Examination of Witnesses (Questions 20
WEDNESDAY 30 JANUARY 2002
20. To put it a different way, if motoring costs
go down, what does that do to your projections, for example, in
passenger modal shift?
(Mr Rickett) The 10 Year Plan is based on an assumption
that motoring costs will go down by 20 per cent, in real terms,
over the ten-year period; and that is one of the reasons why traffic
is forecast to continue to grow, over the ten-year period. We
think it actually offers more value, I suppose, in the sense that
you were using it, to concentrate on tackling congestion, pollution
and the other adverse impacts of traffic, rather than on trying
to force down overall traffic levels, because it is the harmful
effects of traffic that surely matter.
21. And you do not think that transport costs
will have an effect on that, particularly on motoring?
(Mr Rickett) Clearly, if we held general traffic costs
level, instead of predicting a decrease, you would see less traffic
growth and you would see lower emissions of CO2, for instance,
but you would be imposing very significant costs on a lot of road
users. If you can achieve the same outcome by more targeted measures
then that should be a better policy, I would have thought.
22. Can I start off with capital allocation,
looking at the funding that has been set out within the 10 Year
Plan. The figures for rail capital investment allocation, the
£34.3 billion from the private sector, £14.7 billion
from the public sector, does that figure, the £14.7 billion,
include sums that are already being spent on Channel Tunnel Rail
Link, phase one, and the West Coast Main Line?
(Mr Rickett) Yes; and, in fact, the £14.7 billion
of public investment in rail is the figure in the 10 Year Plan.
That has been adjusted since, as you are aware, so I think the
corresponding figure is now £18.5 billion.
23. How much of that £18.5 billion has
already been allocated to current projects?
(Mr Rickett) I could not say, off the top of my head.
24. Right; do you have a rough idea? Obviously,
you did the numbers work when you were doing the Plan to establish
the figures, and I wondered how much was available to new projects,
how much was for projects already in development?
(Mr Rickett) I do not know whether Richard Bowker
will be able to give you better information on that, but I would
not want to make up a number, off the top of my head.
25. Would you be able to give the Committee
a note on that, do you think?
(Mr Rickett) We can do that, yes.
26. When you were doing the planning for this
document, you set in place the target of 50 per cent increase
in the number of rail passenger kilometres; now what work did
you do on cost capacity planning to set that figure, and does
the projected increase in passenger numbers marry up with the
projected increase in capacity?
(Mr Rickett) What we did was to do an analysis, or
a forecast, of passenger demand, and what that said was that economic
growth, lower fares and road congestion among other things,
but those are the main drivers, I think our model suggested
would increase demand on the railways by 36 per cent, but that
capacity constraints on the network would constrain that growth
to 23 per cent. We estimated that, if we could remove those capacity
constraints and improve service quality and capacity on the network,
that might generate the additional demand above the 36 per cent
to take it up to 50, I think 51 per cent is actually what the
Background Analysis document says. Part of it was about providing
the capacity and service quality improvements not just to meet
the demand but to induce demand on the railways.
27. But the capacity increase projected, which
you said was, the capacity constraint was initially 23 per cent,
the capacity increases set out in the Plan do represent a 51 per
cent increase in capacity as well?
(Mr Rickett) We believe that the provision made in
the Plan would be sufficient to provide the capacity needed to
meet 51 per cent, or 50 per cent.
28. The reason I am asking the question is,
if capacity goes up 35 per cent and passenger growth goes up 50
per cent, the rest of that is extra congestion. So I think it
is quite important to understand whether there really is a 50
per cent increase in capacity to marry a 50 per cent increase
in passenger growth?
(Mr Rickett) Sorry; our aim was to meet demand without
an increase in overcrowding.
29. Right; so does the Plan deliver the capacity
to do that?
(Mr Rickett) The Plan made a provision that, at the
time, we estimated was sufficient to do that. We always said,
in the Plan, that the actual decisions about what was going to
be invested in, and further detail, was going to be provided by
other processes, and in the case of rail, by the Strategic Rail
Authority's Strategic Plan, and, in the case of roads, for instance,
by the Multi-Modal Studies, and, in the case of local authorities,
by the Local Transport Plans, and so on. So it was a top-level
Plan that set ten-year public spending figures, set the sorts
of targets we thought could be met, illustrated what could be
delivered and set a challenge for those who are responsible for
delivery to meet those targets and to deliver what we were expecting.
