IS THE METRO ON TRACK? LATEST ON THE FLAGSHIP TRANSPORT PLANS REVEALED
It’s the Welsh Government’s flagship transport project, but what is happening to the South Wales Metro rail scheme? Business editor Sion Barry explores.
WITH a ring-fenced budget of £738m, the South Wales Metro will see the electrification of the Core Valley Lines (from Treherbert, Aberdare, Merthyr and Rhymney into Cardiff) as well as the Coryton and City Lines through the capital.
Funding consists of £158m from the European Union, £445m from the Welsh Government and the £1.3bn City Deal for the Cardiff Capital Region and £125m from the UK Government.
As it stands the project would be liable for VAT at 20%, while its contingency for overspend is expected to be used in full.
The European funding is conditional on the entire project being completed by 2023. However, if there is slippage due to coronavirus, it would seem unlikely that they would seek repayment.
ASSET TRANSFER
For mainstream work to commence it required the UK Government to devolve the rail asset from Network Rail to the Welsh Government and its transport body Transport for Wales.
That took two years of painful negotiations, but was finally concluded in March.
The Welsh Government had to pay £496.8m for an asset valued by Network Rail and the UK Government.
However, the asset transfer has been fiscally neutral to the Welsh Government, as what has effectively happened is that the Treasury has transferred the amount paid back to the Welsh Government.
But why go through this time-consuming and complicated process? If Network Rail was selling the asset to, say, a private company, then fair enough, but this was from one government in the UK to another for what is a public asset in Wales.
Network Rail worked out an asset value, taking into account rail enhancements and their impact on the value of the regulatory asset base, but this is only maintained at a UKwide level. So, while the network in other parts of the UK have had significant rail enhancements, Wales, despite having around 11% of total track, has been below 2% for decades. So, this is a valuation that bears little relation to investment in rail in Wales. The asset should have just been transferred say, for a nominal £1.
Typically this is what has happened with rail transfers in England, notably the original sections of the Manchester Metrolink to the Greater Manchester Passenger Transport Authority.
It has also created a precedent, and one that could apply again if the entire rail network in Wales, as the Welsh Government wants, is devolved. In such a scenario an asset valuation would need to factor in where the Welsh Government has financed enhancements, like on the Ebbw Vale route, even though it was not a devolved matter.
The UK Government also needs to ensure that a fair and equitable operational subsidy for the now-devolved rail asset (previously paid to Network Rail) taking into account underinvestment on the Metro network, is paid to the Welsh Government. While the asset has been transferred, this arguably is the far more important part of the equation, and one that has yet to be finalised.
SO WHAT WORK IS UNDER WAY?
The design and construction of the project is being delivered by KeolisAmey, which won the bid to run the current Wales and Borders rail franchise, which it took over from Arriva Trains Wales in October 2018.
The franchise and Metro delivery contracts were awarded by Transport for Wales. The franchise, which runs for 15 years, is branded as Transport for Wales Rail Services.
There has been some work, but not the installation of electrified lines, a technology which is hardly new, and one being called for on the Valley Lines as far back as the 1930s.
This includes the Taff’s Well depot and control centre for the Metro.
The first major construction will be the bridge interventions at the south end of the Taff’s Well site, which will allow access to the depot from the rail line, beneath the highway.
The Metro depot will serve as the base for 400 train crew, 35 train maintenance staff and 52 control centre staff. It is intended for tramtrains for which there will be stabling capacity for 36. They are expected to be pressed into service from late 2022 and will operate on the Aberdare and Merthyr Lines.
ELECTRIFICATION
Overhead line electrification work will commence this summer. On the commissioned rolling stock the first Class 398 tram-trains will be in operation on the Aberdare, Merthyr and Treherbert Lines from 2022, and the City Line from 2023.
The Class 756 trimodes (which can switch between diesel, battery and electric modes, will be in operation on the Rhymney and Coryton Lines from 2023.
NEW STATIONS
■ Crwys Road in Cardiff (by end of 2022)
■ Loudoun Square in Cardiff (by end of 2023)
■ Cardiff Bay (by end of 2023)
■ Treforest Estate (by end of 2025)
■ Gabalfa in Cardiff (by 2028)
ENGINEERING WORK
It will be a mixture of midweek night working, weekend possession and longer blockades. Transport for Wales is working with KeolisAmey, local authorities and Network Rail to ensure disruption is minimised as much as possible during construction. There will be bus replacement services as required.
