REPORT ON UK TRANSPORT INFRASTRUCTURE SUMMIT
14 April 2016 | Author: David Fowler, Editor, Transport Times
Report compiled by David Fowler, Transport Times. Additional reporting by Mike Indian, DeHavilland
Investment in transport infrastructure is higher on the political agenda than it has been for decades. The National Infrastructure Commission has been created to develop long-term plans and encourage political consensus. The Government has pressed ahead with plans for High Speed 2; with last month's Budget it accepted the NIC's recommendations to press ahead with developing plans for improved transport links in the north of England and for Crossrail 2. Highways England has been created, with a five-year investment plan to match that of Network Rail.
So it was entirely appropriate that NIC chair Lord Adonis delivered the keynote speech to the Transport Times UK Transport Infrastructure Summit, hosted by KPMG in London this week.
Over two days the summit looked at the prospects for all transport modes. Separate sessions considered high speed rail, the case for investment in the conventional rail network, Crossrail 2; highways, ports and airports. Network Rail chair Sir Peter Hendy; London transport commissioner Mike Brown; HS2 chief executive Simon Kirby; Highways England chief executive Jim O'Sullivan and a host of other key transport figures.
Our summary of events starts below with day one...
Lord Adonis said long-term planning of infrastructure was difficult because politicians rarely looked beyond the next election. What forces long-term decisions, he said, is a "when a sense of crisis in getting through the next election is so great you have to take decisions that impact on the longer term. When that point of crisis comes then decisions have to be taken that affects the very long term."
It was unusual for long-term planning to achieve this by itself. "The way to get decisions taken long-term is to set up a 10, 15 or 20 year plan, but what gets the decision taken is a sense of immediate crisis."
With that caveat, six years and three months since he set up HS2 while transport minister the hybrid bill for the project would have its second reading in the Lords this week. Construction was due to start next year and the line would open in 16 years from its inception. "That's about as fast as it's possible to be," he said. Similarly Crossrail would have taken 12 years from the introduction of its hybrid bill to completion.
A new runway at Heathrow, ostensibly more straightforward, was an "impossible" decision to take because of the politics surrounding it.
The National Infrastructure Commission, which Lord Adonis chairs, was set up to help create a long-term narrative and consensus between the main parties. Following its reports on energy, transport in the north of England, and Crossrail 2, it had been asked to look at the Oxford-Cambridge-Milton Keynes east-west rail project and a 30-year "horizon scanning" project.
Crossrail 2 had been a "masterclass" in how to go about planning an designing big infrastructure projects in the last three years, as had HS2. In Crossrail 2's case this had allowed it to reach a stage where the Chancellor had given a commitment to a date. "The crucial thing for Crossrail 2 now is that the next London mayor lives up to the commitment to provide London's part of the finance," he said.
The Oxford-Milton Keynes-Cambridge corridor is one of the most significant growth corridors in the country which presents "a massive challenge of housing and transport connectivity".
"Outside Milton Keynes itself its very difficult to get new settlements," he said. "We hope over the next year and a half it will be possible to put together a transport infrastructure plan alongside a plan for new settlements that's politically saleable." He added: "Over the 70-mile corridor there are 10 presently or soon to be disused major ministry of defence sites, all of them potential new towns or villages if connected up properly. I hope we can put together a plan for completing the east-west rail link, with enhanced road transport infrastructure and with new settlements: that would be a genuine win-win."
The last new town to be designated in the UK was Milton Keynes, he said. "That was also the year we closed the Oxford-Milton Keynes-Cambridge rail line."
Session 1: Multimodal integration across the Regions; Rail, Road, Ports, and Airports
Chaired by David Begg, Chief Executive, Transport Times
Mike Brown MVO, Commissioner, Transport for London
David Brown, Chief Executive, Transport for the North
Ailie MacAdam, Managing Director for Europe & Africa Infrastructure, Bechtel
London and the north – investment 'not a zero-sum game'
Mike Brown, London transport commissioner, said the creation of the National Infrastructure Commission was something to be celebrated. "A cross-party approach to decision making is something a lot of us have been hoping for for a long time," he said.
