GREATER MANCHESTER INTEGRATED TRANSPORT AUTHORITY REPORT FOR RESOLUTION

COMMITTEE: Authority DATE:

23rd July 2010

SUBJECT:

Greater Manchester Transport Fund – Metrolink Phase 3B Delivery Programme and Financial Strategy Update

REPORT OF: The Clerk to GMITA, the Chief Executive of GMPTE, the ITA Treasurer and the Finance and Corporate Services Director, GMPTE

PURPOSE OF REPORT This report presents an update on the development of the Greater Manchester Transport Fund (‘GMTF’) Metrolink Phase 3B extensions to Manchester Airport and Oldham and Rochdale town centres, and an overview of the delivery programme and the associated financial strategy. RECOMMENDATIONS The Authority is requested to: (i)

note the content of the report, and the progress made to date on developing the Metrolink extensions to Manchester Airport and Oldham and Rochdale town centres;

(ii)

approve the entering into of the contractual agreements for these schemes, within approved budgets, which are expected to be concluded by the end of July 2010, as set out in section 3 of this report. A similar report will be presented for approval to AGMA Executive Board at its meeting on 30th July;

(iii)

note the overarching financial strategy for the GMTF as previously reported to the GMITA in July 2009, December 2009 and July 2010;

(iv)

approve the prudential borrowings required for the schemes as set out in section 4;

(v)

approve the delivery strategy as set out in section 2 and in the Appendix to this report;

(vi)

delegate authority to the Chair and Vice Chair of the Authority and the Leader of the Opposition, in consultation with Manchester City

1

Council, to determine whether either 15 or 14 stops should be included on the Airport line and to determine the identity of the stops not to be included; (vii) approve the principles included in the Heads of Terms agreed with the Manchester Airports Group (‘MAG’) and the entering into of the Funding Agreement with MAG; and (viii) approve the entering into of the Funding Agreements with Oldham MBC and Rochdale MBC.

BACKGROUND DOCUMENTS Metrolink Greater Manchester Transport Fund Update (Capital Projects Committee – 2nd July 2010) Treasury Management Strategy Statement and Borrowing Limits for 2010-11 and Prudential and Treasury Indicators 2010-11 to 2012-13 (Authority – 23rd April 2010) Metrolink Oldham and Rochdale Town Centre Extensions (Emergency Committee Meeting – 21st May 2010) Metrolink Airport Line Extension (Capital Projects Committee – 5th March 2010) Greater Manchester Transport Fund – Accelerated Package Delivery Programme and Financial Strategy Update (Authority – 18th December 2009) Greater Manchester Transport Fund – Delivery Programme Update (Policy and Resources Committee - 20th November 2009) Greater Manchester Transport Fund - Accelerated Package Update (Capital Projects Committee – 18th September 2009) Greater Manchester Transport Fund – Proposed Delivery Strategy & Financial Arrangements – (Policy and Resources Committee – 24th July 2009)

CONTACT OFFICERS Howard Bernstein David Leather Richard Paver Steve Warrener

0161 234 3006 0161 244 1020 0161 234 3564 0161 244 1025

[email protected] [email protected] [email protected] [email protected]

2

1.

INTRODUCTION

1.1.

On 24th July 2009, the GMITA Policy & Resources Committee approved the investment package making up the Greater Manchester Transport Fund (‘GMTF’) and agreed that GMPTE should proceed with the schemes in the Accelerated Package, subject to further approvals being obtained prior to contract award. The Committee also agreed at this meeting that GMITA could borrow up to £38 million for the development of public transport projects in 2009/10 and that interest costs of circa £0.2 million in the year would be met from the ITA financing budget for 2009/10.

1.2.

On 31st July 2009, the AGMA Executive considered a further report which presented an outline delivery strategy and proposed financial arrangements in support of the Major Transport Scheme Prioritisation and Funding Strategy, and agreed, inter alia, that:  the total investment package would be £1,512 million, funded from

£448 million of Regional Funding Allocation; £165 million grant from the Department for Transport in relation to the SEMMMS road scheme; a £147 million ‘top slice’ from the Greater Manchester Integrated Transport Block LTP funding over a period of 9 years from 2010/11; up to £775 million from a combination of borrowings, to be undertaken by GMITA, and partly from local/third party contributions;  GMITA would repay the borrowings in full by 2045, in part through

the application of Metrolink net revenues (being Metrolink revenues, net of operating, maintenance and other related costs) attributable to the Metrolink extensions funded through the Transport Fund; in part by the application of the annual ring-fenced levy contributions referred to in the report (which will be raised by GMITA under its levying powers in addition to the amounts which the GMITA requires to levy to fund its other expenditure) and in part from local revenue contributions;  the relevant delivery bodies/scheme sponsors would proceed with

the development and implementation of their projects subject to the normal approval procedures, provided that, in relation to any project, they did not incur or commit expenditure in excess of the funding available for that project shown in Figure 1 of that report. The approval procedures would include updated assessments of scheme revenues to the extent that they are being used to repay prudential borrowings;  GMITA to borrow up to £38 million for the development of public

transport projects in 2009/10 and would incur interest costs of circa £0.2 million which can be met from the existing ITA financing budget for 2009/10; 1.3.

An update on progress was provided to the GMITA Policy and Resources Committee at its meeting on 20th November 2009 and proposals for borrowings for the development of schemes in the GMTF

3

in 2010/11 were noted, to be agreed at the subsequent Authority meeting. 1.4.

At the meeting on 18th December 2009, the Authority agreed that GMITA could borrow an additional £140 million in 2010/11 and incur interest costs of circa £4.9 million in 2010/11 in respect of existing and additional borrowings for the development and delivery of public transport projects within the GMTF. These borrowings included for the forecast 2010/11 expenditure in relation to the works on the Metrolink extensions to Ashton, East Didsbury, Manchester Airport and Oldham and Rochdale Town Centres; and the works required to progress the other schemes within the Transport Fund that are funded in part from borrowings.

1.5.

In order to deliver value for money and affordability for the Metrolink schemes, further price testing has been undertaken with the Metrolink contractor, and a package of approved advance works has been progressed on each of the schemes.

1.6.

On 2nd July 2010, the GMITA Capital Projects Committee received a paper outlining progress on the Metrolink Airport and Oldham and Rochdale town centre extensions.

1.7.

This report presents an update on the development of the Metrolink extensions for Manchester Airport, Oldham town centre and Rochdale town centre and seeks approval to enter into the contractual agreements for these schemes, which are expected to be concluded, within approved budgets, by the end of July 2010.

1.8.

A similar report will be presented for approval to the AGMA Executive Board at its meeting on 30th July.

2.

