Commons Transport Committee news release: (3 April 2005)
Don't stall for time over tram schemes, say MPs
Some new tram schemes do have a future in this country, so the Department for Transport had better improve the way it assesses them. This is the key finding of the latest Report of the House of Commons Transport Committee, published today.
The Committee found that tram schemes could offer clean, high-quality, accessible urban transport on busy routes, despite their high initial capital cost. With enough passengers, trams could even be cheaper than buses, and low passenger numbers were not inevitable.
Despite these advantages, it seemed to the MPs that the Government no longer wholeheartedly supported trams. The Report says it is up to the Department for Transport to give a strategic lead.
The Chairman of the Committee, Mrs Gwyneth Dunwoody MP, said:
“Trams aren’t a magic answer to every transport problem. But they certainly aren’t anywhere near as crackpot as some people would have us believe.
“The local bodies promoting light-rail schemes now work closely with planning authorities to ensure their schemes provide effective public transport and support regeneration. That wasn’t always the case in the past.
“Tram schemes cannot simply be written off as too expensive. It is more complex than that: the problems come because the Government takes a long time to make decisions, the private sector is supposed to bear the risks, and then everyone seems surprised that those risks now have a price attached. To cap it all, the deregulated bus system outside London prevents local authorities from ensuring trams lie at the heart of an integrated transport system.”
The cost of building new tram systems has escalated hugely: the estimated cost of Phase 3 of the Manchester Metrolink rose from £282m in July 2000 to £900m in 2004. This led to the Government revoking funding approval for this scheme, and others in Leeds and South Hampshire. It is now considering revised schemes. But MPs were told that building a light rail scheme in the United Kingdom could cost an astronomical 60% more than building one somewhere else in Europe.
The Committee found that these high costs were caused by:
• It no longer being possible to transfer revenue risks to the private sector without greatly increasing costs;
• A planning and approval process which meant that tram schemes in the UK took 5 to 15 years to deliver, compared to the 4 or 5 years abroad. This increased the risks to the private sector scheme consortia, who charged accordingly;
• Lower than expected ridership on new tram schemes, which reduced fare revenues and made future schemes more expensive, by increasing the risks priced into contracts with the private sector;
• The lack of powers for local authorities outside London to ensure that buses and trams formed an integrated system. This led both to lower tram ridership than forecast, and services which were less convenient for the passenger; and
• The high cost of relaying gas mains and other utilities away from new tram tracks.
The Committee’s Report recommends that:
• The Department for Transport builds up its own expertise on trams, and shares that expertise with promoters of new schemes.
• The Department gives clear guidance about the circumstances in which it is prepared to consider new tram schemes.
• The Department deals with schemes more quickly, since delays drive up costs.
• The Department urgently reconsider the amount utility companies are paid for the diversion and relaying of services.
• Local authorities should have more power to control their bus services
House of Commons Public Accounts Committee (5 April 2005)
Many similar points were raised in a narrower report by the Commons Public Accounts Committee, released two days after the Transport Committee report. The Public Accounts Committee took evidence only from the Department of Transport and followed the line of the National Audit Office report last year, which was welcomed by Centro. (news release)
Link to Public Accounts Cttee report (PDF version)
PTEG response to this report:
Kieran Preston, Chair of pteg, said:
'We are pleased that MPs have recognised the benefits that light rail can bring to Britain's city regions. The Committee has also made some solid recommendations about how in the future light rail can be delivered faster, better and cheaper. We share those aims and we are already working on many of the issues that the Committee has raised - including simpler and more cost effective procurement, greater standardisation, and cutting the cost of utility diversion. The main task of the newly established UK Tram - which brings together the industry and promoters - will be to make sure we ramp up the benefits from new light rail schemes, while simultaneously reducing the costs.'
Whilst pteg is building on the lessons of existing schemes it remains committed to promoting light rail and modern tram schemes where they are the right option for busy urban corridors. This is in line with the findings of Sunday's far more comprehensive House of Commons Transport Select Committee investigation which found that: '*there is ample evidence light rail offers high quality, accessible, urban transport that is comparable in whole system costs to high quality bus systems, and is more likely to achieve modal shift from cars, reduce congestion and assist regeneration than any other urban mass transit system currently available.'
Kieran Preston added:
'All operational UK light rail schemes are near, or at, capacity in the rush hours with passenger numbers continuing to rise. Crucially light rail is attracting motorists out of their cars in massive numbers. However, as both the House of Commons Transport and Public Accounts Committees have shown - we need a framework from Government which will allow us to implement the next generation of schemes more quickly, more cost effectively and as part of fully integrated public transport networks.'
