Coventry – Rail Line Upgrade MSBC

Appraisal Summary

September 2011

CONTENTS

1 INTRODUCTION 1 1.1 Background 1 1.2 Scheme Objectives 1

2 CURRENT SERVICE AND PASSENGER DEMAND 3 2.1 Existing Rail Service 3 2.2 Base Rail Demand 3 2.3 Recent Growth in Base Rail Demand 4

3 MODELLING APPROACH 6 3.1 Introduction 6 3.2 Scheme Elements 6 3.3 Modelling Approach 7 3.4 Summary of Approach 12

4 MODEL RESULTS 15 4.1 Base Demand on the Coventry – Nuneaton Line 15

5 ECONOMIC APPRAISAL 21 5.1 Introduction 21 5.2 Capital Costs 21 5.3 Operating Costs 21 5.4 Revenues and Subsidy 22 5.5 User and Non – User Benefits 22 5.6 Economic Appraisal 23 5.7 Cost Benefit Analysis Results 28

Table 1 Existing Timetable 3 Table 2 Preferred Scheme Timetable (Half-hourly) 8 Table 3 Coventry Arena Events Traffic Forecast 12 Table 4 Summary of Approach to Modelling Key Scheme Impacts 13 Table 5 Coventry – Nuneaton Passengers: Model vs November 2009 15 Table 6 2016 Do Minimum Weekday Passenger Forecast (2-hour periods) 16 Table 7 2016 Do Minimum Annual Passenger Forecast 17 Table 8 Historical Rail Patronage Growth 17 Table 9 2016 Do Something Weekday Passenger Forecast (2-hour periods) 17 Table 10 2016 Do-Something Visum Model Annual Passenger Forecast 18 Table 11 2016 Long Distance and Arena Event Trips 19 Table 12 2016 Combined Annual Passenger Forecast 19 Table 13 2016 Additional Annual Passenger Forecast (DS – DM) 19 Table 14 Mode Share Analysis - Screenlines 20 Table 15 Capital Costs (1st Quarter 2011) 21 Table 16 Annual Additional Operating Costs (1st Quarter 2011) 21 Table 17 Revenues and Subsidy, 2002 prices and Outturn Prices 22 Table 18 Breakdown of Quantified Benefits 24 Table 19 Monetised Time Benefits by Size of Time Saving (£k) 24

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011

Table 20 Quantified Wider Economic Benefits (£k PV). 28 Table 21 Economic Appraisal – Preferred Scheme (Present Values) 28 Table 22 Economic Appraisal – Preferred Scheme Capped 2026 29 Table 23 Economic Appraisal – Next Best Alternative 29 Table 24 Sensitivity Test Results 30

Figure 1 Coventry – Nuneaton Corridor 2 Figure 2 Coventry – Nuneaton Line within the Rail Network 2 Figure 3 Key Existing Passengers Flows 4 Figure 4 Passenger Growth March 2007 – September 2010 5 Figure 5 Scheme Elements and Impacts 6 Figure 6 Public Transport Network 9 Figure 7 Coventry PT Visum Model Zones 10 Figure 8 Highway Model network 10 Figure 9 Demand Forecasting and Appraisal Process 14 Figure 10 Change in Accessibility to Coventry City Centre 25 Figure 11 Change in Accessibility to Coventry Arena. 26 Figure 12 Change in Accessibility to Station 26 Figure 13 Change in Accessibility to Bermuda Park 27 Figure 14 Change in Accessibility to Nuneaton 27

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011

1 INTRODUCTION

1.1 Background

Coventry City Council, County Council and the Integrated Transport Authority for the West Midlands (Centro) are bidding for funding from the Department for Transport (DfT) for upgrading the existing railway line between Coventry and Nuneaton.

The Coventry to Nuneaton corridor (see Figure 1) lies partly within the city of Coventry and partly in Warwickshire. The northern area includes the principal settlements of Nuneaton and Bedworth which are located on the Warwickshire Coalfield and have been traditionally associated with industries which have over the last 20 years experienced significant industrial decline and consequently suffer high levels of unemployment, low income levels, and several areas of multiple deprivation. The population of Coventry City and Nuneaton and Bedworth Borough is significant, most recently estimated to be around 430,000 in 2008.

