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What are the costs of Midland Metro expansion?

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At its April 2017 meeting, the board of the West Midlands Combined Authority approved a public consultation on its draft 2026 ‘Delivery Plan for Transport’ running until Friday 9 June 2017.

The consultation invites comments on TfWM’s proposals for spending hundreds of millions of pounds on schemes such as expanding light rail, and very light rail. But what it does not offer are any details on the economic, financial, and environmental effects of the proposals.

In fact, TfWM is refusing to release these details.

TfWM, planned Midland Metro and Very Light Rail lines (April 2017)

TfWM, planned Midland Metro and Very Light Rail lines (April 2017)

On 26 May 2016 BBC News reported that Birmingham's Midland Metro tramway had never made a profit in the 17 years since the line opened

On 26 May 2016 BBC News reported that Birmingham’s existing Midland Metro tramway had never made a profit in the 17 years since it opened.

[BBC, 2016-05-26]

National Express, which runs the Midland Metro, has lost about £34m on the route since 1999.

Actually, the amount National Express has lost on Midland Metro is not clear, because the tramway north of Snow Hill was built and originally operated by a consortium known as Altram, under a 23-year design – build – operate – maintain concession.

‘Profits’ were to have been shared between the consortium members Ansaldo, Laing, and Travel West Midlands (NX), but A and L walked not long after the tramway opened in 1999. It soon became clear that the whole system had been shoddily built and the ridership forecasts were completely wrong. NX threatened to hand back the keys if Centro (now TfWM) did not help it out, but the details of what agreement was struck have never been made public.

On 22 March 2017, the West Midlands Combined Authority announced that it would take ‘direct control’ of the Midland Metro tram service when the National Express concession finishes in October 2018. This means that future losses would have to be met from public funds. Obviously, every pound spent paying for Midland Metro losses is a pound not spent on libraries, social services, or fixing potholes.

[WMCA]

The move will enable TfWM, which is the transport arm of the West Midlands Combined Authority (WMCA), to plough millions of pounds of future profits back into expanding the network.

Existing National Express staff will be transferred over to a new subsidiary company – Midland Metro Ltd – which will be wholly owned by the WMCA.

The combined authority is set to start a number of extensions which will see the network triple in size over the next decade, with passenger numbers forecast to increase from around 6.5 million at present to more than 30 million.

That is expected to generate profits of around £50 million over the first 11 years which the WMCA will be able to channel back into the network for the benefit of passengers and the local economy.

[Councillor] Roger Lawrence, WMCA lead for transport, said: “Metro is a fundamental part of our future plans not only for transport but for the West Midlands economy as a whole.

“It is a proven catalyst for economic growth and is critical to best connect and feed into HS2 so we can reap the maximum economic benefits possible from the high speed rail line.

“The move will enable TfWM, which is the transport arm of the West Midlands Combined Authority (WMCA), to plough millions of pounds of future profits back into expanding the network.”

Given that the existing Metro has lost tens of millions of pounds, and only carries a fraction of the passenger volume originally forecast, what evidence is there to support TfWM claims that it is a ‘catalyst for economic growth‘, and would make profits in the future?

WMCA news story about taking direct control of Midland Metro

WMCA news story about taking direct control of Midland Metro

[TfWM response to FoI request, April 2016]

Q1. Requested data: the year-by-year cost and income forecasts for the Metro network in the future.

Answer: An assessment of the commercial model using benchmark data showing revenue and costs generated from the Metro operations has been carried out, to gain an initial indication of the financial performance of Metro. This information held is commercially confidential.


Q2. Requested data: the reports and analyses showing Metro has been a proven catalyst for economic growth (compared to other corridors not served by Metro).

Answer: This matter is addressed in extension Business cases which will be available on our website as and when they are approved.


Q3. Requested data: what information is held on the outsourcing process and the decision (e.g. who told the WMCA board that if it decided to continue outsourcing tram services it would cost taxpayers several million pounds).

Answer: The information held is commercially confidential and most of the information obtained was benchmarking data on other light rail schemes.


Q4. Requested data: information on the difficulty of defining the scope of services required from the operator.

Answer: The scope of services required will change as the Tram network develops and forecasting requirements at this stage is therefore difficult to predict. This approach provides the opportunity for WMCA to amend the fares which will impact the revenue growth and the business model and to work flexibly with the Midland Metro Alliance to adjust operational service requirements to match the emerging investment programme delivery, without being constrained by a fixed contract specification and performance regime.



Q5. Requested data: the assessment of the risks and advantages of bringing operations in house.

Answer: The information held is commercially confidential and most of the information obtained was benchmarking data on other light rail schemes.

Written by beleben

April 28, 2017 at 11:14 am

Posted in Birmingham, Centro, Politics

Conflicts, contradictions, and errors

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On 19 April, the House of Commons transport select committee questioned HS2 chairman David Higgins and transport secretary Chris Grayling about ‘the circumstances behind CH2M’s withdrawal from the HS2 phase 2b development partnership contract’ and the ‘lessons to be learnt’. As the government had announced a general election the day before, only a few members of the committee turned up, and mainstream media coverage was minimal.

