Examinations of Witnesses (Questions 240-259)
MR CHARLES GEORGE QC and MISS JOANNA CLAYTON, BIRCHAM
The Petition of David Loudon, John McGoldrick and
MR JOHN McGOLDRICK examined
240. If the Committee keep one finger in B21 A they
will see so far as the operating costs and the debt charges column
and the refurbishment costs those remain constant, do they not?
They do. They are identical from top to bottom. The first columns
on the lefthand side are identical.
241. Moving to the righthand side of the column,
whilst the inflation is constantly the same for both we can see
the car tolls are going up approximately every three years in
line with inflation. Is that right?
That is so. We initially tried at triennial intervals and ultimately
at biennial intervals.
242. Then under total traffic we can see the same
figures we were looking at a moment ago in B27A where the bottom
of the table at 28.3 you are still short of the 30 million figure.
That is correct. It is a repeat scenario of traffic growing to
28.3 million in 25 years' time compared to a frozen toll scenario
of traffic growing to 32.1 million.
243. So far as the outstanding debt is concerned
that is exactly the same in the two tables, if you have assumed
it being paid off it is the same rate in accordance with the contractual
provision and the arrangement with the district councils.
In a sense there is no alternative to paying it off. These debts
are under loan agreements, it is a contractual responsibility,
it needs to be discharged, it is discharged, it will continue
to be discharged and both tables show that diminishing from a
level of £94.6 million at the end of this month down to £11.7
million in 25 years' time. Ultimately if I had extended the table
they would show the debt paid off completely.
244. So far as the repairs and renewal funds at
page 74, 21A you started with the same plus position of having
£4.3 million and by the end of the column the repairs and
renewal fund was in deficit whereas at page 84 of 28 A you are
in credit in the repairs and renewal fund.
What I have done is assume the same level of balance throughout
the period. In reality I ought to put inflation on that figure.
What was I trying to show in the table on page 84 is that we
would have money in the R & R fund to fall back on if refurbishment
costs were needed. We would always keep money in reserve for
that purpose. In the column alongside it shows the potential
crosssubsidy of public transport projects starting at a
figure of £1.9 million per annum in the financial year 05/06
and then escalating down, to the end of that column, to £25.2
million per annum.
245. That figure I mentioned in opening I said it
was relatively small to start with, it has grown up that is the
sum which is potentially available whereas if we look the B21
A on page 74 we saw for most of the period there was a small loss.
Looking at the toll coming in from the income it is substantially
up and it is that greater income from tolls which means that you
have that extra surplus which can be spent on the measures within
Merseyside in accordance with the local transport plan if the
is Bill approved.
That is true. It also assumes that every toll increase justified
by the RPI trigger in the Bill would in fact be adopted, I have
just assumed that to be case for the purposes of this financial
246. You will remember that in the Bill there is
a particular provision that every time you can have your RPI rise
first of all the PTA has to say, hold on a moment is it really
appropriate applying its statutory criteria to have the full RPI
increase or should we have either no increase or a lesser increase?
If they decide no increase or a lesser increase then that is
what happens, it does not happen so automatically. Do I summarise
You did, indeed. That is what I would have said if I had been
as erudite as Mr George.
247. Then if we turn the page to page 85, is this
another way of showing the matter. What is shown right at the
top is the amount which if raised, is available for public transport
subsidy, you may, of course, decide not to raise it, alternatively
it may that you have to spend more on refurbishment and there
is less available, there are a whole series of possibilities.
Yes, my Lord.
248. If we can just pause there. We are going on
to a different matter and approaching the matter as a treasurer
any treasurer is going to prefer a position where he has money
in hand as opposed to a situation where you are sometimes going
cap in hand, whether it be to the Treasury or the Department of
Transport or local authorities. I think the Committee might be
helped with your general observations on the effects of the Bill
so far as the financial matter is concerned?
It is difficult to know where to start. Being involved in the
financing of the Mersey Tunnels for the last 30 years has shown
just how it can go like a yoyo from a position of mounting
debts and large loses to a situation of effectively breaking even
over the last 11 years. It is almost as though we have reached
the second stage of the history of the first tunnel. I would
like to feel it has gone in three stages, the tunnel encountered
initial financial difficulty, it then had profitability until
the 60s, the profitability was caused because of traffic growth,
we got to saturation and we had to build another tunnel, we built
another tunnel, the Kingsway Tunnel, we had financial difficulty
with that additional facility, we moved to stage two, which was
profitability, at least stability as far the finances are concerned,
sowing the seeds for the third stage. I do truthfully believe
that unless we manage the traffic growth in the Mersey Tunnels
we will find ourselves having to build another crossing in a very
short space of time. The way that the financing limps along under
current legislation if I need to put the tolls up I have to undergo
a legal process which can take anything up to two years even though
it is in line with inflation, even though it is to try and overcome
a deficit position, even though that deficit situation may have
to be financed by local district councils, which means council
tax payers on Merseyside. I have said more than once if high
street chain stores priced their shirts using the same mechanism
their business would then fall flat. It is no way, in my view,
to run a business. The Bill gives first and foremost absolute
financial stability to Mersey Tunnels for all time. Secondly,
it has the ability to contribute towards the hypothecation for
public transport purposes, those are the two main things. I know
of no other way of managing traffic growth through the Mersey
Tunnels other than increasing the price through tolls for using
249. If I were your critic I could say that you
had your problems up to the early 1990s but really all that is
history and there is no need for present Bill if we leave aside
altogether the question of making funds available for public transport.