DELIVERY STRATEGY

2.1.

This report describes the delivery strategy for the Metrolink Phase 3B extensions to Manchester Airport to Oldham and Rochdale town centres. The current proposed opening dates for the schemes are as follows:  Oldham town centre extension

Spring 2014

 Rochdale town centre extension

Spring 2014

 Airport Line extension

Mid 2016

2.2.

The Metrolink Second City Crossing is also anticipated to open in Mid 2016.

2.3.

In order to ensure value for money and affordability within confirmed budgets for the Airport Line, Oldham town centre and Rochdale town centre extensions, a detailed price testing exercise has been undertaken with the existing Phase 3A Contractors.

2.4.

The OJEU notices for the Phase 3A Design, Construct and Maintain (‘DCM’) and Tram Operating System (‘TOS’) contracts made provision

4

for the contracts to be extended to include repeat works for Phase 3B. The DCM contract for Phase 3A also includes a pricing mechanism to govern the pricing of the 3B works. 2.5.

Under these provisions, a £26 million package of budgeted advanced works was approved by the ITA Capital Projects Committee on 5th March 2010 to progress the development and design, and to inform the procurement process for the Airport line; and a further £7.80 million package of similar budgeted advanced works was approved to progress the Oldham and Rochdale town centre extensions by the ITA Emergency Committee on 21st May 2010. Airport Line Extension

2.6.

The strategic objective of the Metrolink Airport Line extension is to provide a light rail public transport link between the Regional Centre; the major and growing employment centre around Manchester Airport; and residential areas of South Manchester including Wythenshawe, which are currently difficult to reach by public transport due to the physical barriers of the Mersey Valley and the M56 and M60 motorways. The route opens up a new transport corridor into the city from the areas south of the River Mersey.

2.7.

As well as connecting to the Regional Centre and Manchester Airport, the scheme will provide a high quality public transport link from local residential areas to a wide range of facilities including: a major regional hospital centre at Wythenshawe, local health facilities, high schools, university leisure and residential facilities, and district town centres, including Wythenshawe, where a transport interchange is also being developed.

2.8.

The scheme comprises 9 miles (14.5 km) of new double track Metrolink line. The extension will be fully compatible with the existing Metrolink network, and will be capable of use by all Metrolink Light Rail Vehicles (‘LRVs’). All stops will provide ticket vending machines, passenger information displays, public address equipment, CCTV coverage and passenger emergency call facilities. Stops and LRVs will be fully accessible in accordance with the Department for Transport’s (‘DfT’s’) Inclusive Mobility guidance. The track type will be a mixture of paved, twin block and ballast along the route.

2.9.

Twelve additional trams will be procured for the Airport line, which will enable a minimum of five trams per hour at each tram stop, i.e. one tram every twelve minutes, running in each direction between 06.00 and 00.30 Monday to Saturday. The financial and operational viability of increasing the service patterns, and the number of trams, will be reviewed in light of future passenger demand, value for money and the future availability of funding.

2.10. It has also been agreed with Manchester Airport that a limited service of between two and five trams per hour will operate in the period from 03.00 to 06.00 on a daily basis. The principles of the Heads of Terms agreed with Manchester Airports Group are set out in section 4 below.

5

2.11. The Airport extension commences at the terminus of the Metrolink Phase 3A branch to Chorlton, and diverges onto new track to the Airport. Approximately 1.6 miles (2 km) of the alignment runs on-street (on secondary roads), with the remainder being either on roadside verges or totally segregated as in the Mersey Valley and alongside the M60. The route includes major crossings of the river Mersey, the Stockport to Altrincham Railway line, and the M60 and the M56 motorways. The alignment then runs adjacent to Network Rail track to terminate at Manchester Airport’s Ground Transport Interchange. 2.12. As described in the report to the July 2010 ITA Capital Projects Committee and the June 2010 AGMA Executive Board, there is an estimated cost of approximately £8 million relating to the interface between the SEMMMS road scheme and the Metrolink Airport line extension. Based on the current financial projections this can be accommodated within the existing funding envelope for the overall GM Transport Fund. 2.13. The route from Chorlton to Manchester Airport runs through Northern Moor, Baguley, and Wythenshawe, and will create:  public transport crossings of the river Mersey and the M60 & M56

motorways, which are major constraints to north / south movements in south Manchester;  a series of new public transport links within the area served that will

give significant time and distance savings over the present highwaybased journeys by car or bus; and  a major Park and Ride site of around 300 spaces adjacent to the

M60 at Sale Water Park to enable local users to drive to and access the Metrolink network. 2.14. The scheme will also link the following areas:  Manchester Airport – which is a major and growing employment

centre;  Wythenshawe – a major housing area with a wide range of types of

publicly and privately owned properties, and also a significant employment zone. In particular the line will provide better links between the town centre and residential areas of Wythenshawe;  Wythenshawe Hospital - a major hospital that provides medical

services, with some services provided on a regional basis;  Baguley – a residential, retail and industrial area;  Northern Moor – a residential area that has no existing direct

transport corridor to the regional centre; and  Chorlton - an important shopping, employment and residential area.

2.15. Manchester Airport is currently served by heavy rail services from Manchester Piccadilly station. The heavy rail link between Manchester and the Airport runs on a different alignment to the proposed scheme

6

and is served by through trains to destinations beyond Greater Manchester which run via central Manchester. 2.16. The Metrolink extension will meet demand for local journeys from points within Greater Manchester to and from the airport; including trips by airport employees, passengers and visitors to the airport. 2.17. It will also provide an attractive alternative to the car for relatively short journeys on links where it reduces the time and distance compared with the existing road network. In addition, the line will provide a fast public transport route to the centre of the Airport at the Ground Transport Interchange from areas, including Chorlton, that have no direct public transport links at the moment. 2.18. A new public transport link for employees on the Airport site will be particularly valuable as employee car parking is already heavily restricted and there is little scope for creating more spaces within the Airport complex. Increased security measures have also led to restricted access to the Airport for passengers arriving or departing by car and this is likely to continue into the future. 2.19. The Airport extension passes through the Wythenshawe regeneration area, and will serve a number of major employment centres. The new service is anticipated to help alleviate socio-economic deprivation in Wythenshawe by improving access for residents there to employment opportunities in the Airport and surrounding business parks, as well as improving access to retail, health, and education facilities in the Regional Centre. 2.20. In developing the scheme, a value engineering exercise has been carried out to ensure that the costs represent good value for money and can be met within available funding. This work has resulted in a recommendation to reduce the number of stops from 18 to 15 on the Airport extension. Further detail in this regard is included as an Appendix to this report. Oldham Town Centre Extension 2.21. The Oldham town centre extension provides light rail access to the commercial and educational areas of Oldham by means of a permanent route running through the town centre, replacing the temporary Phase 3A section which bypasses the town centre on the previous railway route. 2.22. The scheme is integral to the regeneration in Oldham and the successful implementation of the Town Centre Masterplan. The route also passes through some of the most deprived areas in the country around Oldham town centre. 2.23. The scheme comprises 1.5 miles (2.4 km) of new double track light rail alignment. The extension will be fully compatible with the existing Metrolink network, and will be capable of use by all Metrolink LRVs. All stops will provide ticket vending machines, passenger information displays, public address equipment, CCTV coverage and passenger

