Rail 487: Light rail is trapped on tramlines of a mistaken model

New light rail systems have proved expensive and some are failing to meet predictions of passenger numbers, but CHRISTIAN WOLMAR believes Britain is using the wrong model to develop them.

When Alistair Darling left the recent opening of the Nottingham tram line, he apparently muttered to his advisors that he hoped this was the last opening of an overpriced, over-budget system that he would have to attend. Indeed, that has very much been the attitude of the Department for Transport towards tram systems.

Sure, ministers like cutting the ribbon in front of shiny new trams but are very sceptical of the benefits in relation to high costs of the schemes and wonder if it is worth it. “What’s wrong with buses?” they often ask in private.

The answer is that while buses are obviously useful, they do not have the cachet of tram systems. To put it baldly, they do not attract the middle-class users who will abandon their cars in favour of public transport. Trams have a modern and forward-looking image which is impossible to quantify. You only have to look at the publicity material for tourismput out by these cities which always shows their gleaming new tram, usually whizzing past the town hall.

The Nottingham tram was on the national TV news on two successive days in the last week ofApril for stories unrelated to transport. Within weeks, it has become the emblem of the city almost as much as RobinHood.

One of the great crimes of the post-war period was the removal of trams from our city centres. Only the trams along the seafront at Blackpool survived the cull instigated by the love affair with the motor car. Planners of the 1940s and 1950s simply failed to work out that however many roads they built, they would not be able to cope with the numbers seeking to enter town centres to work. In a desperate but failed attempt to accommodate the growing numbers of cars, the tram tracks were ripped out but, as we know now, to no avail.

Many European towns followed suit, but those which did not, principally in Germany and the Scandinavian countries, have benefited enormously because light rail systems – as they are now known – are the most cost-effective and popular rapid people-mover for heavilyused transport corridors. In Britain, new systems have been reintroduced in half a dozen places since 1992 when the first line in Manchester started operating, and they have proved hugely popular with local people.

But, as the recent report from the National Audit Office shows, the systems introduced in the UK have proved expensive to build and several have not reached the passenger number targets set for them. This does not, however, mean they have failed, but simply that the wrong methods and analysis have been used to assess their performance and achievements.

The reason for the high cost is the way that schemes in UK are drawn up, implemented and funded. Ignoring the Docklands Light Railway (which in reality is a conventional rail system rather than a light railway) each of the six schemes built over the past decade has cost more than £140 million.TheDepartment for Transport pays most of the construction costs but then requires the systems to be selffinancing. The schemes, however, cannot be run by the local authorities which have initially proposed the idea. Instead, the Government insists they are operated by private sector consortia of construction companies, financiers and operators which design, construct and run them.

This, however, is an inefficient way of building and running such projects. These deals are partnerships of the unwilling forced into these arrangements as a way of making money.As Peter Hendy, the director of surface transport at Transport for London, who was involved in the contract for Croydon Tramlink when he was at FirstGroup, put it: “Why is a construction company interested in a 99-year concession to run trams in Croydon? The answer is that they are not.They are interested in building it, and getting out.”

Hendy says that a lot of money was wasted because theGovernment insisted on a scheme in which, supposedly, the private sector bears the risk. First, there are all the advisers – the lawyers and consultants – who are in limited supply and thus able to charge very high rates.

Then there is the issue of risk. The private consortia all costed the risk into their bid prices – if they thought they might lose £20m on the deal, they just added that amount to the contract, and since all the bidders do that, the money simply comes out of the public purse.

Despite all these clever advisers, the Croydon scheme has been a financial failure, but a transport success. The predictions of numbers of passengers which had to be put into the scheme to make it look viable were simply over-optimistic. The number of users, however, is an impressive 19 million, but that is a 24% shortfall on the forecast. TfL has refused to pick up the bill and the private sector has taken a hit, but this means that it has become more reluctant to bid for the 25 new lines the Government would like to see built by 2010 (a target accepted as unachievable).

British tram schemes are also hamstrung by legislation governing competition. In France and Germany, which the NAO visited, systems are fully integrated with other forms of public transport. Buses feed the trams rather than running alongside in competition as they do in the UK. That is because the local authorities in Europe can specify transport services for a whole area, whereas in Britain, thanks to deregulation not reversed by Labour, councils do not have that power. There are other differences which make the European light rail systems more viable. They are subsidised, in recognition of the useful role they play in improving city environments and regeneration, and do not have to pay the cost of moving utilities, as do British projects.

The enormous benefits of tram systems are highlighted in a timely study by Todd Litman of the Victoria Transport Policy Institute (Canada not Australia). He found that cities with extensive rail systems were more affluent and successful than those which only operated buses. Accident rates and transportation costs were lower and economies more successful.

Light rail therefore brings benefits to areas which cannot be captured through the fare box, so government, local or national, has to fund them. And the best way to do that is, as in France and Germany, through simple direct mechanisms and not by trying to draw up daft complicated private finance schemes which, at the end of the day, cost far more.

Of course, the really radical option would be to try to capture some of the benefits which local landowners receive through increased land values stimulated by a new tram line. That is one option being considered for Crossrail and is already used in the US.

So next timeAlistair Darling visits a scheme, he should consider these wider aspects of the light rail story. In a sense, though, his thoughts as he sped off in his ministerial car were correct, but not for the reason he thought. The British way of developing light rail systems is the wrong one because it seeks to impose a dogmatic and complex model on what should be a simple idea.

Shinkansen show-offs

The timekeeping of the Japanese railways is already legendary. But the latest press release from JR Central, which runs the Tokaido Shinkansen high-speed line, is a wonderful bit of corporate gloating which shows that its performance exceeds our wildest dreams.

JRCentral, it says, “is proud to announce an average delay of 0.1 minutes per train for the year ending March 31 2004”. That, in other words, is a mere six seconds per train ( RAIL 486). In fact, the figures refer to the “average of all late departures and arrivals of one minute or more [we count only those of five minutes or more] including delays caused by natural disasters such as heavy rain, typhoons and heavy snowfall” – a neat reminder that their weather is a triflemore intemperate than ours.

It is, the company claims, a triumph for privatisation because in the nationalised days, from 1972-86, delays were 3.1 minutes per train, obviously a totally shocking record! As well as illustrating that the Japanese know how to run railways – while it is privatised, it is a fully integrated operation – it demonstrates their better way to count train delays.

Passengers can relate better to an average delay per train rather than a percentage being late – they could even factor that into their appointments, as long as they understand it is an average.We may never get to 0.1 minutes per train but at least we would have a better idea of how the industry is performing.