail (Draft) West Coast Main Line
Route Utilisation Strategy Back
67
Source: Centro Commissioned Report by KPMG "High Speed
Rail and supporting investments in the West Midlands Consequences
for employment and economic growth". Back
68
Source: Centro Annual Statistics Report 2010. Back
69
Source: Network Rail (draft) West Coast Main Line Route Utilisation
Strategy. Back
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