steve butcher - serco group - rail benefits and their effect on the local growing economy

Advise | Design | Integrate | Deliver

SERCO IN CONFIDENCE

Rail Benefits and their effect on the local growing ecomomy

Steve Butcher, Managing Director, Serco Rail

Presentation NZ Rail Conference, 4 - 5th June 2015

slide│2SERCO IN CONFIDENCE

Talking Points

Introduction

Benefits of transport on the growing economy

Dubai- case study

− Rail investment for 'place making'

− Major tourism destination

Docklands Light Rail- case study

− Transformation through rail investment

Caledonian Scottish Sleeper Service- a unique tourist

development

Rail investment at a local level- what it means for communities

Conclusion


Introduction

Dramatic shift over the last 20 years trends in rail investment growing significantly in majority of global markets

High development elements in majority of cities and communities around the world

Significant global investment observed in key markets of UK, US, Australia and Middle East

Investment is principally either green field nation-building (seen in Middle East) or driving economic regeneration (UK and US)

Probably the peak of the investment to date is the High Speed 2 (HS2) project linking Leeds and Manchester to London at a projected total investment of NZD170Bn – along with Many Others.

A Large Number of new projects are dedicated passenger lines including Driverless Metro.

On existing lines, having mixed freight/passenger, maximising use is key

Real cooperation, Train regulation policies, both vitally important (coordination of freight companies/infrastructure owners)


Transport Benefits on the Local Growing Economy

Efficiencies - reducing cost and time for passenger and freight movements releasing capacity for further economic growth

Reliability - improves time performance and reduces wastage, thus reducing economic leakage

Economies of Scale - access to wider markets adds to economies of scale in production, distribution, and consumption, increasing growth

Productivity - transport increases productivity gained from access to a broader base of inputs such as labour, raw materials, parts and energy, and to broader markets for outputs

Connectivity - linking more locations both directly and indirectly increases the value and effectiveness of transport


Dubai

Dubai - A History of Transport Investment

− Dubai was originally built on trade and tourism not oil- Dubai

Airport was opened before oil was found in 1965!

− Massive investment in commercial development and tourism to

replace oil revenue (oil accounted for 24% of GDP in 1990,

under 5% of GDP today)

− Rapid and diverse population growth from around 60,000 in

1968 to around 2.2 million today. Less than 15% are UAE

nationals. Expat workforce predominantly with most nationalities

represented

− 15 million tourist visitors- Dubai 7th most visited city.

− Rail seen as critical part of a modern city – expanding by the day

− Dubai Airport-world’s busiest international airport. Al Maktoum

International Airport will be largest in the world when completed.

Rail link joining the two also planned.

− Over $35Bn of major transport improvements through to 2020.


Dubai- Specific Investment in Rail and Light Rail

Dubai Metro

− Cost in excess of US$4Bn

− 74.6 Km and 49 stations

− 79x5 car driverless trains

− Vital economic hub - over 160 million passenger journeys

last year (started in 2009)

Dubai Airport People Mover

− Airport handles 70.4 million passengers a year

− 10 min service connects Terminals 1 & 3

− Critical for effective airport use


Dubai- Specific Investment in Rail and Light Rail

Palm Jumeirah Monorail Dubai Light Rail

− Cost approx US$400m

− 5.45 Km

− 5 stations

− 4 vehicles

− Exclusively tourist operation

− Now connected to Light Rail and

Metro starting to move to attract

commuter traffic

− Cost approx US$1 Bn

− 14.5 Km

− 11 stations

− 11 vehicles

− Strong tourism focus- connects

Burj al Arab, Mall of the Emirates


Economic Impacts of Dubai Metro


Dubai Investment and Growth of Rail – Expo 2020

Strongly aligned bid behind internationally sanctioned Expo 2020- Connecting

Minds, creating the future- Sustainability, Mobility and Opportunity

Benefits

− 277,000 new jobs

− $40 Bn boost to the economy

− Projected 25 million new visitors (70% overseas tourists)

− Extension to Dubai Metro Red Line direct to Expo Site

− Rail forms part of a suite of seamless transport activities

− Integrated transport links played a vital part in the 2020 evaluation panel


London Docklands Development Programme

Largest economic redevelopment project in Western Europe

Govt agency set up to manage investment over a 17 year period

Provided over 3.9 Bn UK Pounds Govt funding (over 1 Bn in transport).

Resulted in over 7 Bn pounds private sector investment (old infrastructure

– vital component in investment).

Canary Wharf Development over 3 Bn pounds.

24,000 homes built.

Additional 23,000 jobs

Expansion of London City Airport


Docklands Light Rail, London

DLR investment an integral part of the economic regeneration of London's

Docklands both as a residential and a business hub

Planning of future DLR services part of a London-wide strategy to manage

growth in London. Strategy managed by central agency Transport for

London.