He was "delighted" that Crossrail 2 was being taken forward, but also about the commitment to invest in infrastructure in the North. "We're not in competition. It's not a zero-sum game," he said. "Decent transport connections serving northern cities are good for the UK economy as a whole and therefore good for London an our other great cities too."
He welcomed the fact that both the main mayoral candidates were committed to continued investment in the city's infrastructure, but added: "You have to keep making the case." The Victoria line had a marginal business case when it was built. "No one thought it would be used. Now we're about to run 36 trains per hour."
Crossrail, when opened in 2018, "will make a phenomenal difference", he said, "providing 10% of additional capacity on one fell swoop. It's really going to transform this place and the investment decisions of multinationals about where to locate."
With the city's population set to grow to 10 million by 2030, Crossrail 2 would "really be needed", he said. With numerous projects going forward at the same time, "hungry for the same resources", Crossrail chairman Terry Morgan's work on skills would be very important.
The objective of transport for the North was to unlock the value of the North's asset base, said TfN chief executive David Brown. "In all the advice, one thing that is consistently proven is that good connectivity within your economic base is essential to economic growth."
He added that "One of the challenges I will have is ensuring TfN, made up of the elected mayors of the local transport authorities, can speak with one voice on strategic transport issues, so we've got one consistent political voice aligned with the business community to make the case for infrastructure and transport investment."
He said: "It's not about the North taking money that would otherwise go to London. It's complementary. It's about increasing the country's total spending on infrastructure."
Over the next 12 months TfN would develop a strategy for the whole of the North with clear priorities for improvements to the strategic transport networks. "It's more complex than London," Mr Brown said. "There is not a Canary Wharf in the North. We need to move people between the big economic units of the north, not just Leeds and Manchester."
It would strike a balance across modes, covering road and rail, freight and people. A frustration was that the national road and rail networks were looked at in silos, with Highways England and Network Rail working almost in isolation. "One of our objectives is to make sure we're taking integrated decisions," he said.
The strategy would produce a clear plan of requirements for the North. "In the past the North has had to go for whatever it could get. Our long-term plan for the whole of the north will include road, rail, ports and airports so that the private sector can take business decisions. We will have to prioritise according to funds available, but we shouldn't compromise at the start, by saying will this be affordable in 10 or 15 years time. Without that aspiration within our long-term plan we will always be hand to mouth, trying to deliver schemes on an ad hoc basis."
Constructability, deliverability and integration
Bechtel managing director for Europe and Africa infrastructure Ailie MacAdam said 30 years' experience on complex multimodal transport projects such as High Speed 1 and Crossrail and many more had taught her: "It's all about deliverability and constructability".
A huge part of Bechtel's role as delivery partner and contractor on such projects was looking at how the new or upgraded infrastructure would integrate with other modes of transport. An example was the transformation of St Pancras International into a multimodal interchange as part of High Speed 1. This integrates international and domestic high speed rail with six Underground lines, 14 bus routes, taxis, the Midland main line, Thameslink, and airport coach connections, as well as providing for pedestrians and cyclists. There are pedestrian entrances on all sides of the station; there is a dedicated taxi lane and a new bus stop near the station entrances. Sophisticated computer modelling was used to analyse capacity and make it "as pleasant to move around the station." Passengers flow freely from international to local services without getting lost.
But a key part of delivery was not losing the trust of travelling public already using the station. "There was extensive engagement with all the stakeholders and decision-makers. They all had to be bought in to deliverability and constructability to deliver these projects safety to budget and to time," she said.
Session 2: High Speed Rail - Looking Beyond High Speed 2
Chaired by Sue Kershaw, UK Head of Infrastructure Programme and Project Management, KPMG
Simon Kirby, Chief Executive, High Speed Two Ltd
Henrik Anderberg, HS2 Director and Acting Managing Director, Alstom UK&I
Jim Steer, Director, Greengauge21
Kirby: HS2 can transform the industry
In the second session, Looking Beyond HS2, High Speed 2 chief executive Simon Kirby said that he believed HS2 would begin a transformation of the country's transport infrastructure. But how it was built was as important as what was built. "Our ambition is to leave a legacy which makes the country proud of rail."