7

emergency call facility. Stops and LRVs will be fully accessible in accordance with DfT’s Inclusive Mobility guidance. 2.24. New Metrolink stops will be constructed at Westwood, King Street, Oldham Central and Oldham Mumps. 2.25. Ten trams per hour (one tram every six minutes) will run in each direction through Oldham town centre, on Monday to Saturday in the peak hours (07.00-19.00). Five trams per hour (one tram every 12 minutes) will run between 06.00 and 07.00 and between 19.00 and 00.30. The service will require one additional tram, which is included in the forecast scheme costs in section 4. 2.26. Embedded track slab will be used from King Street to Oldham Mumps. Other areas will have a twin block rail solution away from the highway crossing at Manchester Street roundabout. 2.27. An investment of £5 million is planned by Oldham MBC to enhance the highway and public realm infrastructure whilst the new tram line for Metrolink 3B is being constructed. The work will be undertaken by GMPTE and their contractor MPT. This is a strategic opportunity for these works to be undertaken at the same time, and by the same contractor as for the work on the Metrolink Oldham town centre extension. The costs of these works and the associated £5 million funding contribution from Oldham MBC are included within the financial summaries in section 4 of the report. 2.28. The £5 million will be used for:  surfacing and provision of additional routing to promote improved

traffic flows as well as enhanced surface finishes;  junction improvements and a new link access road between

Yorkshire Street and Oldham Way at the Mumps end of the town centre;  demolition and infilling of a subway at the Manchester Road

roundabout;  the provision of controlled facilities for road crossing at surface level,

aligned with the removal of the subway and the replacement of the existing traffic poles;  betterment of utilities to suit the new highway layout; and  the enhancement of the townscape facilities, which will include

public realm improvements and street bollards, benches, litter bins and trees.

furniture

such

as

2.29. The implementation of the Metrolink route through the town centre will enhance the town’s highway and pedestrian infrastructure along Union Street, in conjunction with improving access to the town centre via a new link road creating better connectivity within the town centre and offering a stronger investment environment.

8

2.30. The town centre will also gain better linkages to the Regional centre; Rochdale; the New East Manchester regeneration area; and destinations served by the rest of the Metrolink network. 2.31. The extension will address the existing accessibility issues from the Mumps and Westwood areas to the town centre; improve the links between the town centre and the communities of South Chadderton, Shaw, Hollinwood and Failsworth; and will provide an attractive public transport alternative for car users wishing to access services and jobs in Oldham town centre. 2.32. The alignment for the Oldham town centre extension interface at Werneth has been optimised, and the design will allow the construction to be incorporated into the Phase 3A delivery programme, reducing abortive costs. 2.33. It is proposed that a Metrolink stop is not built at Werneth and that the area be served by the Westwood stop on completion of the Phase 3B scheme. 2.34. As part of the value engineering review of the scheme, a revision to the alignment has been agreed. The removal of the tunnel between Manchester Street and the King Street stop, and the new proposed alignment across the roundabout will require planning consent from Oldham MBC and associated traffic measures. A TWA order will also be obtained prior to commencement of operations. 2.35. The other key interface between the Metrolink Phase 3A Oldham line and the Phase 3B Oldham town centre extension is at Oldham Mumps. The track and highway alignment has been developed to optimise the integrated solution at the Oldham Mumps roundabout. The works will require planning consent from Oldham MBC and associated traffic measures. A TWA order will be obtained, if required, prior to commencement of operations. In addition, the works will involve the demolition of the existing Oldham Mumps viaduct by Autumn 2010, to facilitate the diversion of the line via the town centre 2.36. A review of the proposed Metrolink Park and Ride facilities at Oldham has been undertaken with the aim of creating improved transport interchange facilities adjacent to the proposed Oldham Mumps tram stop. This review concluded that an integrated solution could be provided closer to the town centre amenities and existing bus facilities. The proposed solution provides a tram stop, a Park and Ride site and adjacent bus stops. This facility requires land to the west of Oldham Mumps roundabout, between Oldham Way and Yorkshire Street. 2.37. The Metrolink extensions are designed to achieve high levels of integration with existing public transport services. The scheme will improve integration with bus services at Oldham Mumps through the remodelling of the existing bus lay-bys; an improved waiting environment; and improved information provision. 2.38. Park and Ride facilities are to be provided at Hollinwood and Derker as part of the Phase 3A development. Both of these sites have further development potential and are included in the Park and Ride package 9

within the Transport Fund, which also includes additional Park and Ride facilities at Shaw and Oldham Mumps. The land required for the Park and Ride site at Oldham Mumps was acquired in March 2010, following ITA approval on 25th March 2010. 2.39. A review of the development and funding options for the Park and Ride package is currently being undertaken pending the conclusion of the Government’s spending review in the autumn. Rochdale Town Centre Extension 2.40. This scheme provides light rail access to the retail heart of Rochdale town centre by means of an on-street spur off the Phase 3a Metrolink route which runs along the previous railway route. 2.41. The scheme comprises 0.7 miles (1.1km) of new double track light rail alignment. The extension will be fully compatible with the existing Metrolink network, and will be capable of use by all Metrolink LRVs. All stops will provide ticket vending machines passenger information displays, public address equipment, CCTV coverage and passenger emergency call facility. Stops and LRVs will be fully accessible in accordance with DfT’s Inclusive Mobility guidance. The Rochdale line will be embedded track slab throughout the scheme, as it runs largely on-street. 2.42. The scheme includes the delivery of significant amounts of betterment to existing infrastructure, particularly in terms of highways, utilities and other related works, including street lighting. As a result it has been agreed with Rochdale MBC that they will contribute £2.5 million towards the overall cost of the Rochdale town centre extension scheme. 2.43. The Rochdale Phase 3A Metrolink service will be extended to Rochdale town centre, with five trams per hour (one every twelve minutes) running in each direction between Rochdale town centre and Manchester during the hours of 06.00 and 00.30 Monday to Saturday. The operation of the service will require one additional tram, which is included in the forecast scheme costs in section 4. 2.44. The route will serve a number of town centre amenities, including a Primary Care Health Centre on Maclure Road, the Central Retail Park and the town centre retail and leisure facilities. In addition, bus interchange facilities will be provided with the main bus station in the town centre. Stops are located at Drake Street for the local residential/shopping facilities, and in Rochdale town centre for the town centre amenities. Bus/train interchange will be provided at the Rochdale Railway Station stop and bus interchange at the town centre stop. 2.45. The Rochdale town centre extension will improve the connectivity of the Rochdale area to areas of employment served by the Metrolink line including the Regional Centre, Oldham and New East Manchester. 2.46. The town centre extension will provide much improved transport links to parts of Rochdale that are among the most deprived areas in the

