December 2018 Update
During the past few days, there have been a number of important announcements and decisions made by MetroWest, the West of England Combined Authority (WECA) and North Somerset Council.
The latest commitments by our four local authorities are in response to Chris Grayling’s letter of 2nd October about MetroWest and funding for the Portishead line.
WECA and North Somerset are demonstrably continuing to work closely together, with a number of new legal agreements being put in place to ensure this continues. Together, they are directing MetroWest to continue with the DCO submission and continue the quest for the additional £47 million funding. Extra funding of £500,000 from the Local Growth Fund has been committed, as well as an additional £1.4 million from North Somerset.
This allows work to continue on Phase 1A – the Severn Beach and Bath line – and on Phase 1B the Portishead line through to Spring 2019.
The notes below summarise all the recent correspondence and reports from the Department for Transport, WECA and North Somerset. They are detailed and somewhat technical as the MetroWest project is far more complex and difficult to deliver than anyone might expect.
The FAQs and news pages may be helpful and the full WECA & NSC Joint Committee report can be found as item 12 here >> (PDF 180 pages!)
1. Chris Grayling’s response to Liam Fox:
The MetroWest team’s workload is now focussed on addressing the points raised in his October 2nd letter, as well as completing work on the DCO. Chris Grayling said:
- "Delivery of rail based transport system for the Bristol area remains one of my priorities"
- "I urge WECA and North Somerset to press on with the DCO for the Portishead line"
- "I have not ruled out further government support"
- "I need to see the outcome of the Bristol Area Feasibility Study"
- "Consideration to be given to light rail and tram/train options"
- "Only consider support if it includes a solution to Portishead"
- "Any government contribution will be capped and any increases will be the responsibility of the local authorities"
- "Assurance must be provided that local funding options have been truly exhausted"
- "Must be agreement to any ongoing subsidy risk among the contributing partners"
2. MetroWest benefits were restated by WECA & NSC:
2a. National & Regional:
- Strategic Vision for Rail: ‘….identifying where rail is right answer for local transport needs’
- Industrial Strategy ‘….Drive productivity by improving connections within City Regions’
- Housing White Paper ‘….Employees should be able to move easily to where jobs are without being forced into long commutes.’
2b. Local:
- Growth in GVA (Gross Value Added) post scheme opening: £31.86m
- Additional jobs post opening: 514
- Improved connectivity to Temple Quarter EZ 17,000 jobs & Bath Riverside EZ 9,000 jobs
- Car-km reductions of 4,000 in morning peak and 2,000 in evening peak
- 50,000 additional people will have direct access to rail network
- 180,000 will have enhanced services to existing stations
- Passenger trips will be 958,980 in 2021 rising to 1,295,103 in 2036
- Reduced travel times: Portishead to Bristol by road 50+ minutes – train 23 minutes, Avonmouth to Bristol by road up to 65 minutes – train 28-32 minutes
2c. Financial:
- All BCRs (Benefit:Cost ratio) are still very good or outstanding.
BCR Revenue (1st 3 years)
Phase 1 combined 3.61 - £2.15 million
Phase 1A 4.85 - £3.78 million
Phase 1B 2.15 + £1.63 million
- Funding shortfall is still £46.9 million. Looking at possible sources including:
- West of England Economic Development Fund (EDF). WECA business rates fund
- Revolving Infrastructure Fund (RIF) circa £5 million
- NSC seeking to allocate extra £1.4m funding from own resources to complete DCO
2d. Risks:
- Revenue Reversion risk means: If the project is not completed, then the funding obtained cannot be used as the project has failed to deliver an asset to capitalise. All the money spent – currently about £12 million – then has be paid for out of income (Council Tax) by the four authorities. If it is completed, then all the funding streams in place can be used.
This risk is shared as follows:
Bristol 30% BANES 15% South Gloucs 5% North Somerset 50%
- Capital Cost risk means: If the project budget overruns again, the four authorities are liable for that overspend. This risk is split between WECA 50% and North Somerset 50%.
- Patronage Revenue risk means: for the first three years of operation the four local authorities are liable for the loss or operating profit of the line. This risk lies with WECA and the four Authorities. The latest documents state that the forecast surplus Phase 1B Portishead line revenue will be available to subsidise the first 3 years of Phase 1A Severn Beach and Bath lines.
3. DCO Delayed:
Planned submission date is now April 2019 because:
- Network Rail are late delivering some aspects
- Habitats Regulation Assessment & Imperative Reasons of Overriding Public Interest (IROPI) now has to be gone through. This is due to a new European Court Judgement in April 2018, which means the project will now have to go through IROPI process.
- Flood Risk Assessment – the Environment Agency has requested late changes to modelling of the line's flooding risks.
4. Next Steps:
All the following steps were approved at meetings in late November and early December:
- Formal authorisation to submit DCO by West of England Joint Committee; NSC (as DCO applicant); Network Rail.
- Update Agreement between the four Unitary Authorities and WECA.
- Phase 1A and 1B can potentially be separately project managed with WECA taking overall project management of Phase 1A and NSC maintaining Project Management of Phase 1B.