News from John Biggs: John Meets with TfL to hear about their Cable Car plans

13 May 2011

Local London Assembly member, John Biggs yesterday met with representatives of TfL to hear about their plans for the new Cable Car between Greenwich and Newham.

The Cable Car will link the Excel Centre with the O2 and is expected to be open to the public in time for the Olympics next year.

Local London Assembly member, John Biggs said: “I have misgivings about the cable car scheme, but I do think it will benefit East London for two reasons. Firstly, it will be a tourist attraction that will put East London on the map and secondly, it will help to knit together the opposite sides of the river and make investment more attractive.”

The mayor said in July 2010, "The aim is to fund the construction of the scheme entirely from private finance."

Local London Assembly member, John Biggs said: "It remains to be seen whether TfL will recover the costs through sponsorship, as it looks as if there will always be a likely public cost contrary to the Mayor's promise. And its construction will not let the Mayor off the hook for his failure to progress a desperately needed road crossing, which I continue to view as a major betrayal of our area."

Ends

Notes

  1. John Biggs is the London Assembly member for City and East, covering the boroughs of Tower Hamlets, Newham, Barking & Dagenham and the City of London.
  2. Written Answers to John’s questions of 8th April 2011 are below.

 

Who will underwrite the costs of operating the scheme if the passenger revenues don't meet the break-even figure?

The contract includes a fixed price for the operation of the cable car for three years.  In addition to the operating costs there will also be costs associated with the “front of house” and security type activities associated with operating the cable car.  The overall operating costs are expected to be covered by fare revenue.  If they do not then TfL will be required to meet any shortfall.

Will TfL give a guarantee to the operators should the passenger numbers prove disappointing?

The contract with the operator is structured in a way that it does not take on any passenger or fare risk and therefore there is no need for TfL to guarantee.

The projected passenger numbers in the detailed plan submitted to the Thames Gateway Development Corporation are way short of the total capacity of the scheme. What estimates are you making for the number of passengers using the scheme every day?

The capacity of the scheme has been designed to meet peaks in demand at certain times of day due to the proximity of major venues at both ends of the route; for example, catering for demand at the end of O2 events.  TfL has considered a range of passenger forecasts and believes that over the course of the year there will be 1.5 to 2 million passenger journeys.  On average, this equates to a daily patronage of 4 to 5 thousand trips per day, but this disguises sharp peaks in demand at certain times of the day when the system will be operating close to capacity. 

Note that the maximum potential capacity will not necessarily be operated at all times; the system can be run at a lower speed, and with fewer gondolas in service, during times of low demand, such as if there are no planned events at O2 or ExCeL.

How much money have TfL spent developing this scheme?

£2.9m has been spent.  This includes technical and advisor costs associated with securing planning, undertaking design work, procurement of contractor and legal advice.

How much money will be spent by TfL in the 2011/12 and 2012/13 financial years on this scheme?

TfL is forecasting to spend around £54m over the two years.  This includes construction, land and delivery costs.

Will any of the spending be re-imbursed by the developer of the project?

TfL is underwriting the cost of building the scheme and seeking to recover as much of this cost as possible from a commercial sponsorship arrangement and funding from the European Regional Development Fund.  There are a number of options for how the sponsorship could be secured, either as an annual payment or up front contribution.  There are also different options about the level of involvement and potential equity stake.    TfL has started a competitive process of securing a commercial sponsor.  A bid for European regional Development Fund funding of £8m towards capital costs has also been submitted.

Will the cable car be part of the TfL network? Will this mean a subsidy from the taxpayer akin to what the bus companies receive?

The scheme will operate as part of the TfL network and be included on the Tube map and represented within the TfL journey planner.  Oyster PAYG will be accepted.  Fare levels will be set at an appropriate level that seeks to encourage usage from local people and secure sufficient revenue to cover operating costs.

What progress have you made with fundraising and what pledges of support, and for what amount, have you received to date?

In April, TfL launched a competitive tendering process seeking a partner to purchase the commercial rights associated with the scheme – namely naming and branding rights.  There are already a number of private sector organisations who have registered interest.  The process is expected to be completed by Autumn 2011.

How many staff at City Hall and at TfL, or elsewhere within the GLA family, are engaged in this project? Can you also express this as a FTE equivalent?

This has varied widely through the course of the project, with different skills required at different stages of planning, design, contract negotiation, construction.   During the planning stages around 10 FTE staff were involved at peak times but not for a prolonged period.  The delivery of the project is currently being managed by Docklands Light Railway where there are approximately 10 FTE staff involved.

What is your informed estimate of the annual operating costs for the Cable Car, leaving aside any capital repayments but including the cost of ongoing maintenance and renewals?

Operating costs are forecast to be around £3m per annum.  However this will depend very much on final decisions around operations and ticketing.

Assuming the initial capital costs can be raised, the cable car will obviously need a business plan for its ongoing operation. Has such a plan been prepared? Can a copy be published? What are its key sensitivities?

Yes, a business plan for the cable car has been prepared, but a copy cannot be published at this stage. Key sensitivities are around hours of operation, fares and ticketing, use of retail space, role of sponsor.

 

Is the Cable Car a priority or not? If so, is it a transport priority or does it serve some other purpose and if so what?

The cable car is a part of the Mayor’s strategy for improving river crossings in east London.  It provides a new river crossing for pedestrians and cyclists in an area which is subject to major growth and provides a new link between existing public transport services.  It is part of the package of improvements that includes the Silvertown tunnel and has been delivered as an early part of this wider package to ensure the benefits to pedestrians/cyclists are fully realised.  It also avoids the need to make allowance for these kind of movements in a tunnel environment which is less desirable.  The alternative to the cable car is a footbridge which is more costly and less well connected to the heart of the Royals than the cable car proposal.

It is also a form of transport that offers major economic benefits in terms of regeneration.  The Royals Vision produced jointly by the LDA; Newham and GLA supports this crossing as an integral part of the regeneration vision for the Royal Docks.  There is similar support from Greenwich in terms of the Greenwich Peninsula.

Given that the cable car journey could be achieved, in similar time, by travelling two stops on the DLR and one stop on the jubilee Line, what are the transport policy drivers of this project?

As above, the cable car is the first phase of a wider package of river crossings in east London set out in the London Plan and Mayors Transport Strategy. The cable car will be accessible to cyclists (unlike the DLR/Jubilee line) and provides a secondary route to provide resilience for the transport network, particularly important on the Greenwich side where the area – including the 25,000 seat arena and surrounding development is reliant on a single station and line. The cable car will offer a high quality alternative to the existing DLR/Jubilee route, encouraging greater interaction between the Greenwich and Newham sides, where complementary businesses, such as hotels and restaurants, are located. 

In addition, the cable car will attract new visitors to the local area, which will support local businesses and local investment and employment in a priority regeneration area.