He added: "We have the opportunity to make something to transform the customer experience, and creating economic growth across the country." He predicted that, when HS2 was in operation, companies would want to site their international HQs in cities other than London.
The project would also bring great change to the industry. HS2 would create 25,000 jobs. The High Speed Rail college was being established, which will provide 2,000 apprenticeships. HS2 would also bring huge technological change to the UK rail network, which would require different skills and different people. "It's a massive opportunity to bring new people into the industry. High speed rail is far more software and technology-based than the current network. It's an opportunity to increase diversity in our workforce and get the best people we possibly can into the sector."
With things like BIM, modular assembly and lean construction, "In building the railway, we will create an industry that's seen as global leaders in high speed rail."
Take 'three hours to Scotland' out of slow lane
Greengauge 21 director Jim Steer pointed out areas for attention looking beyond HS2 as the project currently existed. "Ministers' commitment in March to a journey time of three hours between London to Edinburgh and Glasgow was a tremendously important development," he said. The report produced by HS2 Ltd which set out options based on a combination of new and upgraded track, suggested there was a business case. But the timescale ministers had set to develop the proposal in more detail was too long. "It needs to be taken out of the slow lane," Mr Steer. The extension to Crewe had been brought forward with a target to open it by 2027. "There should be an ambition to achieve three hours to Scotland by 2027," he said.
The National Infrastructure Commission had pointed out the importance of connecting to HS2 in creating higher speed rail services for the North. "If that happens there will have to be a change to the presumption of services on HS2." He said. There would be a wider range of destinations. He pointed out that on HS1, domestic commuter services account for half the passengers carried. "These things will be used n different ways from how it was originally envisaged," he said.
However, dropping the connection between High Speed 2 and High Speed 1, the connection to Heathrow and the connection to the existing network in Birmingham "doesn't make a lot of sense," he said.
He questioned whether it would b3e necessary to go ahead with motorway improvements as well. "Building a faster, high capacity transport network via high speed rail has very much greater potential that a motorway upgrade. We have to face up to that."
Technology challenges 'yet to be solved'
Alstom UK and Ireland HS2 director Henrik Anderberg considered the technological developments that HS2 would benefit from. He pointed out the importance of signalling systems for capacity. "ERTMS level 2 has been in operation for 10 years and is now very mature," he said. "We need as an industry to develop even better signalling systems to be able to have even greater capacity." HS2 was seeking to operate 18 trains per hour from London at peak times from 2033.
Digital systems could be used in maintenance, as in Alstom's Manchester depot, where Pendolino trains are monitored automatically by scanners. The train is driven through the scanner in 90 seconds, allowing faults in items such as pantographs or brake pads to be detected automatically.
HS2 had been talking to Alstom in a "request for information" or market-sounding period for over a year. Mr Anderberg said that HS2's decision of develop the project for a design speed of 360km/h, compared with a maximum of 320km/h in France and 300km/h in Germany and Italy, had set stiff technology challenges that had yet to be solved.
These included limiting noise, to minimise the number of households affected; automatic train operation; and the design of the catenary system. "But we have enjoyed the dialogue because we need to push ourselves to the limit. It's good for us as manufacturers," he said.
Session 3: Network Rail Infrastructure - The Case for Investment
Chaired by Richard Threlfall, Partner & UK Head of Infrastructure, Building and Construction, KPMG LLP
Sir Peter Hendy CBE, Chair, Network Rail
Nicola Shaw, Chief Executive, HS1
Paul Plummer, Chief Executive, Rail Delivery Group and ATOC
Philip Hoare, Group Managing Director, Transportation, UK & Europe, Atkins
Alistair McPhee, VP, Ground Transportation Systems, Thales
'Government needs a long-term vision for rail'
The session on rail was structured around the recommendations and key themes of Nicola Shaw's report, The Future Shape and Financing of Network Rail, published in March. These included devolution of responsibility to Network Rail's regional "routes"; the role of the Government' planning for the railway; funding; and skills.
Ms Shaw said her target had been "to get to something implementable. The key thing now is how to take this forward."