10

country: 71% of the population within Rochdale are in wards that rank as the 10% most deprived wards in England and Wales. 2.47. Rochdale is served by a good network of local bus services to the town centre where the Metrolink town centre extension terminates, which will enable these existing services to act as feeders to Metrolink. Metrolink will also provide a feeder to the rail station for people travelling on by rail and vice versa. 2.48. The Rochdale town centre extension will address the current accessibility issues between the rail station and the town centre, and will provide an attractive public transport alternative for car users wishing to access services and jobs in Rochdale town centre. It will also provide the additional public transport capacity and penetration required to alleviate congestion on approaches to the town centre. 2.49. Funding for an additional stop to serve Kingsway Business Park on the Rochdale line is being progressed with the NWDA by Kingsway Developments, Rochdale MBC, Rochdale Development Agency and GMPTE. An option price for a stop to serve Kingsway Business Park was included within the contractual arrangements for Metrolink Phase 3A. Second City Crossing 2.50. To ensure a resilient network is maintained and the operational flexibility to fully support the extensions is achieved, a Second City Crossing is needed for delivery by 2016. 2.51. The proposed Second City Crossing route starts at Manchester Central Convention Complex (previously G-Mex). The route then runs along Mount Street, past the Midland Hotel, the Central Public Library and Town Hall extension. It then continues around Albert Square. From Albert Square trams will run along Cross Street and Corporation Street providing improved access to leisure and retail facilities such as Manchester Arndale Centre, the Triangle, Cathedral Walk, Printworks and the Manchester Medieval Quarter. The route re-joins the existing Metrolink line just outside Victoria Station. 2.52. Design is continuing on the stop locations and GMPTE will continue to work closely with Manchester City Council and other stakeholders to ensure that the design of the two stops aligns with the local environment and integrates into existing and proposed development plans for Manchester city centre, including consideration of how servicing and access requirements for adjacent premises can be met in the development of the tram stops. 2.53. Visual images of the proposed tram stop options are currently being produced for use in the public consultation, which will commence in September 2010.

11

3.

PROCUREMENT STRATEGY

3.1.

The procurement of Metrolink Phase 3A included the following principal contract packages:  Infrastructure Design, Construct and Maintain (‘DCM’);  Tram Operating System (‘TOS’);  Light Rail Vehicles;  Ticket Vending Machines; and  Other (including utility and service diversions, shelters and the Delivery Partner Programme Management team).

3.2.

The OJEU notices for the Phase 3A DCM and TOS contracts made provision for the contracts to be extended to include repeat works for Phase 3B. The DCM contract for Phase 3A also includes a pricing mechanism to govern the pricing of the 3B works.

3.3.

GMPTE intends to procure the Phase 3B works by extending the Phase 3A contracts, on the basis that satisfactory ongoing performance and value for money, within approved budgets, is confirmed.

3.4.

To confirm value for money, a price testing exercise has been completed with the Phase 3A contractors to test the contract extension pricing mechanisms contained within the existing contracts. A robust analysis and challenge of the contractor’s price submissions has been completed, including modelling and benchmarking against prices for Phase 3A, the Ashton and East Didsbury extensions, and current industry standards. The price for the works for the Metrolink extensions to Manchester Airport and Oldham and Rochdale town centres will be within available budgets, including the ‘betterment’ contributions from Oldham and Rochdale councils, described above.

3.5.

An independent assessment of costs has been completed by the PTE’s advisers, and a series of value engineering workshops have also been undertaken. Furthermore, regular commercial and contractual meetings have been held with the existing DCM contractor and with the utility companies.

3.6.

GMPTE will manage these contracts through its Integrated Delivery Team using the Metrolink Delivery Partner, Parsons Brinckerhoff, who will take day to day responsibility for the delivery and for the interface between the contractors and GMPTE. Mechanisms are in place to enhance the capacity within the internal and external teams to deliver and manage the schemes. Infrastructure Design, Construction and Maintenance (‘DCM’)

3.7.

Negotiations have been progressing with the 3A contractor, MPact Thales (‘MPT’), and it is anticipated that confirmed costs will represent value for money, within total available budgets, including the ‘betterment’ contributions from Oldham and Rochdale councils, described above.

12

3.8.

The technical proposals and methodology submitted by MPT for the works align with the technical proposals incorporated in the Phase 3A DCM contract and the Phase 3B Deed of Variation and are in accordance with the principles of the Design Guide developed by GMPTE in conjunction with the Local Authorities.

3.9.

The benefits of extending the contract with the existing contractor include maintaining a qualified and mobilised workforce; reduced mobilisation costs incurred by both GMPTE and the contractor; preagreed rates and discount benefits contained within the existing contract; and cost reductions and time savings as a result of avoiding a lengthy tender exercise, which would typically take between nine and twelve months to complete.

3.10. Furthermore, extending the current contract will provide reduced risk, reduced interfaces and will benefit from the continuity of technical proposals. 3.11. The advanced works undertaken on the Airport Line and Oldham and Rochdale town centre extensions have been utilised to inform the procurement process, and to assist the identification, quantification and pricing of risk. The advanced works have also allowed for the development of value engineering options which have been further evaluated and finalised. 3.12. As part of the advanced works a programme of topographic, environmental, geotechnical and power supply surveys has been completed to provide key input into the design process. In addition, site enabling works have progressed in line with schedule, including site clearance; demolition works; and environmental mitigation works; and a number of third party agreements and land agreements are also being progressed. Utilities works are also being undertaken and Network Rail have been engaged to undertake development work. 3.13. Meetings and presentations have taken place with key stakeholders including Manchester CC, Trafford MBC, Oldham MBC, Rochdale MBC, Manchester Airports Group and Network Rail. Detailed discussions are also ongoing with the Highways Agency and the Environment Agency to contribute to the development of the scheme, as well as with Stockport MBC with regard to the interface to the SEMMMS road scheme and any further tram or tram train developments. Tram Operating System (‘TOS’) 3.14. Negotiations are progressing with the current TOS contractor, and it is anticipated that confirmed costs will represent value for money, within approved budgets. 3.15. The proposed technical solution for TOS is the same as that which is being implemented for the Phase 3A extensions and the extensions to Ashton and East Didsbury. As this solution is an extension of the technology currently being implemented, there are no anticipated technical interface issues with the other phases of TOS.

