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Old problems threaten to derail new era of light rail

Britain stands ready to embark on new era of light rail through tram-trains, but the age old problem of skyrocketing construction costs threatens to derail the dream before a new tram even leaves the depot.

Last week NCE revealed that Network Rail was poised to pilot the first tram-train network in the UK. Glasgow is also keen on the idea and through a raft of recent funding announcements local transport minister Norman Baker has given his whole-hearted backing to a whole new era of light rail construction. But what has really changed to trigger this sudden change of heart?  

“Too expensive and under-used”. That was the damning verdict of the UK government’s public spending watchdog, the National Audit Office (NAO), when it reported eight years ago on the six light rail schemes in England built since the 1980s.

And it got worse: “Costs are rising. Proposed new schemes are on average £3M/km more expensive to build than those that have already been built,” said the NAO in its report Improving Public Transport in England Through Light Rail (NCE 29 April 2004).

At the time there were 12 light rail lines under development across the country, including Portsmouth’s South Hampshire Rapid Transit, Leeds’ Supertram, Liverpool’s Merseytram and extensions to Manchester Metro, all of which were scheduled to open in 2007. The then Labour government’s original 10 year plan for transport envisaged 25 such schemes nationwide by 2010.

In one blow the NAO sounded the death knell for them all. Not three months later, then transport secretary Alistair Darling, reacting to the report, struck every tram scheme from government transport planning.

Darling told the House of Commons that the projected cost to central government of extending the Manchester Metro had soared from £282M in 2000 to £520M in 2002. The cost to the public in Leeds had risen from £355M to £500M and in Portsmouth from £170M to £270M.

“No government could accept these schemes as they are on the basis of these cost escalations,” said Darling. “We cannot therefore approve them.”

The reasons were plentiful; but primarily were attributed by the NAO to a lack of standardisation; over specification to heavy rail standards; reticence to adopting new rail technologies; and, significantly, utility diversions being too expensive.

Fast forward eight years and Britain stands on the cusp of a new era of light rail development. Indeed, the coalition government has already confirmed funding support for the upgrade of the Tyne & Wear Metro and two extensions to Manchester Metro, announced its intention to support an extension to the Midland Metro and, most significantly, handed over £371M to allow work to start this January on phase two of Nottingham’s Express Transit.

Yet what has really changed? Certainly in terms of ridership, the latest figures are encouraging with total passenger journeys in 2010/11 of 196.5M up 5.5% year on year and an all time record. But what of tackling the soaring costs? Through Treasury body Infrastructure UK the political will is there to tackle issues such as lack of standardisation, over specification and Britain’s unwillingness to look abroad for better technologies – just look at the excitement surrounding tram-trains. But the big issue – the cost of utility diversion – remains utterly unresolved.

Scope for argument here is massive – in agreeing where the utilities are in the first place, deciding whether they need to be moved, working out a cost of moving them, and then providing access for maintenance and repairs.

A glance north of the border to Edinburgh, where its tram scheme promoter Tie spent much of the three years to 2011, when Tie disbanded, mired in acrimony with its contractor Bilfinger Berger over utility diversions, perfectly illustrates the problem. Audit Scotland, Scotland’s NAO equivalent, calculated in February 2010 that additional utility diversion works were contributing to an overall increase in project costs of £67M. That cost today is easily double that figure after Bilfinger Berger downed tools late in 2010 because of the dispute. Years earlier, in the case of Croydon Tramlink, diversions were estimated to cost more than £19M, nearly 10% of the scheme’s £200M construction cost. More recently, in the economic appraisal of Merseytram, a risk factor of 29% was placed on the estimated cost of diverting utilities, more than double the general project risk of 12.5%.

The issue of who pays is even more contentious – since 2000 the promoter of any light rail scheme must pay 92.5% of the cost of diversion compared to only 82% paid by the promoter of a highway or bridge scheme. The differential is intended to reflect the relative benefit derived by the utility company by the works. It seems unfair, but that unfairness pales into significance compared to practice in Germany where promoters pay between 60% and 80% of the costs depending on the utility involved or France, where promoters pay nothing.

Baker’s own review into light rail, published last September and on which he based his decision to press ahead with more schemes, highlights that the problem of utilities remains unresolved.

“The Department [of Transport] is aware that there are some differences of views between light rail promoters and the utilities sector on how best to deal with these issues,” says the report. “This is a very complex area and it is recommended that further work is undertaken to examine in more detail possible solutions that have been highlighted as part of this review.”

Unfortunately, they are not that inspiring. Options run from using lighter track-beds, which could demand less excavation and do less damage to utilities – a questionable theory, to other uninspiring moves such as diverting tram routes away from streets known to contain lots of utilities, accepting that sections of track will have to close regularly for utility works, or limiting utility works to off-peak hours. Hard to see many utility firms going for the latter option.

Baker believes the problems can be overcome and last November held a tram summit featuring all interested parties to thrash out the issues. An action plan was devised but not finalised. That needs to happen soon if his new tram vision is not to be derailed.

Readers' comments (1)

  • Michael Paul

    I don't understand why building tram lines in Britain is so difficult and so expensive. Other european countries such as Germany, which presumably have the same constraints regarding utilities etc. are extending their tram networks against a background of increasing usage. Could it be that the tram has a better image and therefore a better public acceptance here?

    Mike Paul, Stuttgart, Germany.

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