Devolving responsibility to the routes is designed to engender a greater focus on Network Rail's customers, the train operators. Thales vice-president for ground transportation systems Alistair McPhee said he favoured devolution and hoped it would forge stronger relationships with suppliers: "I think it will drive efficiency and performance." He also hoped the new regime would foster collaboration. "I think collaboration is fundamental to success. Too often it isn't there. I hope we will see stung collaboration between routes and the supply chain, with long-term relationships."
Network Rail chair Sir Peter Hendy said: "The substitution of a real customer for an array of regulatory targets for running a big organisation will be a great improvement."
On the role of the government, Ms Shaw said the UK government had got very involved in rail in the last 10-15 years, but on a very day to day basis. Interventions were so frequent that she questioned how Network Rail knew what it was trying to do. A longer-term vision was needed, she said. She added that she would have liked to be able to separate the Government's multiple roles, as owner, customer, and regulator, more.
Sir Peter Hendy added: "This government is heavily committed to infrastructure spending in a way no government has since nationalisation. The industry is too hung up on five-year funding periods – we're talking about a level of investment that can't be delivered in five years, so it's necessary to have a longer term plan of what's coming next. The railway, not just Network Rail, should have a vision for which of these projects should be started now."
Paul Plummer, chief executive of the Rail Delivery Group said: "Absolutely you need a vision from the Government but I believe that has to be informed by the industry. We can help facilitate that conversation."
Peter Hendy said that in originating projects, "It seems to us the DfT has to be in pole position but there must be involvement of the train operators and Network Rail." The tripartite mechanism used for Crossrail was "a reasonable model", he said. "you need clarity from the start about what you're trying to achieve, how much the project should cost and who should be involved in its delivery. That tripartite mechanism will be very durable for the delivery of railway projects of any size."
On skills he said: "I completely agree [with the Shaw report] that the management capacity of the entire industry needs to be improved measurably. If you're going to devolve Network Rail you need competent all-round managers at the local level who understand how the railway works and can get on with suppliers and customers. This is a more pressing problem because the industry is growing. For the industry to want to do anything but embrace both gender diversity and ethnic diversity can't be right."
The record of Crossrail, TfL, Network Rail and a number of train operators and suppliers had shown that better training of apprentices and graduates was the way forward, but this needed more direction and to be done on a bigger scale.
He said there were areas that were "astonishingly vibrant". He praised the Young Rail Professionals organisation, which had gained 3,800 members by organising itself. The diversity of its membership was "fantastically encouraging. We've got to get the whole railway industry to embrace that as the future."
Session 4: Crossrail 2 - London's Next Big Infrastructure Development
Chaired by Ed Thomas, Partner, KPMG
Michèle Dix CBE, Managing Director - Crossrail 2, Transport for London
Baroness Jo Valentine, Chief Executive, London First
Terry Morgan, Chairman, Crossrail
200,000 new homes, 200,000 new jobs
Michèle Dix, TfL managing director for Crossrail 2, said that Crossrail 2 was needed because London's population was growing and creating new transport challenges.
She added these pressures also impacted on the transport network around the city.
Population growth would fuel demand for housing and land for 500,000 additional homes would have to be identified to meet that demand, Ms Dix said.
She underlined the importance of improving existing transport assets, including the Tube and cycling infrastructure, but said "new links are also needed."
Only integrated plans which look at transport and land use planning as one could unlock growth, she said, pointing to new developments at Vauxhall Nine Elms and Barking Riverside.
Crossrail 2 was "an immediate priority"; she hailed it as a "truly transformational scheme". It would have 70km of tunnel, connecting the national rail networks in Hertfordshire and Surrey, and could potentially be operational by around 2030.
The project would improve capacity and accessibility across the whole South East region, Ms Dix said: "It will have an impact from the Solent to the Wash," she said. It would open up areas to build housing, making it viable to build on site not currently connected to jobs.
Within the London Plan, Crossrail 2 could unlock 80,000 new homes, but with a Crossrail 2-led growth strategy this could rise to 200,000. It would also support up to 200,000 new jobs as well as 60,000 jobs in construction and the supply chain.
The NIC said the case for the project was "well-founded" but had called for it to be made more affordable, and linked to a strategy to deliver housing growth. A funding plan should ensure London paid for over half the cost of the project and open to private sector investment in stations and surrounding areas should be maximised.