13

3.16. The benefits of extending the TOS Contract with the existing contractor are fundamentally the same as those associated with extending the DCM Contract; however additional benefits, including significant reduced risk of systems integration and commonality of spares and maintenance requirements will also be generated. Light Rail Vehicles (‘LRVs’) 3.17. Negotiations with the existing LRV supplier have been ongoing over recent months and are drawing to a conclusion. It is anticipated that confirmed costs will represent value for money, within available budgets. 3.18. Fourteen LRVs will be procured for the extensions to Manchester Airport and Oldham and Rochdale town centres. Other (including Utility and service diversions, shelters and the Delivery Partner Programme Management team). 3.19. It is intended that the other Metrolink works and services will be procured by extending existing contracts, on the basis that satisfactory ongoing performance and value for money, within approved budgets, is demonstrated. 4.

FUNDING & FINANCE Background

4.1.

The total investment package within the Greater Manchester Transport Fund (‘GMTF’) was approved by the GMITA Policy & Resources Committee on 24th July 2009, and by the AGMA Executive Board on 31st July 2009, with the total investment package within the Greater Manchester Transport Fund (‘GMTF’) of £1,512 million being funded from £448 million of Regional Funding Allocation; £165 million grant from the Department for Transport in relation to the SEMMMS road scheme; a £147 million ‘top slice’ from the Greater Manchester Integrated Transport Block LTP funding over a period of 9 years from 2010/11; up to £775 million from a combination of borrowings, to be undertaken by GMITA, and partly from local/third party contributions.

4.2.

It further approved in principle the proposals for GMITA borrowings. The proposals included within that report explained that GMITA would repay the borrowings in full by 2045, in part through the application of Metrolink net revenues (being Metrolink revenues, net of operating, maintenance and other related costs) attributable to the Metrolink extensions funded through the Transport Fund; in part by the application of the annual ring-fenced levy contributions (which will be raised by GMITA under its levying powers in addition to the amounts which the GMITA requires to levy to fund its other expenditure) and in part from local revenue contributions. The Committee also agreed at this meeting that GMITA could borrow up to £38 million for the development of public transport projects in 2009/10 and that interest costs of circa £0.2 million in the year would be met from the ITA

14

financing budget for 2009/10. Borrowings during 2009/10 were within the approved £38 million borrowing limit. 4.3.

A further update on progress was provided to the GMITA Policy and Resources Committee at its meeting on 20th November 2009 and proposals for borrowings for the development of schemes in the GMTF in 2010/11 were noted, to be formally agreed at the subsequent Authority meeting.

4.4.

At the Authority meeting on 18th December 2009, the Authority agreed that GMITA could borrow an additional £140 million in 2010/11 and incur interest costs of circa £4.9 million in 2010/11 in respect of existing and additional borrowings for the development and delivery of public transport projects within the GMTF. These borrowings included for the forecast 2010/11 expenditure in relation to the works on the Metrolink extensions from Droylsden to Ashton and from Chorlton to East Didsbury; the 2010/11 forecast expenditure in relation to the Airport and Oldham and Rochdale town centre extensions; and the works required to progress the other public transport schemes within the GMTF.

4.5.

At the 18th December meeting the Authority also agreed that the budget and associated borrowings for the construction of the Trafford Depot included within the budgets for the Airport Line and the Oldham and Rochdale town centre extensions of £12.9 million, excluding risk provisions, contingency and procurement costs, be released to enable these works to progress.

4.6.

At its meeting on 23 April 2010, the Authority considered a report setting out the Treasury Management Strategy Statement and Borrowing Limits for 2010-11 and the Prudential and Treasury Indicators 2010-11 to 2012-13; and approved the borrowing requirements over the three year period from 2010/11 to 2012/13. This included the borrowing requirements for Metrolink Improvement Projects, Metrolink Phase 3A and the Greater Manchester Transport Fund in the three year period to 2012/13.

4.7.

The Government announced on 10th June that they would be reducing the Local Transport Plan (‘LTP’) Integrated Transport Block (ITB) funding nationally by 25%. A total of £40.299 million was originally made available to Greater Manchester in total for 2010/11. The Government announcements reduced this funding by 25% to just over £30 million.

4.8.

In order to accommodate the top slices previously agreed by AGMA, including the £147 million (over ten years) top slice into the GM Transport Fund, as reported to AGMA at its meeting on 25th June, the LTP ITB funding available to each GM Authority (including GMITA) will be reduced by approximately 50%. DCLG were subsequently informed of the revised allocation of the GM reductions on 25th June, which results in approximately £11.2 million of LTP ITB funding in 2010/11 for the GM Authorities (incl GMITA).

15

Airport Line and Oldham and Rochdale town centre extensions 4.9.

The following sections describe the funding and finance strategy for the Airport Line, and the Oldham and Rochdale town centre extensions in the context of the overarching strategy set out above.

4.10. Table 1 below shows the budgeted total costs and the sources of funds for the Metrolink Airport Line and the Oldham and Rochdale town centre extensions. “Other” relates to the contributions from Oldham and Rochdale councils referred to above. Table 1 – Scheme Budgeted Costs and Funding LTP £m

Other £m

PB £m

Total £m

Rochdale town centre

3.0

2.5

30.0

35.5

Oldham town centre

4.0

5.0

80.0

89.0

Airport Line

57.0

-

341.0

398.0

Total

64.0

7.5

451.0

522.5

Scheme

Scheme Costs 4.11. The budgeted and forecast scheme costs include: the costs of the Design and Construction works; the Tram Operating System; Light Rail Vehicles; other costs including Ticket Vending Machines; shelters and utilities; other service diversion works; and appropriate allowances for risk, contingency, project management and other costs including insurance. 4.12. The procurement exercises undertaken in relation to the contract costs are set out in section 3 above. 4.13. Scheme risk allowances have been determined by undertaking a series of workshops, including with the proposed contractors, to ensure that all risks relating to the programme have been identified, priced and appropriately assigned. Appropriate mitigating strategies have been developed and owners have been assigned for each risk. The risks are subject to a statistical analysis which produces a quantified risk assessment (‘QRA’) and the risk allowance included within the forecast costs represents the quantified, statistical assessment of the identified risks occurring. 4.14. In addition, a contingency allowance is also included within the forecast scheme costs. The contingency included within the forecast costs of the Airport Line and the Oldham and Rochdale town centre extensions has been benchmarked and are considered to be appropriate. Further detail in respect of risk mitigation strategies is set out in section 5 below.

