BRITAIN’s Deputy Prime Minister John Prescott has unveiled plans for a massive increase in public and private investment in rail over the next 10 years. Presenting Transport 2010 on July 20, Prescott set a target of lifting passenger-km on the national network by 50% and freight tonne-km by 80% by 2010. London Underground passenger-km are expected to grow by between 10% and 20%, and light rail traffic should double.
Total investment in Britain’s railway is set to exceed £60bn over the decade from April 1 2001 to March 31 2011. The national network will absorb £49bn, and ’up to 25 new light rail lines’ outside London will cost £3bn to construct and equip. London Underground’s spending profile is subject to the outcome of the Public-Private Partnership bidding now under way (RG 3.00 p160), but the expectation is that investment in overcoming a backlog of renewals will reach £6bn during the period.
Urban rail projects in London will be for the new Mayor, Ken Livingstone, to initiate. However, the government has allowed £3·5bn for CrossRail or a similar east-west link to be completed during the decade. It has also pencilled in cash for at least two light rail projects and DLR’s City Airport branch (below). Conversion of LU’s East London line into a second north-south cross-city link is included in the national rail budget.
Transport 2010 allocates £4bn for ’gauge enhancement, new terminals, new rolling stock and capacity’ to meet a projected 80% increase in freight volumes by 2010. This would increase rail’s share of the British market from 7% to 10% by 2010. Revenue support ’will continue to be available to help defray the costs of freight operators’ track access charges’. By comparison, the total freight grant paid out in 1999-2000 was a mere £23m.
The £49bn for national rail breaks down into £34·3bn of private cash and £14·7bn of public funding channelled mainly through the Shadow Strategic Rail Authority. In addition, there is £14·3bn of ’public resource expenditure’ which approximates to the revenue grants currently paid to the passenger Train Operating Companies by the SSRA and the Passenger Transport Executives.
SSRA Chairman Sir Alastair Morton promised last year that he would arrest the steeply-declining subsidy profile which has diverted to the Treasury all the extra revenue earned by the TOCs from carrying more passengers, leaving nothing for investment. Fig 1 shows ’public resource expenditure’, which was £1·5bn in 1999-2000, dipping to £1·3bn and then drifting back up over the decade.
But the new element is the ’public investment’ (orange), which was supposed to disappear forever when Railtrack was privatised in May 1996. It re-emerged in 1998 in the form of higher freight facilities grants and £100m for the SSRA to pump-prime small projects, but is now hugely expanded. SSRA will use the bulk of it to lever in private capital through partnerships where the financial return on the investment would not reward the risk involved. It represents in tangible form the social and environmental benefits of rail which train operators are unable to capture through fares or freight revenues.
Total investment, which was already rising steeply from around £1·2bn a year in the run-up to privatisation, is set to peak at £6·1bn in 2004-05, when work on Section 2 of the Channel Tunnel Rail Link coincides with resignalling of the West Coast Main Line. From 2007-08 it drops back to around £4·2bn, but this is still 50% more than the £2·9bn invested in infrastructure, rolling stock and the CTRL last year.
CAPTION: Fig 1. Over the next 10 years around £60bn will be invested in Britain’s rail, metro and light rail networks: £34·3bn from the private sector, £14·7bn of state investment and £14·3bn of ’public resource expenditure’