The NIC has recommended that a bid for a Hybrid Bill for Crossrail 2 could be submitted in August 2019, Ms Dix said.
A succession of green lights are still needed
London First Chief Executive Baroness Jo Valentine set out the business perspective for Crossrail 2. She said the 17-year timeline for building Crossrail demonstrated the scale of challenges , Baroness Valentine cautioned against being overly optimistic in believing that Crossrail 2 had been given a final go-ahead by Chancellor George Osborne in the last Budget. It had been given a green light to proceed but needed "a succession of green lights".
The project was "less sexy" than its predecessor, but still enjoyed support from the business community, she told the Summit.
Baroness Valentine said Crossrail 2 was essential to preserve London's status as a world city. It was founded on good economic theory and would benefit from the series of successful recent projects such as HS1, King's Cross, the Olympics and Crossrail 1.
She offered some thoughts on funding from the business community, on the grounds that it could be considered "an easy touch" for some of the money required. Finding the sums involved would not be easy, she cautioned, but believed a way would be found.
She believed continuing the supplementary business rate beyond Crossrail would be something the business community would support – though not a "supplementary supplementary business rate".
Residents and passengers would benefit and should also make a contribution. A way of capturing the increase in land values generated by the project should be found, she said, but added: "Policymakers need to create the value before they capture it", Baroness Valentine said.
She concluded by calling on the next Mayor of London to make securing Crossrail 2 the top priority for their four year term.
Lessons from Crossrail
Crossrail chairman Terry Morgan said Crossrail would be delivered on time and within its funding envelope.
He added that the project was 75% done and all the core tunnelling was complete. He added that Crossrail was on course to open at the end of 2018 and that the project had been built with 30 to 40% spare capacity to anticipate future demand. The project would be bigger than anything seen in London before in scale, he said.
Mr Morgan set out some of the lessons from Crossrail, including governance, working with the sponsors to achieve autonomy and engaging with community stakeholders. He emphasised that the project had not been drawn into a trap of opting for the lowest bid.
There had been some ideas for innovation that Crossrail had been unable to put into place, Mr Morgan said.
He urged Crossrail 2 to carefully consider the optimum point at which compulsory purchases could be handed over to developers, in order to secure the best value.
Crossrail had had a skills strategy built into its contracts. 12,000 had enrolled at the Tunnelling and Underground Construction Academy. It had improved diversity, with 27% of last year's apprentice uptake being women.
Mr Morgan emphasised the importance of maintaining good engagement and relationship with community stakeholders. He pointed to the launch of Crossrail's Learning Legacy initiative last month as part of the project's commitment to guaranteeing continuing benefits from it.
Robert Goodwill MP, Minister of State, Department for Transport
Infrastructure to rebalance the economy
The government and the chancellor believes in the power of infrastructure investment to create jobs and prosperity. This was one of the underlying principles of the Government's infrastructure strategy, said transport minister Robert Goodwill.
"We will use infrastructure to rebalance the economy," he continued. For example, as well as devolving power, £13bn was being spent on transport in the north of England's road and rail networks. "We want the north to catch up," he said. "The biggest difference we can make is through investing in infrastructure."
But he cautioned that it was necessary to prepare properly for significant infrastructure projects. The Government's approach was threefold: first, to get political support; second, to identify funding; and third, to work with business. This was the approach used successfully on HS2. "It has taken six years but we are on track to start construction next year," he said.
"There will be no stop-start decisions from this government," he added.
In addition, the National Infrastructure Commission "will take the politics out of decision-making" he said. Following the NIC's first reports, the government had given the green light to HS3 and provided £80m towards the development of Crossrail 2.
On ports and airports, which fell within his ministerial portfolio, he commended the private sector's investment of hundreds of millions of pounds in recent years in ports such as Felixstowe, London Gateway and Liverpool, allowing them to take the largest container ships and cruise liners. For its part the Government was upgrading surface links to ports, including those at Immingham, and to the A19 in the North East, which will improve access to the Port of Tyne. On airports, Mr Goodwill said "Many in the sector were disappointed when we delayed the decision on runway capacity in the South East. The decision was delayed to make sure we were fully prepared. We are using this time to do more work on environmental impact and develop the best possible package to mitigate the effect of expansion on local communities."