Acording to committee ‘chair’ Louise Ellman MP, ‘Given the sums at money at stake’ in HS2, it is ‘essential’ for the public to have ‘full confidence in the processes’. But judging by what Mr Grayling and Mr Higgins said, there seems to be little reason to have confidence in the way HS2 has been, and is being, run.

HS2 chairman David Higgins and Chris Grayling MP at the transport select committee meeting, 19 April 2017

Chris Grayling told the demi-committee that CH2M had “lost a very substantial piece of business as a result of a breach in the rules”, that had “come to our attention because somebody inside the organisation told one of the other bidders.”

Despite that ‘breach’ only having come to light as a result of the actions of a whistleblower, Mr Grayling seemed to suggest that there was actually nothing very much wrong with HS2’s bidding process. He appeared to have no problem with CH2M’s Mark Thurston having being appointed as HS2 Ltd chief executive, or David Higgins’ tacit admission that there was not a level playing field for bidders (the scope of CH2M’s earlier work on HS2 having given it an advantage).

Mr Higgins stated he ‘did not know’ why CH2M had withdrawn from the phase 2b contract, but if they had not, they would have been sacked. (?)

[‘HS2 boss admits failures over conflict of interest’, Robert Lea, The Times, 20 April 2017]

The head of High Speed Two told MPs that he and his executives had done no checks and had not monitored a former HS2 chief of staff at the centre of a conflict of interest fiasco with its key contractor on the £55 billion London – Birmingham rail line.

Revelations that HS2 Ltd had been unaware that a former executive was playing a senior role at his subsequent employer CH2M — project manager of the first phase and named this year as the preferred bidder for the same job on the second phase of the controversial high-speed lines — have led to promises of new “intrusive” investigations of personnel involved in bids for the billions of pounds’ worth of contracts coming up for tender.

Mr Higgins also said that Bechtel would be awarded the contract after its bid came in ‘15% cheaper’ than third placed Mace. (HS2 Ltd has never published details of bid cash values, or their technical scoring, so there is an almost-total lack of transparency.)

www_parliamentlive_tv_david-higgins_chris-grayling_19apr2017-3

[‘HS2 to make firms name all people involved in bids’, Aaron Morby, Construction Enquirer, 20 April, 2016]

Sir David Higgins, HS2 chairman, said the body would now tighten up disclosure procedures after US consultant CH2M withdrew from a preferred development partner role on the second phase of HS2.

He revealed the move to tighten up bid requirements as he was quizzed by the Transport Select Committee about events leading up to CH2M being selected as preferred contractor.

CH2M had faced conflict of interest allegations from rival bidder Mace, after HS2’s former chief of staff Christopher Reynolds produced lessons learnt documents from phase one to inform the second phase development partner tender process.

After leaving HS2 last June, Reynolds went to work for CH2M in September.

Higgins said that HS2 had no evidence that Reynolds had influenced CH2M’s bid. But despite this CH2M withdrew “for their own reasons”, revealed Higgins.
[…]
In a statement after the hearing, a Mace spokespersons said: “As the Transport Select Committee has shown there are a lot of serious questions to be answered around HS2’s procurement process.

“If we hadn’t raised these concerns, these serious issues would never have come out.

“David Higgins admitted that HS2 needs to tighten up their process is an admission that the procurement was seriously flawed.

“It’s remarkable that he also admitted that if CH2M hadn’t withdrawn, they would have been sacked – which is a clear admission that their procurement process was riddled with errors.”

Transport select committee meeting, 19 April 2017

Written by beleben

April 21, 2017 at 11:49 am

Posted in HS2, Politics

Trains on a ship

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A contract to build cutting-edge HS2 trains ‘could be on its way to England’s north east’  (reported Consett Magazine in November 2016).

[‘North East Could Land £7.5 Billion High-Speed Train Contract’, David Sunderland, Consett Magazine, November 19, 2016]

The government has implied that it will try to make sure the trains are built in Britain. Chris Grayling, the transport secretary, said, “We will not simply bring trains in on a ship with no benefit for engineering skills or apprenticeships in this country. I want a genuine process that leaves behind a skills footprint.”

If the trains really are to be manufactured in the UK, it would be great news for the north east. The region has a high-tech train factory in Newton Aycliffe, owned by the Japanese company Hitachi.

The factory is already making Intercity Express Programme trains. These trains will start replacing existing stock on the Great Western Main Line at the end of 2017 and on the East Coast Main Line from 2018.

But surely “bringing in trains on a ship with no benefit for engineering skills” is pretty much how GB train procurement has been carried out for many years. For example, as should be clear from the Asahi Shimbun article below, the Class 800 IEP trains for the Great Western and East Coast lines are manufactured in Japan, not at the Hitachi ‘potemkin factory’ in Newton Aycliffe.