16

Funding Sources 4.15. Under the financial plan approved by the ITA and AGMA in July 2009, the Airport Line and the Oldham and Rochdale town centre extensions do not require RFA funding from DfT. Government has the power to ration the aggregate amount of prudential borrowings by Local Authorities across the country. However, these powers have never been exercised and the DfT are fully aware of the progress being made on the schemes; and, as no RFA funding is being provided, a Major Scheme Business Case is not required to be submitted for their approval. 4.16. The funding sources and funding profile for the Airport Line and the Oldham and Rochdale town centre extensions are set out in Table 2. Table 2 – Profile of Scheme Budgeted Costs and Funding Year ending March

2010 £m

2011 £m

2012 £m

2013 £m

2014 £m

2015 £m

2016 £m

2017 £m

Total £m

-

-

8

5

15

16

10

10

64

1

131

134

139

44

2

-

-

451

1

131

142

144

59

18

10

10

515

LTP Prudential Borrowings Total LTP and Borrowings Local contribution

**7.5

Total

522.5

Note ** - Profile to be agreed

Local Transport Plan (‘LTP’) Contributions 4.17. The £147 million of ITB LTP monies reserved for the Transport Fund has been profiled such that the impact on the minor works programmes of the Districts and the ITA is phased in over time, as set out in Table 3 below. Table 3 – LTP Contributions Year ending 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total March £m £m £m £m £m £m £m £m £m £m £m LTP

-

10

15

15

17

15

16

17

17

17

25

147

Prudential Borrowing 4.18. Prudential borrowing will be supported through a number of resource streams (ITA Levy, third party contributions and net farebox revenues) that will pay interest and cover MRP for principal repayment. Debt repayment is targeted for 2045 and the average length of time for which debt is expected to be outstanding is 23 years. The current assumption is that the required prudential borrowing will be sourced from a combination of the Public Works Loans Board and the European Investment Bank (‘EIB’). The EIB offer a potentially cost effective means of managing interest rate risks. 4.19. The EIB will, in principle, lend up to 50% of the capital costs of a programme. The EIB have indicated that they will include the costs of the Metrolink Phase 3A programme within their assessment of total potential borrowing capacity. The EIB have undertaken due diligence on the Metrolink programme and are considering a borrowing facility in the region of £500 million. This would represent approximately 50% of the borrowings included within the Transport Fund financial strategy. 4.20. The EIB have undertaken several months of project due diligence and visited Manchester in May 2010 to review the progress made to date on developing and delivering the Metrolink Phase 3A and Phase 3B extensions. Feedback during and following the visit was positive and work has progressed towards the EIB obtaining an ‘agreement in principle to lend’ at their Management Committee in early September 2010 and approval to lend from their Board in October 2010. This would enable the ITA Treasurer, in conjunction with the PTE, to negotiate a facility with the EIB, subject to confirming value for money and affordability of rates. 4.21. The resource streams, which will support the prudential borrowing, are detailed below. The current financial strategy does not assume any potential benefits arising from an EIB facility. Levy Contributions 4.22. The agreed levy contributions commenced in 2010/11 and will be equivalent to 3% of the 2009/10 levy. The contributions will increase each year for six years until 2015/16 at the rate of 3% of the prior year levy, as shown below in Table 4. The levy contributions will continue at the 2015/16 level for the following thirty years, which reflects the thirty year asset lives. Table 4 – Levy Contributions Year ending March Levy Contribution

2010

2011

2012

2013

2014

£m

£m

£m

£m

£m

-

4.9

10.1

15.6

21.3

18

2015

2016 onwards £m £m

27.3

33.6

Net Revenues 4.23. Net revenues generated by the schemes delivered by the GMTF will be available to support the prudential borrowing. In line with current agreed ITA policy, fares are assumed to increase at RPI + 1% year on year. Resource contribution by Manchester Airports Group 4.24. As previously reported and agreed, The Manchester Airports Group (‘MAG’) are making a resource contribution with a nominal value of £50 million. 4.25. The MAG contribution will be used principally to service capital provisions and interest payments on borrowings. 4.26. The Heads of Terms agreed with MAG include the following principles:  a limited early morning service will run between G-Mex and the Airport between 03:00 and 06:00 on a daily basis. After the first twelve months of operation, if the limited service is loss making, MAG will have the option to continue this, or a reduced service, and will cover any associated operating losses;  employees on the Airport site will be entitled to receive a concessionary season ticket;  MAG will be entitled to a royalty payment to the extent that revenues in respect of the Airport Line exceed those set out in GMPTE’s base case revenue assessment. The revenue assessment will be adjusted (upwards or downwards) to the extent that the revenue and costs estimates included in the base case are revised following the letting of the Operating and Maintenance contracts for the Airport Line;  the PTE and MAG will work together to develop ticketing, advertising, car parking and data sharing strategies; and  if the Airport line extension does not proceed, or does not complete by an agreed ‘long stop’ date, the ITA / PTE will indemnify MAG for any contribution payments made in respect of the Airport Line. 4.27. The forecast borrowings to be undertaken in the period to 2017/18 in respect of the Metrolink extensions to Manchester Airport and Oldham and Rochdale town centres totals £451 million, as set out in Table 2 above. 4.28. The borrowings for 2010/11, 2011/12 and 2012/13 and the associated capital financing costs for the GMTF in total (including the borrowings required for the Airport Line and the Oldham and Rochdale town centre extensions) were approved as part of the Authority’s Prudential Indicators on 23 April 2010. 4.29. The borrowings required in 2013/14 and 2014/15 of £44 million and £2 million respectively for the Airport Line and the Oldham and Rochdale town centre extensions are submitted for approval in this report.

19

4.30. The capital financing costs for the Airport line and Oldham and Rochdale town centre extensions will be funded from the MAG contribution and from the Levy and Metrolink net revenues. 5.

RISK MITIGATION STRATEGIES

5.1.

An overview of the mitigation strategies and financial contingencies included within the Transport Fund, and those specifically related to the Airport Line and the Oldham and Rochdale town centre extensions is summarised below.

5.2.

To protect against the risk of increased capital costs the following mitigation strategies and financial contingencies have been built into the financial strategy:  schemes have been allocated nominal budgets, and prudent inflation assumptions have been built into the financial projections;  each scheme has risk contingency built into the forecast costs which is based on a statistical probability analysis of detailed risk registers, as detailed earlier; and  each scheme has a further contingency included in the forecast costs to manage unquantified or unforeseen risks, as detailed earlier.