The Coventry – Nuneaton rail line runs between the Trent Valley Line at Nuneaton and the to at Coventry station. The route forms an important connection between the lines running further north and south, particularly the Nuneaton – Leicester and Coventry – Leamington Spa / Banbury / Oxford routes.

The rail corridor is 10 miles long with double track, recently re-laid. There is a 45 mph line speed and the corridor has recently been re-signalled to modern standards with the potential for 60mph line speeds. It is an important route for freight with 2 sidings (the Prologis branch and Murco Petroleum at Bedworth) and is regular used by container trains.

Figure 2 shows the corridor within the rail network and the stations on the route. The existing service calls at Coventry, Bedworth and Nuneaton only and operates broadly hourly.

1.2 Scheme Objectives

The Coventry – Nuneaton Rail Line Upgrade scheme involves providing a half hourly service and calling additionally at two new stations at Bermuda and Coventry Arena. This will increase accessibility to the rail network and provide a more attractive level of service which will assist in providing improved connectivity to aid transport movements and encourage regeneration and economic growth in the corridor.

The primary objectives of the scheme are;

• Improved access to Coventry, the Arena development area, the Bermuda Park development area and Nuneaton supporting the economic growth and regeneration of these areas in a sustainable manner.

• To provide high quality, sustainable, public transport in this key corridor. The scheme also works towards reducing congestion and carbon emissions by offering a greater range of travel options.

• Improved performance on the national rail network through removal of the Coventry Nuneaton service from the West Coast Main Line through provision of a bay platform at Coventry.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 1 of 30

It will also support the major Friargate redevelopment proposal that has the potential to deliver 15,000 new jobs to the area directly adjacent to Coventry station.

Figure 1 Coventry – Nuneaton Corridor

Figure 2 Coventry – Nuneaton Line within the Rail Network

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 2 of 30

2 CURRENT SERVICE AND PASSENGER DEMAND

2.1 Existing Rail Service

The timetable for the current service is shown in Table 1. The timetable is broadly hourly on Weekdays and Saturdays with a gap in the mid morning.

Table 1 Existing Timetable

Nuneaton 0637 0737 0828 0930 1110 1210 1310 1410 1510 1610 1710 1810 1910 2010 2110 2220 Bermuda Park ------Bedworth 0644 0744 0835 0937 1117 1217 1317 1417 1517 1617 1717 1817 1917 2017 2117 2227 Arena ------Coventry 0656 0757 0847 0953 1134 1234 1338 1434 1534 1634 1738 1834 1938 2034 2134 2239 Journey Time 0019 0020 0019 0023 0024 0024 0028 0024 0024 0024 0028 0024 0028 0024 0024 0019

Coventry 0612 0706 0804 0906 1045 1145 1245 1345 1445 1545 1645 1745 1845 1945 2045 2144 Arena ------Bedworth 0623 0717 0815 0917 1056 1156 1256 1356 1456 1556 1656 1756 1856 1956 2056 2155 Bermuda Park ------Nuneaton 0630 0727 0823 0925 1104 1203 1303 1403 1503 1603 1703 1803 1903 2003 2103 2202 Journey Time 0018 0021 0019 0019 0019 0018 0018 0018 0018 0018 0018 0018 0018 0018 0018 0018

2.2 Base Rail Demand

Existing Lennon Data for 2009/10 for the Coventry – Nuneaton service code (3280) provides an estimated base demand of 217,170 passengers per annum of which 44% are wholly within the corridor and 56% involve interchange at either / or Coventry and Nuneaton.

The Lennon figure is likely to be underestimated as it is based on ticket sales data and under-forecasts flows against counts primarily due to a range of tickets that don’t have a specific origin – destination. In particular the data fails to capture Centro area season tickets sales which are available with add-ons for stations in the wider journey-to-work area including Bedworth and Nuneaton. Therefore some allowance needs to be made for these additional flows and other factors such other area tickets (eg: day rovers), staff pass use, ticketless travel and potential differences between the modeling and actual behaviour of through passengers.

