1. November 30 th London/Spain Webminar: Railway Infrastructure in the UK Spanish construction and railway industry 1 Jim Steer Director & Founder, Steer Davies Gleave 28-32 Upper Ground London, SE1 9PD www.steerdaviesgleave.com

2. November 30 th London/Spain Overview Ι Organisation of the rail sector Ι Current key issues ■ Funding ■ Value for money ■ Franchising Ι Main projects ■ London area ■ National network ■ High-speed rail

3. November 30 th London/Spain Key Players

4. November 30 th London/Spain Organisation Ι Network Rail ■ Regulated ■ Raises its own finance ■ Revenue determined by an independent rail regulator  From TOCs  From government grants ■ Contracts out all major maintenance and upgrades Ι TOCs ■ Franchises (7.5 – 15 year duration) ■ Open access Ι Roscos

5. November 30 th London/Spain Key current issues Ι Funding – CP4 just agreed by government (through to 2015) Ι Value for Money – review underway (Sir Roy McNulty) major concerns Ι Franchising – policy consultation just completed

6. November 30 th London/Spain DfT business plan 12th November 2010 ‘Structural Reform Priorities ‘ 1. Deliver the Coalition’s commitments on high speed rail Carry out the preparation needed to start work on a high speed rail line early in the next Parliament connecting London with Heathrow, Birmingham, Manchester and Leeds, as the first step towards a national high speed rail network for the whole of Britain 2. Secure our railways for the future Secure the sustainability of the railway and create capacity for improvement of services, by addressing the high cost of the UK railway compared with other railways and comparable industries; continue to invest in Crossrail and Tube upgrades in the capital 3. Encourage sustainable local travel 4. Tackle carbon and congestion on our roads 5. Promote sustainable aviation

7. November 30 th London/Spain DfT overall planned expenditure 2011 – 2015 Source Dft business plan £bn Baseline 2010/11 2011/12 2012/13 2013/14 2014/15 Total departmental 12.8 13.0 13.1 12.5 12.0 Administration spending 0.3 0.3 0.3 0.2 0.2 Programme spending4.8 5.0 4.8 4.7 4.2 Capital spending 7.7 7.7 8.1 7.5 7.5

8. November 30 th London/Spain DfT expenditure Plan to 2014/5 Ι £18 billion of rail investments, including Crossrail; Ι £4 billion on HA major projects, capital maintenance and enhancements; Ι £6 billion on local transport major projects, capital maintenance and Ι enhancements; Ι Funding for a further tranche of PFI projects and Ι Funding to ensure the Tube upgrades will go ahead.

9. November 30 th London/Spain major rail schemes to go ahead source DfT October 2010 Ι Crossrail will go ahead to the original scope; delivery programme for the central tunnel works extended by around 1 year; project to cost no more than £14.5bn (£1bn savings identified). Ι High Speed Rail Subject to consultation, the Government will proceed with plans for a national high speed rail network, spending over £750m up to 2015 Ι Major station upgrades totalling £2.1bn: Birmingham New Street, London Kings Cross, Reading redevelopment and Gatwick Airport stations. Ι Network improvements : Midland Main Line & East Coast Main Line.

10. November 30 th London/Spain DfT Business Plan (extracts) ‘Plans for securing a sustainable railway’... i Report on the value for money April 2011 ii Develop and publish detailed proposals on delivering a sustainable railway including reform of Network Rail November 2011 Change rail franchise terms to give operators the incentive to deliver better services, better stations, longer trains and better rolling stock December 2010 Support further capacity improvements and electrification of the rail network i Announce way forward on Intercity Express Programme, Thameslink, new rolling stock and electrification November 2010 ii Provide funding to TfL, to support infrastructure investment in the London Underground and Crossrail April 2011 – March 2015

11. November 30 th London/Spain What might come out of franchise policy review? In response to the questions asked Because of wider questions (Sir Roy McNulty’s review etc) Lengthier franchisesTesting of vertical integration Scope to vary the service offerDifferent approach (liberalised?) for ‘intercity’ franchises Transfer obligations to franchiseesPressure for TOC cost savings TOC-led rolling stock procurementFares increases (already announced) In some cases, infrastructure mgmt 11

12. November 30 th London/Spain Overview Ι Organisation of the rail sector Ι Current key issues ■ Funding ■ Value for money ■ Franchising Ι Main projects ■ London area ■ National network ■ High-speed rail

13. November 30 th London/Spain 13 Forecast all Rail Crowding in London and the South East during the Morning Peak 2026 (inward flows and load-factor – all services)

14. November 30 th London/Spain Thameslink

15. November 30 th London/Spain 15 Thameslink and Crossrail on the same scale!

16. November 30 th London/Spain The new Birmingham New Street

17. November 30 th London/Spain Freight – gauge enhancement schemes

18. November 30 th London/Spain Tyne and Wear Metro

19. November 30 th London/Spain High Speed Rail: DfT business plan milestones Ι London – Birmingham HS2 timescale ■ Consultation Dec 2011 ■ Complete engineering design April 2013 ■ Environmental assessment & consultation September 2013 ■ Hybrid bill through Parliament May 2015 Ι Birmingham – Manchester & Leeds ■ Consultation Dec 2014 ■ Complete engineering design (est) April 2016

20. November 30 th London/Spain High Speed One completed Nov 2007 20

21. November 30 th London/Spain 21

22. November 30 th London/Spain HS2 Key facts Ι 207 km ■ Stations at Euston, Old Oak, Birmingham International, Birmingham Curzon Street ■ HSR rolling stock depot (Birmingham) ■ Connection northwards to West Coast Main Line (Lichfield) Ι Mean capital cost estimate £16.5bn (2009 prices) Ι Northern Limbs of the ‘Y’ ■ Manchester 140 km capex £5.1bn ■ Leeds 174 km capex £5.8bn Ι Benefit cost ratio for HS2 2.4:1 DfT, 2009 discount year and prices 22

23. November 30 th London/Spain Programme Ι Formal consultation in the new year – on the London – West Midlands scheme and (in parallel) wider HSR strategy/rationale Ι ‘spade in the ground’ by 2015 Ι Opening mid 2020s Ι Northern Limbs of the Y-shaped network mid 2030s ■ Manchester 140 km capex £5.1bn ■ Leeds 174 km capex £5.8bn Ι Also needs a programme of works on the existing northern section of the West Coast Main Line (uncosted) 23

24. November 30 th London/Spain Key Players Ι Secretary of State for Transport Rt Hon Phillip Hammond MP Ι Chairman HS2 Ltd Sir Brian Briscoe Ι CEO HS2 Ltd Allison Munroe Ι Chief Engineer HS2 Ltd Prof Andrew McNaughton Ι Advisers to HS2 Ltd: ■ Arup ■ Systra/MVA ■ Mott Macdonald ■ Ernst & Young ■ Booz 24

25. November 30 th London/Spain 25 Thank you