He said the final decision would be one of the three shortlisted options and "it will be built by 2030".
Session 1: Highways - A Long Term Strategy
Chaired by Michele Connolly, Partner, KPMG, LLP
Jim O'Sullivan, Chief Executive, Highways England
Steve Gooding, Director, RAC Foundation
Prof. Stephen Glaister, Chair, ORR
Anthony Smith, Chief Executive, Transport Focus
New regime brings more stability
Highways England has just celebrated its first anniversary. Chief executive Jim O'Sullivan said that after nine months with the company "I've found it very much fit for purpose." Its focus was on safety, of users and people working on the roads, customer service, and carrying out the Roads Investment Strategy.
The move from an annual programme to a five-year strategy had brought more stability, and an ability to engage with suppliers, he said. So far it was on track, with 88 more schemes due to start by 2020.
So far, it had kept 98% of the network available to traffic and cleared 86% of incidents within an hour. 70% of overhead signs are capable of showing the journey time to the next junction. The organisation was working towards limiting the length of motorway roadworks – a 23-mile smart motorway project on the M1 from junctions 23-27 in 2013-14 was designed to minimise cost but had not been popular. A limit of 15 miles was being discussed.
Next priorities were east-west connections, including consideration of a trans-Pennine tunnel, and improvements to the A66, A69 and M60, but also in East Anglia and at Immingham; accelerating the upgrade of the M62 and other critical road projects in the North; and preparing the infrastructure for vehicles of the future, through the M20 connected highway project and trials of autonomous vehicles.
Where will the money for the investment come from?
The new system for highways, with the creation of Highways England and the introduction of a five-year Road Investment Strategy, was "a great improvement," said Office of Rail and Road chair Prof Stephen Glaister. He noted, however, that the rail network was being more aggressively managed by the Government while the road network was moving in the opposite direction.
He warned that both road and rail would have to cope with devolution to the regions of control of two large strategic networks. He added that Network Rail's investment plans, plus High Speed 2 and Transport for the North's ambitions for infrastructure improvements amounted to "a very expensive shopping list". £270bn of infrastructure investment was planned by 2020, including £15bn on strategic roads and £61bn on rail. "These are enormous sums in comparison to the cuts the Government is having to make elsewhere," he said. Conversely they were less than 3% of GDP, so should be affordable.
But, he continued, in other industries there was "a well-developed mechanism by which the regulator allows charges to be passed to end users. That's missing in road and rail." For the devolved authorities, "there won't be anywhere near enough money available through the local tax system under the current regime," he said, "unless there was there is major reform of local government finance and aggressive taxation.
Without that income stream it would be impossible to lever in private capital, he added.
Long-term planning, looking at road and rail together, also need to be improved to decide what users want, who is going to pay and how do we make choices, he argued.
What should the role of Highways England, Network Rail, the Government, local government and the ORR be in this process, he asked. "ORR is an enabler," he said. "I believe ORR should stand as an independent body to facilitate stability, a view about value for money and efficiency, and protection for users and investors. Without an independent ORR, none of this investment can be achieved through private capital."
The user perspective
The role of Transport Focus is to help Highways England, the ORR, , the Government and others focus on users, said the organisation's chief executive Anthony Smith.
A year ago it had taken on the role of representing users of motorways and A-roads and had begun research into what their priorities were.
Top priority for improvement among car and van drivers was the quality of the road surfaces, he said. For HGV drivers there was more emphasis on better management of unplanned delays and better journey predictability. Freight users could cope with road works provided they know where they are and how much they are likely to be delayed, he said. If a journey was expected to take about an hour and it did take about that time, road users were broadly happy.
The organisation is also working on a new road user satisfaction survey. A panel of road users will be assembled, who will record their responses as soon as possible after a journey. This will undergo a trial next year and will be put into action the year afterward, he hoped.
Other research is being conducted into users' experiences of roadside facilities, experiences during delays and disruption, Highways England's' provision of information about unplanned disruption, and HGV drivers' experiences of Operation Stack (when channel ports are disrupted).