A one day rail passenger survey undertaken in Autumn 2009 revealed that 52% of trips have at least one end of the journey off the line and 8% of trips are through trips with neither origin nor destination between Coventry and Nuneaton. Therefore the proportion of through trips may also be underestimated by Lennon by 4%. The top destinations quoted off the Coventry to Nuneaton line are;

• Leicester (25%) • Birmingham, (5% each) • Loughborough, Nottingham, Tamworth, Leamington, Oxford and Rugby (3% each); and, • Hinckley and (2% each).

The relative importance of the existing flows on the line is shown in Figure 3.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 3 of 30

Figure 3 Key Existing Passengers Flows

30.0%

25.0%

20.0%

15.0% Route

10.0%

total of the route %

5.0%

0.0%

h n th h th n h th ton rt o rt o rt u a o d orth d o o e w n Nor South N n N S n d o - dwo - - Sou icester o - - u e L y - e L N B Leicester - y B n n - th th - y tr tr - o r - tr n n on - London rth o ry y n e n n - Leicestert w wor t e to o a neat rth - Le d d n v ove a e u o e e entry - o Cov C e Nuneato B v ve n N B C u Nun Bedwo Co Co Coventr N Nuneat Bedw

Passenger loading counts on the Coventry-Nuneaton rail corridor were sourced from (LM) the train operating company. These counts were collected by ticket inspectors on each service for a week and consist of 3 to 5 observations. These were compared with the result of the 1 day survey which revealed that the 1 day survey underestimated trips – especially in the interpeak and pm peak periods. The LM counts were 20% to 25% higher than the 1 day survey.

2.3 Recent Growth in Base Rail Demand

In the last decade engineering works associated with the West Coast Main Line modernisation resulted in the rail service being operated by replacement bus services for long periods, depressing rail use. Passenger demand has been growing steadily since the rail service was restored. Figure 4 presents the passenger demand on the Coventry – Nuneaton line from the rail industry MOIRA model1 which is based on ticket sales data. This shows that there has been significant growth in passenger demand for the existing service particularly between March 2009 and March 2010.

1 Note MOIRA also under-forecasts non destination specific tickets / journeys. Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 4 of 30

Figure 4 Passenger Growth March 2007 – September 2010

Passenger Journeys

300000

250000 200000

150000 100000

50000 0

7 7 0 0 -07 0 0 08 08 -09 1 1 -10 c- n- ar ar- ar ar- un- M Jun-07Sep- De M Ju Sep-08Dec-08M Jun-09Sep-09Dec-09M J Sep

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 5 of 30

3 MODELLING APPROACH

3.1 Introduction

The approach taken to forecasting the demands, revenues and benefits of the scheme takes account of all of the identifiable impacts of the scheme and application of the most appropriate modelling tools to quantify the impacts.

3.2 Scheme Elements

Figure 5 shows a diagrammatic representation of the scheme elements and impacts which were identified for determining the modelling approach. This identifies 6 key transport impacts.

Figure 5 Scheme Elements and Impacts

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 6 of 30

Table 2 shows the proposed timetable for the new service derived from detailed timetable modelling taking account of the freight services on the line and interactions at Nuneaton. Provision of a bay platform at Coventry Station will remove the need for southbound trains to wait for, typically, 5 minutes to access the platform. This negates the journey time penalty of calling at two new stations. Detailed timetable planning work suggests the end to end journey times will reduce from 24 minutes to 21 minutes southbound and will increase slightly from 18 minutes to 20 minutes northbound

3.3 Modelling Approach

Rail demand forecasts are usually based on the application of elasticity based models (such as MOIRA) and trip rate models for new stations. The trip rate model approach was not followed for this scheme as the corridor and service have no realistic local comparator stations for calibration of trip rates. In addition, the scheme operates within a relatively self contained corridor of high bus and highway traffic movements which would not be assessed accurately in the traditional approach.

3.3.1 Available Models

Most of the demand and benefits are expected to come from within the corridor between Coventry and Nuneaton – where the main frequency impact and new stations will be provided. Coventry City Council commissioned the development of a full range of transport models to cover the City (and North – South Corridor to Nuneaton) between 2008 and 2011. These comprise;

• Public Transport (bus and rail) assignment model; • Highway (cars, light and heavy goods vehicles) assignment model, and; • Choice model2 to provide modal switch, trip frequency and trip redistribution changes in response to changes in either the public transport or highway models.