Integrated into the London Plan- a strategy for the next 20-30 years.

Identifies areas of Greater London where there is opportunity for additional

jobs, more housing and regeneration. Focus on growth in East London.



Staged development ran parralel to urban development projects

− Initial System constructed between 1985-87 at a cost UK Pounds 77m. Opened

serving 15 stations with 11 vehicles.

− First Stage Extension 1991-94 included underground stations and Canary Wharf

− Second Stage Extensions 96-99. Under the Thames to Greenwich and Lewisham

− Third Stage Extension 04-09. Extended to Woolwich Arsenal- included London City

Airport

− Major extension work integrated system into London Olympic infrastructure costing

over 200m UK Pounds. DLR travel network of choice during London 2012.

(Transport modes and organisations really working together – seamlessly)


Docklands Light Rail, London- Ongoing Development

1 Bn pounds investment announced by Chinese Investment company in Royal

Albert Dock to create 3rd business and finance hub by 2017

− 35 acre site adjacent to London City Airport

− 20,000 jobs

− 6 Bn UK Pounds economic boost

Canary Wharf Housing Development constructing 3,600 new properties from 2015.

Japanese Data Centre Operator KDDI investing over 135 Million UK Pounds in

Dockland facility.

Pinnacle Regeneration’s 500 m UK Pound investment in 177 acre development

project of 10,000 homes on the Greenwich Peninsula- underway

This did not happen by accident – focused vision, planning, long term 20-30 year

planning window where transport was see as catalyst to major regeneration and

development


Caledonian Sleeper Service, Scotland- Introduction

One train a day in either direction from Fort William to London Euston overnight

service Sun-Fri

Approx 13 hour trip end to end departing around 9:00 pm

First Class and Standard Class Berths plus seated carriage

75 carriages in current fleet


Caledonian Sleeper Service, Scotland- Tourism Catalyst

Declining/static tourism numbers

both overseas (2.7 million) and

domestic (12 million)

Recognition of Scottish sleepers

role as provider of high-end tourist

revenue- in the world’s top 6 train

journeys

Service split as stand alone

franchise under control of Scottish

Govt with specific targets for

development


Caledonian Sleeper Service, Scotland- Client Requirement

Strong Scottish identity and unique brand

Focus on the discerning traveller with significant disposable income

New service for a 15-year franchise- encourages investment

Making the service part of the Scottish experience

Improvements required in

− Catering

− Security- berth doors and lockable stowage's in open areas

− Windows required in all carriages for future rail cars

− Layout of berths and vehicles key to attracting larger numbers


Caledonian Sleeper Service- Uniquely Scottish

Unique branding and a greatly enhanced marketing drive- showcasing Scottish product and supporting local industry

Investment of 100 million UK Pounds on 75 new cars manufactured by CAF- in service by 2018

Designed by renowned Edinburgh designer Ian Smith

On board, guests will enjoy

− En-suite berths for the First Class guests

− Improved Standard Class berths

− New pod flat-beds for affordable comfort

− Cradle seats for Standard Class guests

− Luxurious new Brasserie Club Car

− Films and TV available via free WiFi


Local Impact of Rail Investment

Investment in rail at a macro-scale can have a massive effect on a city's population and even

change a country's economic outlook

For many people a relatively small, locally focussed investment can have just as profound an

impact on their lives and the state of the local economy – Developers starting to engage more.

Liverpool South Parkway on Merseyside in the UK was developed with NZD $38M investment

in 2006. Provided:

− Strategic multi-modal transport hub in area of high unemployment. Rail patronage grew

from 280,000 to 760,000 in 5 years

− Improved connectivity to growing John Lennon Airport (2 miles away) grew from 1 million

in 2007 to 5 million in 2012

− Road network a vital component for integrated transport solution including effective park

and ride opportunities


Benefits for Freight using Rail

Key benefits of using rail in the freight sector for the local economy are:

Efficiency - Rail is around 60% more fuel efficient than road transport. Next to water transport, rail transport is the most energy efficient.

Environment - Rail produces less pollution – reduces carbon emissions, lower environmental impact.

Reduced Congestion - An average freight train takes over 100 trucks off roads => reducing road congestion, particularly in urban environments.

Safety - Rail is significantly safer than road freight. By a factor > 7 times

04/06/2015


Conclusions

Rail has in the past, and continues to be, a major catalyst to deliver strong economic

investment and can transform areas when part of a coordinated redevelopment

programme

A well run integrated network provides ample access for both passenger and freight

services- that balance is essential to maximise the economic return from rail

For certain niche applications rail can provide a significant as a passenger mode for major

tourist events such as sports competitions; the rail journey can also be a tourist attraction

in its own right

When targeted effectively even modest local investment provides a direct economic return

steve butcher - serco group - rail benefits and their effect on the local growing economy

Business