5.3.

To protect against the risk of reduced revenues or increased operating or financing costs the following mitigation strategies and financial contingencies have been built into the financial strategy:  Metrolink passenger numbers and resultant revenue forecasts have been projected using prudent demand and yield forecasts;  forecast Metrolink operating costs have been calculated by projecting forward known existing, and future 3A, operating costs;  forecast net revenues have been subject to a risk adjustment before being included in the financial strategy; and  forecast financing costs are based on a prudent view about future interest rates. Further detail in this regard is set below.

5.4.

In addition to the risk mitigation strategies referred to above in relation to revenues, the financial strategy for these schemes does not rely on net revenues from the Airport Line and the Oldham and Rochdale town centre until the mid 2020s.

5.5.

The interest rates used in the financial strategy for prudential borrowing reflect a prudent view of future interest rates, which assumes that rates increase to between 5.5% and 6.0% (depending on the period of the loan) by 2012. These rates are approximately 1.0% higher than the long term average rates observed over the last fifteen years. This is a deliberately prudent planning assumption given the uncertainty around future rates that will be available from the Public Works Loan Board (‘PWLB’), which does not allow interest rates to be fixed in advance;

20

and given that it is not known whether a fixed rate arrangement can be entered into with the EIB until October. 5.6.

PWLB rates are currently near an historic low (between 3.5% and 4.3%, depending on the period of the loan), which is below the rates assumed in the financial plan.

5.7.

Since the beginning of the financial year, the ITA has taken out the following loans in order to protect its funding position:  £30 million on 7th May, over periods of between 6 and 23 years, at interest rates ranging from 3.09% to 4.51%;  £20 million on 10th May, over periods of between 7 and 28 years, at interest rated ranging from 3.37% to 4.45%; and  £20 million on 19th May, over 10 years at a variable interest rate that is currently 0.65%.

5.8.

As referred to above, GMITA / PTE has entered into discussions with the EIB for a borrowing facility of approximately £500 million. The EIB are able to provide an option to “forward fix” interest rates for around five years into the future, thereby removing the risk of interest rates rising between now and the drawdown of debt in future years.

5.9.

The indicative rates provided by the EIB are within the current range of PWLB rates and are below the rates assumed in the financial plan.

5.10. On the basis of the current PWLB rates and the indicative rates provided by EIB, there is some considerable flexibility within the interest rate assumptions included within the financial strategy.

6.

RECOMMENDATIONS

6.1.

A full set of recommendations is set out on the front sheet of this report.

Sir Howard Bernstein Clerk to the Authority David Leather Chief Executive, GMPTE Richard Paver ITA Treasurer Steve Warrener Finance and Corporate Services Director, GMPTE

21

APPENDIX Metrolink Airport Line Stop Proposals

1 Introduction 1.1.

A £26 million package of advanced works to progress development and inform the procurement process for the Airport line was agreed by GMITA on 5th March 2010.

1.2.

The advanced works have informed the procurement process, and ensured that risks are identified, quantified and priced accordingly.

1.3.

A value engineering review has been undertaken which has considered a reduction in the proposed number of stops on the Airport line to deliver better value for money and improve journey times.

1.4.

Map 1, (attached) identifies the originally proposed stops and catchment areas for the Airport extension. Experience over a number of years has shown that around 800 metres is an appropriate catchment area for Metrolink stops and this has been used in the demand forecasts for Metrolink extensions. Such forecasts have been reviewed and accepted by DfT for the Metrolink lines for which they have provided funding.

1.5.

The Airport Line is 14.5 kilometres long and 18 stops were proposed on the line (excluding a possible future stop at Hough End). The table below identifies the stop density for current and future lines on the network:

Line

From

To

Eccles Manchester Airport

Cornbrook Martinscroft

Eccles W oodhouse Park

Manchester Airport East Manchester South Manchester

St Werburgh's Road Piccadilly Trafford Bar

Altrincham Oldham & Rochdale Bury

1.6.

Length Number Stops (km) of Stops per km 7.00 5.80

11.00 9.00

1.57 1.55

Martinscroft Ashton-under-Lyne East Didsbury

7.95 10.20 7.20

10.00 13.00 9.00

1.26 1.27 1.25

GMEX Victoria

Altrincham Rochdale Town Centre

12.50 23.50

11.00 20.00

0.88 0.85

Victoria

Bury

15.90

10.00

0.63

The Airport line has one of the highest stop densities of all lines, and there is a particular concentration of stops along the six kilometres of the southern section between Martinscroft and Woodhouse Park, where the average distance between stops is 0.7 kilometres. This is a similar average distance as the Eccles Line;

22

Average Length between stops (km) 0.70 0.73 0.88 0.85 0.90 1.25 1.24 1.77

however, many potential passengers for that line still choose to use other modes of transport, which is partly a result of the slower journey times compared to alternative modes. 1.7.

Reducing the number of stops on the Airport line is anticipated to have a positive impact on the overall scheme benefits as the density of stops in the areas where a reduction is being considered would still remain at a level which is consistent with other Metrolink lines (except Eccles) and will reduce journey times, which will be attractive to passengers. It is proposed, therefore, to rationalise the number of stops to reduce the journey time to and from the Airport, Wythenshawe Town Centre and the Regional centre.

1.8.

The review of stops included an objective, criteria based assessment that considered potential patronage, catchment areas, overall journey times and distances between stops.

1.9.

There are certain stops along the Airport line which are considered as key demand attractors along the route, and were not considered for removal. These stops are: 

the Airport stop;



Wythenshawe Town Centre stop;



Roundthorn stop as it serves Wythenshawe Hospital;



Sale Water Park stop, which is linked to a Park and Ride site; and



Baguley stop which is integral to the West Wythenshawe Regeneration Strategy and has potential to link with a future rail station.

1.10. The remaining stops were considered for removal as explained below.

2 Stops subject to assessment Haveley and Martinscroft stops 2.1.

Haveley stop was proposed to be constructed on a bridge over the M56, due to constraints on positioning it elsewhere. The TWA Order application in 1994 specifically requested the withdrawal of compulsory purchase powers from residential properties on Hollyhedge Road in the vicinity of Moat Road and the proposed Haveley Stop, which meant that the stop had to be positioned on the bridge due to the lack of a suitable site on the east side of the M56.

23

2.2.

The stops planned for Haveley and Martinscroft would only be 400 metres apart and construction of a stop above the motorway would not represent good value for money. It is therefore proposed to merge the Haveley and Martinscroft stops and provide a single stop to the west of the M56 in the vicinity of the Wendon Road junction and adjacent to Hollyhedge Road (as shown in Map 2). The new stop location would be between the two original stop locations and on the original alignment. The name of the stop would be subject to future consideration by Manchester City Council.