The models were created for the appraisal of a range of transport schemes in the corridor including this rail scheme and bus rapid transit schemes, as well as examining the transport implications of developments.

The benefit of these models is that they produce forecast changes in rail use based largely on existing trip levels in the corridor and incremental change in transport conditions.

(a) Public Transport Model

The Coventry Public Transport Models were created in 2009 based on 2008 public transport interviews and counts. The rail matrix was developed from passenger surveys and counts on the rail network factored to line flows from the West Midlands RPA model. The public transport network is detailed – as shown in Figure 6.

2 ‘Stage 2’ choice model used for MSBC submission included Modal Choice and a combined frequency / distribution function and was based on trip origins and destinations. The ‘Stage 3 / 4’ model based on Production and Attraction matrices enabling a full trip distribution function to be calibrated was not available at the time of the MSBC submission. Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 7 of 30

Table 2 Preferred Scheme Timetable (Half-hourly)

Station Nuneaton 0537 0614 0639 0707 0737 0807 0837 0907 0937 1007 Bermuda 0541 0618 0643 0711 0741 0811 0841 0911 0941 1011 Bedworth 0544 0621 0646 0714 0744 0814 0844 0914 0944 1014 Arena 0550 0627 0652 0720 0750 0820 0850 0920 0950 1020 Coventry 0558 0635 0700 0728 0758 0828 0858 0928 0958 1028

Coventry 0540 0610 0640 0710 0740 0810 0840 0910 0940 1010 Arena 0547 0621 0647 0717 0747 0817 0847 0917 0947 1017 Bedworth 0552 0626 0652 0722 0752 0822 0852 0922 0952 1022 Bermuda 0556 0630 0656 0726 0756 0826 0856 0926 0956 1026 Nuneaton 0600 0634 0700 0730 0800 0830 0900 0930 1000 1030 Station Nuneaton 1045 1108 1207 1239 1307 1337 1407 1437 1507 1537 Bermuda 1049 1112 1211 1243 1311 1341 1411 1441 1511 1541 Bedworth 1052 1115 1214 1246 1314 1344 1414 1444 1514 1544 Arena 1058 1121 1220 1252 1320 1350 1420 1450 1520 1550 Coventry 1106 1129 1228 1300 1328 1358 1428 1458 1528 1558

Coventry 1043 1111 1140 1206 1240 1310 1340 1410 1440 1510 Arena 1050 1118 1147 1213 1247 1317 1347 1417 1447 1517 Bedworth 1055 1123 1152 1218 1252 1322 1352 1422 1452 1522 Bermuda 1059 1127 1156 1222 1256 1326 1356 1426 1456 1526 Nuneaton 1103 1131 1200 1226 1300 1330 1400 1430 1500 1530 Station Nuneaton 1607 1639 1707 1737 1807 1837 1907 1937 2007 2037 Bermuda 1611 1643 1711 1741 1811 1841 1911 1941 2011 2041 Bedworth 1614 1646 1714 1744 1814 1907 1914 1944 2014 2044 Arena 1620 1652 1720 1750 1820 1850 1920 1950 2020 2050 Coventry 1628 1700 1728 1758 1828 1858 1928 1958 2028 2058

Coventry 1540 1610 1640 1710 1740 1810 1840 1910 1940 2010 Arena 1547 1617 1647 1717 1747 1817 1847 1917 1947 2017 Bedworth 1552 1622 1652 1722 1752 1822 1852 1922 1952 2022 Bermuda 1556 1626 1656 1726 1756 1826 1856 1926 1956 2026 Nuneaton 1600 1630 1700 1730 1800 1830 1900 1930 2000 2030 Station Nuneaton 2107 2137 2207 2237 2307 Bermuda 2111 2141 2211 2241 2311 Bedworth 2114 2144 2214 2244 2314 Arena 2120 2150 2220 2250 2320 Coventry 2128 2158 2228 2258 2328