Built-up IEP train carriages in Japan were pictured on the Asahi Shimbun website

Written by beleben

April 19, 2017 at 4:49 pm

Posted in Industry, Politics

Exports on their mind

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The United Kingdom’s expertise in high speed rail, should be seen as a ‘potential export sector’, according to the ‘High Speed Rail Leaders’ industry lobby group.

'Potential export sector?' 'Potential export sector?'

[HSRILG response to the government’s Industrial Strategy Green Paper, April 2017]

[…] In order to take advantage of these opportunities [in the high value growth sector in the global growth area of high speed rail] we should explore the creation of a “HS2 International” which brings together HSR delivery businesses and the government-owned client body HS2 Ltd to create a public-private partnership to market the UK skill base and experience abroad, offering a whole exportable package to potential customers.

How much credible domestic expertise the UK can present in overseas rail markets, must be open to question. If such expertise existed, then why are large parts of the GB railway network operated by foreign companies, such as Deutsche Bahn, MTR (Hong Kong), and SNCF? And why is virtually all new passenger rolling stock imported?

Written by beleben

April 11, 2017 at 10:54 am

David Higgins and HS2 carbon emissions

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In December 2016, HS2 Ltd chairman David Higgins told the House of Commons transport committee that high speed rail ‘is a very carbon-efficient way of moving people… If you compare trains with buses they are much more efficient.’

[House of Commons Transport Committee, Oral evidence: High Speed Two, HC 746, 12 December 2016]

Q88. [Chair:] Will High Speed 2 result in a reduction of carbon in the environment?

[Sir David Higgins:] It should, because it is a very carbon-efficient way of moving people. The railway can move 18,000 people an hour so it is very carbon efficient in terms of delivery. I remember seeing the stats. If you compare trains with buses — obviously it depends on the occupancy of the trains themselves — they are much more efficient.

Q89. [Chair:] What is the latest estimate for carbon reduction?

[Sir David Higgins:] I do not know that. I do not want to tell you a figure off the top of my head. I will get my experts behind me to write to you about that.

Q90. [Chair:] We would like to have that information, please.

So has the HS2 chairman provided evidence that High Speed 2 would

  • result in a reduction of carbon in the environment
  • be much more carbon efficient than buses — such as National Express, and Megabus?
HS2 chairman David Higgins (ITV)

HS2 chairman David Higgins

Written by beleben

April 5, 2017 at 9:19 am

Posted in HS2, Politics

Euston Greengauge dissemblance problem

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In December 2012, Greengauge 21 stated that claims about trains leaving Euston in the evening peak being only half full were ‘wrong’.

www_greengauge21_net_news_euston-we-do-have-a-problem

[Greengauge 21]

While this is true for Virgin Trains (52% seats occupied),

(So, Greengauge 21 accepted it was true, as far as intercity was concerned.)

[Greengauge 21]

Network Rail has pointed out that London Midland – which runs the commuter services – is at 94% capacity, and traffic levels are growing at 4% a year.

If London Midland was at ‘94% capacity’ around 2012, and traffic levels grew at 4% a year, surely that would mean it was at ‘97.7% capacity’ a year later, and ‘101.6% capacity’, a year after that.

But according to London Travel Watch, London Midland’s “passengers in excess of capacity” (PiXC) count in 2014 was lower than in 2013.

London Travel Watch, 'PixC, London and South East train operators 2013 and 2014'

London Travel Watch, ‘PixC, London and South East train operators 2013 and 2014’

The statement that London Midland was ‘at 94% capacity’ looks like misleading nonsense.

There is enormous scope for increasing commuter capacity out of Euston (by running longer trains, intensifying the use of the slow lines, etc).

Written by beleben

April 4, 2017 at 9:48 am

Posted in HS2, Politics

Tagged with

The step-free route in HS2 inclusivity

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Setting new standards in customer experience and inclusivity ‘requires HS2 Ltd to deliver a step-free route from street to seat’.

Setting new standards in customer experience and inclusivity 'requires HS2 Ltd to deliver a step-free route from street to seat'

‘Step free inclusivity’

But would that ‘inclusivity’ include stations on the legacy network — such as Newcastle upon Tyne, York, Liverpool Lime Street, Stafford, Carlisle Citadel, and Sheffield Midland?

Department for Transport tweet mentioned only step-free access at *new* HS2 stations

A Department for Transport tweet mentioned only step-free access at new HS2 stations

How double deck HS2 captive trains — as proposed by Alstom — could ever be fully ‘step-free’, is difficult to imagine. Access to seats on the lower deck might be possible without steps, but would probably entail steep ramping from vestibule level.

One of the opportunity costs of HS2 is no remediation of hundreds of inaccessible stations on the existing rail network

One of the opportunity costs of HS2 is no remediation funding for hundreds of inaccessible stations on the existing rail network

Written by beleben

April 3, 2017 at 1:16 pm

Posted in HS2, Planning, Politics