2.3.

In addition, a further value engineering opportunity is being considered, whereby the Metrolink alignment could be revised to run in the carriageway of Hollyhedge Road over the existing road bridge across the M56. This could achieve further financial benefits by removing the requirement to construct an additional bridge over the M56. This proposal is currently undergoing detailed examination and analysis, including engineering and technical consideration of the structure of the Hollyhedge Road M56 overbridge, Highways Agency requirements, and utility company estimates. Further updates on this will be given to the ITA Capital Projects Committee when the work is complete. Stops north of the River Mersey Hough End

2.4.

Earlier proposals for the Airport line included consideration for the potential for a stop at Hough End. However, the Didsbury extension includes a stop at St Werburgh’s Road, which is only 360 metres from the potential stop at Hough End. Building a stop at Hough End would reduce the line speed and would present technical challenges to accommodate the alignment levels over Chorlton Brook. It would also not represent good value for money and it is therefore proposed that Hough End is no longer considered as a ‘possible stop’ location.

2.5.

There are two stops north of the River Mersey at Hardy Farm and Barlow Moor Road. If either of these stops were not built, an acceptable (800 metres) walking distance for passengers could still be maintained.

2.6.

Barlow Moor Road stop is strategically sited at the junction with Mauldeth Road West and has the potential to serve a wider area of the Mersey Bank estate in addition to the Southern Cemetry area. Map 1 shows that Barlow Moor Road covers almost all of the urban Hardy Farm catchment. In addition, the Barlow Moor Road stop location is adjacent to the local district centre shops and services at the junction of Mauldeth Road West, which could be utilised by passengers accessing the tram stop. Metrolink stop users could also interchange with local bus services at this junction.

24

2.7.

The Hardy Farm stop location is situated in the Mersey Valley beyond the edge of the urban area, thus leaving more than half of the catchment area as undeveloped green space in the Mersey Valley. Hardy Lane links the Hardy Farm stop site to Barlow Moor Road and is a straight, level street with clear sight lines.

2.8.

If a stop were not built at Hardy Farm passengers would still have an acceptable walking distance to the stop at Barlow Moor Road. Stops south of the River Mersey to the M56

2.9.

The stops south of the River Mersey from Sale Water Park to Roundthorn, close to Wythenshawe Hospital, have a greater average spacing between stops than the rest of the Airport line. The only stop in this section that was considered for removal was at Moor Road, because it is only 500 metres from Wythenshawe Park Stop and 800 metres from the Baguley stop. However, the Moor Road Stop site is adjacent to the key community facility of the Manchester Health Academy and it would serve residential areas to the west of Moor Road that are separated from Baguley stop by Altrincham Road. For these reasons, it is recommended that this stop should be retained. Stops from the M56 to the Airport

2.10. South of the River Mersey, the largest overlap between adjacent stop catchments occurs around Wythenshawe, largely because the route loops into the town centre and then around the Woodhouse Park area on its way to the Airport. The distance between Martinscroft and Woodhouse Park stops is 5.8 kilometres and as Map 1 shows, there would be a significant overlap of catchment areas if all the proposed stops were built. 2.11. The catchment area of the Crossacres stop is almost entirely covered by the catchment areas of the Benchill, Wythenshawe Town Centre and Robinswood Road stops. This stop is therefore recommended as an option for removal. However, one of either Crossacres or Robinswood Road should be retained to maintain Metrolink access for the Brownley Road properties as there are no direct walking routes through to the town centre stop. 2.12. The Robinswood Road stop site provides little additional catchment along Robinswood Road south of Simonsway, in addition to the catchment provided by the stops at Woodhouse Park, Peel Hall, Wythenshawe Town Centre and Shadowmoss. However, as noted above one of either Crossacres or Robinswood Road should be retained to maintain access for the Brownley Road properties.

25

2.13. The removal of either Crossacres or Robinswood Road stop would improve the value for money for the scheme as a whole and improve journey times without having a detrimental impact on the number of passengers. 2.14. The Peel Hall stop serves Concord Business Park, and the Peel Hall Road / Lomand Road areas that are not served by any other stop catchment, and this stop is therefore recommended to be retained. 2.15. The stop at Shadowmoss serves Ringway Business Park. There is also an adjacent site reserved for future potential use by Manchester Airport, which would be served by the tram stop and it is therefore recommended to be retained. 2.16. Around half of the geographical catchment area of the stop at Woodhouse Park is within the Airport operational boundary, alongside, and to the south of, the railway. The stop also has limited penetration of the residential area, and this is reflected in low potential patronage figures. There are future proposals for development to the north of the Airport, but this is anticipated to be served from the Manchester Airport stop. There are also proposals for the SEMMMS road adjacent to the stop, which could affect the alignment design in this area in the future to accommodate the highway scheme. This stop is recommended as a potential option for removal.

3 Finance and Funding 3.1.

The financial benefit of removing a stop at Hardy Farm, Crossacres, Robinswood or Woodhouse Park is anticipated to be approximately £1.2 million per stop. The benefit of removing the stop at Haveley is anticipated to be approximately £1.5 million. This includes the costs of infrastructure including the stop itself, the ticket vending machines, shelters, project management costs and allowances for risk and contingency.

3.2.

The latest cost projections for the Airport line have been prepared on the basis that three of the four stops listed in 3.1 are not built, with one of those three being the Haveley stop.

3.3.

As noted in Section 2.3, a further value engineering solution is being considered in relation to the Metrolink alignment of the M56. Although the proposals may result in financial benefits, consideration will also be given to the potential cost and programme risks associated with obtaining new TWA powers to relocate the alignment into the carriageway on the road bridge.

26

4 Conclusion 4.1.

It is proposed that to deliver journey time savings and value for money, and to ensure that forecast costs are within the available budget, a contract should be let with the Metrolink contractor on the basis that at least 3 of the 18 stops on the line are not included. Journey time savings will be at least 1.5 minutes if 3 stops are not included and at least 2 minutes if 4 stops are not included.

4.2.

Delegated Authority should be given to the Chair and Vice Chair of the Authority and the Leader of the Opposition, in consultation with Manchester City Council to determine whether either 15 or 14 stops should be included and to determine the identity of the stops not to be included.

4.3.

The impact and financial implications of on-street running on the existing road bridge over the M56, should be determined and considered by the ITA Capital Projects Committee when the value engineering work has been completed.

27

Map 1 Airport Extension Stop Catchments

28

Map 2: Stop catchments excluding Hough End, Hardy Farm, Haveley, Crossacres, Robinswood Road and Woodhouse Park

29