Coventry 2040 2110 2140 2210 2240 2310 Arena 2047 2117 2147 2217 2247 2317 Bedworth 2052 2122 2152 2222 2252 2322 Bermuda 2056 2126 2156 2226 2256 2326 Nuneaton 2100 2130 2200 2230 2300 2330

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 8 of 30

The model is constructed in the VISUM software platform and is a multi-routing assignment model which assesses the ‘generalised travel times’ by alternative routes (including combinations of different services), identification of realistic alternative routes and allocation of the travel demand across the available routes according to their relative attractiveness. The Visum Public Transport model covers three time periods, AM peak, PM peak and Inter-peak, each covering two hours, 0700 – 0900, 1600 – 1800 and an average two hours between 1000 and 1600, respectively.

There is a detailed zone structure in the model especially inside Coventry and the north – south corridor, as shown in Figure 7. There are larger zones in the other Warwickshire districts. This ensures an accurate representation of available route choices in the model.

An advantage of this model is that interaction between the proposed new stations and improved level of service is modelled in detail (including taking account of timetable interactions) enabling through rail and bus / rail combined trips to be assessed.

A disadvantage of the model is that the impact on longer distance trips through interchange at Coventry and Nuneaton is limited by the geographical scope of the model. (See section 3.3.2).

Figure 6 Public Transport Network

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 9 of 30

Figure 7 Coventry PT Visum Model Zones

(b) Highway and Choice Models

The highway models are also built using the VISUM software platform and were created by updating a previous highway model using 2008 traffic counts. The coverage of the highway model is shown in Figure 8.

Figure 8 Highway Model network

Nuneaton

A444

M6 A45 M69

A46

A429

A46

Kenilworth

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 10 of 30

The opportunity to switch between the highway model and the public transport model in response to the improved accessibility is determined through the application of the Choice model. The model is based on an incremental choice structure which assesses the change in the ‘do-minimum’ and ‘do-something’ scenarios for the two forecast years 2016 and 2031 compared to the reference case for the base year.

A further benefit of the use of the corridor assignment / choice models is that forecast additional rail demand is largely constrained to the existing traffic levels within the model. There is a restricted generation of new demand, related to the level of change in accessibility brought by the scheme, produced by the Choice Model related to the proportionate change in accessibility. The forecasts are therefore more likely to be constrained than the alternative of trip-rate forecasts and are considered reasonable.

3.3.2 MOIRA Model (Longer Distance Trips Impacts)

The MOIRA rail industry demand and revenue forecasting model covers the whole of the UK rail network and is based on ticket sales data. The model covers all rail trips and services and utilises elasticities in line with PDFH3 to assess the implications of timetable alterations.

An up-to-date MOIRA model was secured from the Department for Transport with base data for 2008 / 09. Using this model ensured that the appraisal could include the effects of recent investment in the capacity and services on the West Coast Main Line, both the Trent Valley route through Nuneaton and the West Midlands branch through Coventry which received an increase from 2 to 3 trains per hour to London. The model also provides a more realistic view of patronage on the line, reflecting the fact that patronage has grown significantly over the past 3 years.

This model overcomes the geographical limitation of the Coventry Transport Models to assess some specific aspects of the scheme impacts;

• The frequency improvement impact on connectivity between Coventry and Nuneaton to places north and south and longer distance through journeys; • The impact on longer distance trips to / from Bedworth, and; • Through analysis of the long distance trip impacts for Bedworth estimation of longer distance trips for the new stations at Coventry Arena and Bermuda.

3.3.3 Additional Rail Trips Generated by Coventry Arena

Whilst the corridor transport models cover some background trips to Coventry Arena, the existing public transport modal shares are very low. The scheme will transform public transport accessibility and is expected to result in a significant change to transport patterns.

The specific implications were analysed through processing of Coventry Arena detailed attendance information. Care was taken in processing the data to avoid inclusion of the major stadium events – which would require strengthened train services – and the underlying background traffic data that could be assumed as within the base models. Table 3 shows the results of the analysis and the additional demand included within the demand and revenue forecasts and appraisal of the scheme.