30. So did you do detailed work on the ability
of the projects that you highlighted in the 10 Year Plan (a) to
deliver that capacity increase, and (b), perhaps more importantly,
to be practically completed within that ten-year period; so was
there that extra level of work that said, "Here's our high-level
Plan; can this actually be delivered, is this realistic?"?
(Mr Rickett) It was based on an assessment of what
would be needed to deliver that additional capacity, and that
it could be delivered within the ten years.
31. So you were absolutely certain the projects
that you detailed there were deliverable within that time?
(Mr Rickett) That was our assessment at the time.
32. What assumptions did you make on fare levels,
on the railways, in particular, but across the board, in public
transport terms, in looking at the Plan?
(Mr Rickett) If I remember rightly, the assumptions
about rail fares were continuing the RPI-1 regime for the regulated
fares, and we published, in the Background Analysis document,
some sensitivities on what happens if you followed different fare
33. Are you still confident that RPI-1 per cent
is deliverable and will deliver the finance that is required to
put the SRA Plan into practice?
(Mr Rickett) In terms of generating income, it is
not just the fare path you need to look at but the number of passengers
who are using the service. That was the assumption we made. I
have got it now in front of me, it was RPI-1 for regulated fares,
and RPI for the unregulated inter-urban fares. Well, as you know,
the SRA are doing a review of fares policy, but that is the assumption
that we set out in the 10 Year Plan.
34. A final point, on Light Rail. The Plan appears
to require some considerable financial input from congestion schemes,
in order to deliver the full range of schemes that the Plan would
aim for. Can you give us a sense of, in practical terms today,
what the impact is likely to be on schemes that may be coming
down the track; and, also, a sense of the contribution you believe
is realistic for Light Rail to make, in all of this?
(Mr Rickett) You have mixed up two questions there;
one is about Light Rail and the other seemed to be about congestion
charging, if I heard you right.
35. My understanding is, you need the cash from
congestion charging to pay for Light Rail; there is an assumption
in there that the authorities who would be embarking upon congestion
charging schemes will deliver those schemes. If that does not
happen, what is the situation for Light Rail, how much of the
ambition for Light Rail can be achieved?
(Mr Rickett) We did not actually say, in the 10 Year
Plan, that we were forming a necessary link between congestion
charging revenue and Light Rail schemes. We were saying that,
for Light Rail schemes, we would expect a contribution from the
local authority, and part of that could be, if they chose, from
congestion charging revenue. There is a separate issue about what
happens if they do not generate that revenue, but there is not
a sort of one-to-one correlation with Light Rail schemes. We have
already approved nine Light Rail schemes and there are at least
another four in the pipeline, and I think others over the horizon;
so we think we are reasonably on track to meet our 10 Year Plan
target of doubling Light Rail use over the period. I think we
had a 27 per cent increase in Light Rail use, albeit from a low
36. Doubling does not seem a very ambitious
target, when you started with only the Manchester Metrolink and
the Croydon Tramlink and the Birmingham system. If you were being
ambitious, it would be much more than doubled?
(Mr Rickett) We will be continually examining our
targets to make sure they are ambitious.
37. Tell me, on targets, Mr Rickett, have you
got a sort of line of progress to monitor the 10 Year Plan and
how the objectives are being achieved in that period?
(Mr Rickett) We have been trying to develop a baseline
set of assumptions about the delivery of projects under the Plan,
based on the assumptions we made in the Plan, so that we can compare
what decisions are being made by local authorities and others
and how they match up with what we were assuming in the Plan.
Obviously, also, we will be using available statistical information,
to monitor what is happening against our targets, such as the
congestion target, the Light Rail target, the bus target, and
so on. We have some purely internal sort of indicators about how
we might want to make progress against those targets, but those
are really performance indicators, they are not additional targets,
they are just to give us a feel for where we might be departing
from the Plan.
38. "Target" is a word I have not
used, I talked about objectives.
(Mr Rickett) Sorry; yes.
39. And it is that sort ofI understand
what you are saying, but
(Mr Rickett) A very important distinction.