Some 151km of track will be electrified, of which 10.5km will be permanently earthed sections, but operate in battery mode, like under tunnels and a section of the Rhymney Line.
WORKFORCE
There are currently 250 people, rising at peak to around 600 to 800. As part of the asset transfer deal some 31 Network Rail staff have moved over to Transport for Wales.
PASSENGER NUMBER PROJECTIONS
Around 13.5m passenger journeys are expected to take place each year on the Metro.
This is expected to increase by approximately 15-20% over the next six years on the Core Valley Lines.
This is based on pre-coronavirus pandemic forecasts.
On the Core Valley Lines a turnup-and-go service will be implemented with four services an hour at peak from the periphery of the network into Cardiff and back from locations such as Rhymney and Merthyr, compared to one nearly every hour currently.
PONTYPRIDD WILL BE AT THE HEART OF THE METRO WITH 12 SERVICES, BOTH DIRECTIONS
Although the Metro will deliver a far better service than that offered currently provided with ageing diesel trains,the increased frequencies desired on the City Line (no change at just two services an hour) will require a long standing network constraint in Canton to be addressed. This is on part of the network which will still be the responsibility of the UK Government so they perhaps should be expected to contribute to the costs of relieving this bottleneck.
A strategic solution here could also free up more capacity on the Vale of Glamorgan Line. Increasing frequency on the Coryton Line, no change than current at two and hour, also needs to be addressed.
TRANSPORT FOR WALES VIEW
Chief executive of Transport for James Price said: “We recognise that the coronavirus is having a huge impact on our lives and we’re doing all we can to ensure we support our communities as well as government at these difficult times.
“We are prioritising our most essential projects to ensure investment into the Welsh economy continues and we’re proud to have taken an important step forward in the delivery of the South Wales Metro.
We have successfully completed the transfer of rail assets from Network Rail, it’s taken many years of preparatory work and complex legal negotiations to get to this point, and I’d like to thank all partners involved for their hard work and collaboration.
“South Wales Metro works are well under way. At the start of the year, we opened our Metro infrastructure hub at Treforest, as well as starting construction work on our Metro control centre at Taff’s Well.
“We’ve been undertaking surveying and design work across the valley railway lines and are excited to progress onto the next phase.”
“Transport for Wales can now get on with this once-in-a-generation project and start the huge task of building the South Wales Metro.
“It is a major, long-term project that won’t happen overnight. We now have significant physical infrastructure work to do to overhaul our rail network which was largely built in the Victorian era ready for our new faster, greener and more frequent train service.
“We hope that the people of South Wales and our neighbours living near our railway lines will be excited by the opportunities the South Wales Metro will bring.
“I also want to assure them that we’ll do all we can to minimise disruption.”
THE IMPACT OF COVID-19
Like other rail franchises, KeolisAmey has seen a huge drop in passenger numbers and reduced services. Passengers are down by more than 70%.
It operates on an agreed profit margin with Transport for Wales of around 3%, with flex for exceeding targets, but also clawbacks, which has already been implemented with several million pounds of fines, for not hitting targets.
In England the Department for Transport has effectively nationalised the rail franchises by taking on risks and revenues for the next six months.
The franchises, which are still responsible for day-to-day operations, are now getting a management fee.
The Welsh Government has injected £40m of funding in order to support the Wales and Borders rail franchise, due to the impact of the pandemic.
Discussions are continuing on other support measures with KeolisAmey.
If there are prolonged social distancing restrictions, so reducing passenger capacity, it will impact on revenues and KeolisAmey’s ability to make a margin.
In theory, although there is nothing to suggest this, it could just walk away, with the Welsh Government taking over as an operator of last resort.
Or the terms of the contract could be changed to a simplified management one, with more control for Transport for Wales.
The position in Wales is a little more complicated than in England, as KeolisAmey, through a separate infrastructure company from its franchise operating one, is also delivering the Metro.
In a statement KeolisAmey said: “We continue to work positively with Transport for Wales to agree the appropriate way forward to deliver our contract and the transformation of rail services.”