Don't forget local roads
RAC Foundation director Steve Gooding also stressed the importance of seamless and predictable journeys, and said this meant paying attention to local as well as strategic roads. "If we are going to have a good road network we need to care about the whole network," he said. "Let's not forget the roads most of us use most of the time." To get a seamless traffic flow, Highways England and local authorities needed to work together effectively.
On predictability of journey times, he said that traffic flows are now such that it's possible to collect sufficient data to be able to achieve that predictability.
In the context of a long-term strategy he also stressed the question of how to pay for improvements. "The question of paying for how we use the roads does need to be thought through," he said. "Revenue for fuel duty will run out in 20 years – the sooner we think about it the better."
Session 2: Ports - UK's Link to the Global Economy
Chaired by Theresa Crossley, Executive Director, UK Major Ports Group
James Cooper, Chief Executive Officer, Associated British Ports
Philip Wareham, Legal Director, Hill Dickinson LLP
Ian Woodman, Director, Maritime, Department for Transport
They are the hubs securing Britain's place in global commerce, the successors to our tradition as a great maritime nation and potentially the way out of the country's trade deficit. The ports industry still matters a great deal to the UK economy, Associated British Ports chief executive James Cooper reminded the audience. Over 120 commercial ports moved 500m tonnes of cargo each year and handled 95% of the nation's trade in goods, he explained.
He stressed, however, that the level of trade had remained low since the economic crisis in 2008.
That did not mean there were not new investment opportunities for ports and new potential uses for them to explore, he added. Mr Cooper's chief message was that investment was vital to allow ports to adapt to changing markets and technologies, but this could only be secured through policy stability at both a UK and an EU level.
He believed the ports had an important role to play in regeneration, rebalancing the economy and reindustrialisation. There was 900ha of strategic development land available at UK ports. "We are looking to attract manufacturing industry", he said. "It's ideal for the long-term health of the economy." The Government had a potential role to help in this process.
Hill Dickson legal director Philip Wareham sought to unravel the arcane mysteries of European Union ports regulation. He outlined the impact of the new Concessions Directive, passed in 2014, filling a gap where no procurement legislation had existed before at an EU wide level.
While it was intended to be light touch, he noted, the mandatory notice period and risks of legal challenges or disruption from mistakes were of some concern to the ports industry.
State aid was another key concern from a European perspective, with the European Commission in policing it. While the private sector dominated the ports sector, member states were not above promoting national champions, such as Hamburg, Mr Wareham explained.
Lastly, Mr Wareham discussed how the Port Services Regulation would allow deals to open up markets in port services from other member states and make the accounting arrangements more transparent. ABP's Cooper believed, however, that it "could stifle investor confidence if not carefully handled".
Those seeking reassurance of the Government's understanding of ports' importance had to look no further than DfT's maritime director Ian Woodman, who declared they were "fundamental to the economic prosperity of the nation".
The National Policy Statement for Ports had covered all bases needed to create the right legal and regulatory for the sector to thrive, but it could not stand still, he told the audience.
Mr Woodman was especially proud of the success of UK ports coming without any state aid or form of major subsidy from the Government. He affirmed that DfT was aware of the challenges with regard to the changing energy market and the decline of coal imports, customer requirements and transport links.
That last area would see investment in links to ports carefully considered as part of road and rail investment plans, he said.
Overall, he said the industry should be proud that "we have enough port capacity in the right places and with the right pricing strategy to satisfy customers."
Making Transport Projects Happen: The Law and How To Love It
Angus Walker, Board Chair, National Infrastructure Planning Association (NIPA)
"I'm going to be a bit more multi-modal", Angus Walker of Bircham Dyson Bell announced to the UK Transport Infrastructure Summit - a man with 15 years' experience of the legal complexities around major infrastructure projects.
Delving into the challenges, Mr Walker explained there are two legal components necessary for a successful project, specifically the powers to acquire the necessary land and obtaining the planning permission.
His experience with the Crossrail project allowed him to state the importance of clearly demonstrating the benefits of a project and being able to adapt the project benefits in the face of opposition. HS2 had done this, shifting the emphasis of its case from speed to connectivity.