3 Rail Industry Passenger Demand Forecasting Handbook. Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 11 of 30

Table 3 Coventry Arena Events Traffic Forecast

Visitor size Number of occasions Assumed rail capture Football Matches 25 Requires strengthened train (32,000) Other sporting events 3 Requires strengthened train (32,000) Concerts (40,000) 6 Requires strengthened train 10,000 3 Requires strengthened train 8,000 1 Requires strengthened train 4,400 1 440 4,000 5 2,000 3,500 1 350 1,500 – 3,500 40 7,906 (calculated from bookings) 1,000 – 1,500 39 Assumed within Transport Models 1 – 1,000 4516 Assumed within Transport Models

3.3.4 Coventry Bay Platform Impacts

The removal of the existing passenger service from laying over on Platforms 1 and 2 onto the new bay platform at Coventry station will provide increased capacity for other services passing through the station. Detailed timetable modelling using RailSys revealed an average performance (reduced delays) benefit of 6 seconds per passenger. MOIRA model data provides the numbers of existing passengers.

Whilst it would be possible to estimate passenger and revenue growth for this impact the time savings are relatively small in terms of the longer distance journeys that are affected and (though the revenue per journey would be high) the computation of the benefits is considered inappropriate in relation to the scale of the demand and revenue impact expected. As a result, only the performance benefits of this element of the scheme were included within the economic appraisal.

3.4 Summary of Approach

Our approach is to use the best model / methodology for the forecast of each impact of the scheme, taking great care to avoid double counting. The approach is summarised against the key scheme impacts in Table 4.

The application of more than one transport model for demand, revenue and user benefits forecasts resulted in the need to combine the results in an economic appraisal spreadsheet. In addition, the transport models were unable to accurately forecast non- user benefits so the Rail Appraisal Guidance estimation of external impacts approach was used for the appraisal of non-user benefits.

The Structure of the modelling an appraisal process is shown in Figure 9.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 12 of 30

Table 4 Summary of Approach to Modelling Key Scheme Impacts

Scheme Impact Approach / model for Approach / Model for demand and revenue Benefits forecasts Improved Frequency existing stations – Coventry Transport TUBA (User Benefits) within Corridor Models; • PT Transfer • Car Transfer • Generation New stations trip generation – within Coventry Transport TUBA (User Benefits) Corridor Models; • PT Transfer • Car Transfer • Generation Improved Frequency existing stations – MOIRA MOIRA (User benefits) long distance Improved frequency Bedworth station – MOIRA MOIRA (User benefits) long distance Long distance trips from new stations Analysis of MOIRA data Analysis of MOIRA data for Bedworth Additional trips generated by Coventry Analysis of Visitor Data Analysis of MOIRA data Arena – Assumed mode share Bay Platform benefits - MOIRA passenger volumes and PDFH values.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 13 of 30

Figure 9 Demand Forecasting and Appraisal Process

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 14 of 30

4 MODEL RESULTS

4.1 Base Demand on the Coventry – Nuneaton Line

4.1.1 2008 / 09 models

The base (spring 2008) VISUM public transport model matrices were developed from bus passenger surveys undertaken in 2008. The rail demand matrix was formed from Centro’s rail counts at Coventry station (which gave information by train service / line), and Centro’s rail passenger origin – destination (OD) surveys (at local stations). In Spring 2009 Coventry Station passenger Origin Destination surveys were undertaken, the Coventry station trip ends were redistributed to reflect the observed arrival modes / distribution and Centro’s Coventry Station counts by line were used to expand the data.

The model was calibrated against counts undertaken by the train operating company (London Midland) in 2009. The model validated well with the comparisons by time period shown in Table 5.

Table 5 Coventry – Nuneaton Passengers: Model vs November 2009

Period / Direction Section Model Forecast November 2009 Passengers Observed AM peak Southbound Nuneaton to Bedworth 69 78 Bedworth to Coventry 80 94

AM peak Northbound Coventry to Bedworth 34 31 Bedworth to Nuneaton 41 36 Inter Peak Southbound Nuneaton to Bedworth 55 50 Bedworth to Coventry 55 53

Interpeal Northbound Coventry to Bedworth 54 71 Bedworth to Nuneaton 54 71 PM Peak Southbound Nuneaton to Bedworth 45 55 Bedworth to Coventry 52 53

PM peak Northbound Coventry to Bedworth 98 108 Bedworth to Nuneaton 85 101

In most cases the modelled flows are slightly lower than the observed flows suggesting that forecast rail use is conservative.