Do you have any observation on that matter, the suggestion that
in practice everything is okay?
I do not accept that everything is okay. I hope, my Lord, in 21A
and B do show just how touch and go the finances of the tunnels
could be over the next 25 years. I do not believe that that is
a solid foundation to run a business. Any of these factors could
be out in any of the years. The number of alternative variations
on this are absolutely endless. I have done alternative scenarios
with different inflation rates and they show a need for a toll
increase in 15 years' time because costs have gone up. It is all
hit and miss and it is not a sensible way to move forward in this
present day and age, in my view.
250. Let us move to and entirely different matter,
noise insulation. Schedule two to the Bill in Clause 109A (2)
says that "the Authority may carry out works for insulating
any dwelling or other building in the vicinity of approaches to
the Kingsway Tunnel against noise caused by the use of that tunnel"
Do you recall call that provision? .
Yes, I do. The intent is to deal with some 200 properties located
adjacent to those approach roads.
251.Could we go to your Exhibit B29, page 86. First
of all was I correct in saying the only problematic area was the
area in the Wirral at the West End of the Wallasey Tunnel?
Yes, you were quite correct. The plan does not show it entirely,
there are no residential properties adjacent to the exit road
of the Kingsway Tunnel on the Liverpool side of the river. The
problem is all on the Wallasey side of the approach road to the
Wallasey Tunnel at that point.
252. At page 86 you show various photographs of
houses, and one can see that they are, at any rate, quite close
to the road. When we were in another place, one of the members
of the Committee was very concerned as to whether one could improve
the road surface of the approach roads so as to mean that they
would be less capable of transmitting noise, but as far as you
are aware, are there any other remedies that are open?
I know of no other remedies, my Lords. The approach road follows
an old railway cutting. What we have done is to provide what
are called castellated, which are corrugated, walls to the cutting,
which absorb noise, and over the last ten years the carriageways
have been resurfaced with what is called "whisper" asphalt.
We have also provided wooden sound-baffling perimeter fences
on the land adjacent to the gardens of the properties which are
affected. That is as far as we can go. No other work is feasible,
mainly because we do not have sufficient space on tunnel property
for what the engineers, I understand, call soft landscaping,
which is the planting of trees, which would otherwise perhaps
absorb noise. We have done as much as we can without effectively
the powers to insulate the properties which are directly affected.
253. You have shown in red the area for the houses
which are likely to benefit, but am I right in saying that there
is no intention of using this plan as being definitive in any
way? The sole question is: is it a property where the noise limit
at the Royal Assent is in excess of 68 decibels and one decibel
or more is caused by the traffic on the tunnel approach roads?
That will be the way of defining the properties.
That is exactly the way we intend, my Lords, to apply this provision
if it is granted to us, but the plan is to give an indication
of the potentially eligible roads on which properties may stand
which are affected by the provisions that Mr George has mentioned.
254. The Petitioners would like there to be a more
specific identification of the particular properties. Do you
believe that would be helpful?
I think, my Lord, that is based on a slight misunderstanding.
The use of the word "vicinity" was not intended to
limit but to expand these provisions over the widest possible
area. We had in mind, for example, on a survey which was done
some years ago, that all the properties in a particular terrace
could be done except the last one because it was just outside
of the decibel limit. We felt that, by putting the wording of
the Bill in that way, we would capture the last one in the terrace
and give ourselves the widest possible scope for this, rather
than to put a limit and to rule someone out.
255. Are you able to give the Committee the budget
which you are allowing for these works?
We think there are at least 200 properties, and our estimate of
the cost is £300,000.
256. If it turns out there are more properties and
it costs more, that, again, would be the obligation pursuant to
That is entirely accurate, my Lords. This is an issue which,
funnily enough, surfaced in the local newspapers only two weeks
ago, and keeps coming back. It is one that we have tried to resolve
and cannot do so without legislation. That is clear. We are
anxious to try and do something to help these people.
257. Can we turn now to the use of the tunnel surpluses.
We know that there is a provision in the Bill that the first
call on them has to be the operational costs and refurbishment.
258. CHAIRMAN: Mr George, before we go on,
there is one thing that I have not heard Mr Wilkinson say.
We have gone over, again - and I am not happy with that because
we had the figure of £300,000 this morning, and I make it
clear I do not want to hear repetition of evidence that has already
been given. Once we have the evidence, we have it. What we have
not heard is on what you intend to spend this £300,000.
I do not think any of us intrinsically are against it at all,
but what is it going to be spent on? Are you raising the walls?
Are you putting double glazing in?
No, my Lord. It will be a combination of a number of factors
in accordance with the noise insulation regulations. I am not
an expert on this but my understanding is that it will pay for
double glazing for all the properties affected. It may well pay
for additional fencing to help baffle the noise. It may pay for
soft landscaping, again to help baffle the noise, on the land
which is owned by the property owners.
259. MR GEORGE: If I may interrupt, the
matters are dealt with in the noise insulation regulations. They
specify the only matters on which money can be spent, and it says
they include replacement or conversion to windows, provision and
installation of sound-attenuating ventilators, provision of air
supply ducts, and the provision in certain circumstances of other
flues and a series of matters which are specifically identified,
various forms of blinds and so forth. The matters are spelt out,
and these are standard in legislation for everyone affected by
a highway scheme. I emphasize they are not going to be Mersey-specific;
they are a standard package, as laid out in schedule 1 to the
noise insulation regulations 1975.