Ministers liked to see buzzwords like "growth", "productivity" and "security" in pitches, Mr Walker added. He also emphasised the importance of a suitable promoter for a project, such as Highways England and Network Rail in the case of roads and railways respectively. Occasionally private companies promoted schemes, as had been the case with Chiltern Railways with the project to extend the Chiltern line to Oxford.
The private companies who owned ports and airports were usually the parties responsible for promoting and funding new ports capacity or runways, Mr Walker said, touching on one of the key questions around the role of the state in funding surrounding infrastructure.
He indicated what he saw as a gap in policy, in the lack of a single planning statement for transport from the Government, something that existed for energy projects, and could break down silo working by different sectors. What policy statements were in place for roads and ports did not contain the strong support for new developments that was seen for energy projects. Instead, ministers appeared keener on repairs to the existing network.
The new National Infrastructure Commission would take a longer term perspective of issues, including transport decision like HS3 and Crossrail 2, he added, but the decision over whether to endorse its recommendations remained with ministers.
Acquisition of land for projects could be done through Hybrid Bills, as had been the case with Crossrail and would the case for High Speed 2. Development Consent Orders could be used by projects above a certain size. Smaller projects would use the normal planning permission route.
Both Hybrid Bills and Development Consent Orders enjoyed a high degree of success.
Both offered a clear timeline to the award of planning permission. He emphasised that promoters were granted more complete control with Hybrid Bills, because they produced the first draft themselves.
Session 3: Airports - Next Steps for Airport Capacity
Chaired by James Stamp, UK Head of Transport, Global Head of Aviation, KPMG
Darren Caplan, Chief Executive, Airport Operators Association
Charles Kirwan-Taylor, Corporate Affairs and Sustainability Director, Gatwick Airport
Louise Ellman MP, Chair, House of Commons Transport Committee
Why are we waiting? That was the question that metaphorically circled the airports session at the close of the two day UK Transport Infrastructure Summit. The Government's delay a decision on a new runway in the South East dominated the discussion.
However, if anyone thought the aviation sector was resting in its laurels waiting for the Government's verdict had they only had listen to Darren Caplan to know that they were wrong. The Airport Operators Association chief executive presented a positive message, underlining the shifts in the policy landscape since 2012, when Transport Secretary Patrick McLoughlin and aviation minister Robert Goodwill took up their roles.
The Conservatives had travelled a long way from their opposition to a third runway in 2010 to the statement in December 2015 accepting the need for a new runway in South East, Mr Caplan said.
However, he called for ministers to take further steps to reduce the burden of Air Passenger Duty on the sector and to update the Aviation Policy Framework to include measures to improve surface access to airports.
"If we did get more support from the DfT... we could deliver more as a sector", Mr Caplan said.
Charles Kirwan-Taylor, Gatwick Airport corporate affairs and sustainability director, outlined how the rates of passenger growth seen at the other contender for a new runway had far outstripped the estimates the Airports Commission had relied upon. The addition of 20 new long-haul routes and improvements to surface access demonstrated that Gatwick had the greater potential if given the go ahead to expand.
Mr Kirwan-Taylor sought to use two prevalent trends in the global aviation market to bolster his airport's case. Sir Howard Davies' Airports Commission had been wrong to discount both the potential of Middle Eastern hubs to disrupt the European market and the argument that newer more fuel-efficient aircraft would drive growth in longer-haul routes.
Overall, Gatwick could deliver the economic benefits at a fraction of the environmental costs of an enlarged Heathrow, he argued.
Labour MP Louise Ellman, Chair of the Commons Transport Select Committee, was left to represent the political classes in the debate. Her thinning patience with the hesitation of Government ministers was evident as she recounted the well-reported evidence of the Transport Secretary to her committee, in which he stated he "hoped" a decision could be reached by the summer. In practice, Ms Ellman said, the best thing to speed the process up was for businesses to make their desire for expansion loud and clear.
No one present was prepared to discuss a "Plan B" in the event that the decision expansion was kicked further down the road. Mr Kirwan-Taylor underlined how people were mystified by the continual delay.
"We are not yet at the moment of absolute crisis – but June this year represented "the last point you can make a decision and still get a runway built by 2025," Mr Kirwan-Taylor said.