Expansion of the model data outputs to annual demand forecasts involved expansion from the peak periods to 12 hours, then from 12 to 18 hours, then to annual figures with appropriate assumptions for weekdays, Saturdays, Sundays and Bank Holidays. Factors were derived from Centro’s Coventry Station counts and MOIRA data inspector.

Application of the expansion factors to the VISUM model outputs results in a base demand of 890 trips on an average weekday and over 297k trips per annum. We believe that this compares well with the MOIRA forecast and the recent count data given the ticket types that are not included.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 15 of 30

4.1.2 2016 Do - Minimum Demand

The 2016 matrices were based on the identification of the locations of future developments, trip generation / modal split and distribution using standard procedures and overall matrix growth controlled to Tempro. An increase in rail fares over RPI of 3% per annum for three years and consequently of 1% per annum is included and the networks adjusted for committed schemes. The assignment and choice models were run to derive the 2016 do-minimum trip matrices and applied back to the network to derive the Coventry – Nuneaton rail line do - minimum demand. The results are shown in Table 6.

Table 6 2016 Do Minimum Weekday Passenger Forecast (2-hour periods)

To AM Peak Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 0 13 0 27 40 Arena 0 0 0 0 0 0 Bedworth 21 0 0 0 11 32

From From Bermuda 0 0 0 0 0 0 Nuneaton 91 0 1 0 0 92 Total 112 0 14 0 38 164

To Inter Peak Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 0 10 0 40 50 Arena 0 0 0 0 0 0 Bedworth 11 0 0 0 9 20

From From Bermuda 0 0 0 0 0 0 Nuneaton 40 0 10 0 0 50 Total 51 0 20 0 49 120

To PM Peak Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 0 24 0 111 135 Arena 0 0 0 0 0 0 Bedworth 23 0 0 0 5 28

From From Bermuda 0 0 0 0 0 0 Nuneaton 49 0 6 0 0 55 Total 72 0 30 0 116 218

The forecast do-minimum trips per annum are shown in Table 7. This represents around 1,100 trips on an average weekday and around 336k trips per annum. The increase from 2008 to 2016 is 13%, approximately 1.6% growth per annum, which is conservative compared to recent background rail passenger growth in the West Midlands as shown in Table 8.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 16 of 30

Table 7 2016 Do Minimum Annual Passenger Forecast

To Annual Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 0 29,596 0 115,355 144,951 Arena 0 0 0 0 0 0 Bedworth 33,555 0 0 0 21,397 54,952

From From Bermuda 0 0 0 0 0 0 Nuneaton 115,961 0 20,511 0 0 136,471 Total 149,515 0 48,267 0 136,752 336,347

Table 8 Historical West Midlands Rail Patronage Growth

Year 04/05 05/06 06/07 07/08 08/09 09/10 Patronage (m) 29.3 30.9 32.8 35.5 37.6 40.0 % Change per 6.9 5.5 6.1 8.2 5.9 6.4 annum

The rail line / service under-performs in terms of transport in the corridor. The rail service with less than 1 train per hour is paralleled by a high capacity dual-carriageway and a single carriageway old road and by bus services operating at 8 buses per hour in the north of the corridor and 32 buses per hour in Coventry to the south (on the Foleshill Rd + Lockhurst Lane). As a result passengers are not choosing to use rail for local trips in the corridor and are more likely to use rail only for longer journeys. The net result of this is a low existing rail mode share.

4.1.3 2016 Do – Something Demand Forecasts

The forecast demand for the scheme is produced from 3 sources;

• VISUM Assignment and Choice Models – weekday ‘within Corridor‘ trips; • MOIRA model – annual long distance trips, and; • Coventry Arena event data – annual additional events trips.

(a) Corridor Model Forecasts

The 2016 Do-Something VISUM model (Corridor) demand forecasts are shown in Table 9 for each time period. The figures shown exclude the growth in through trips north of Nuneaton and south of Coventry.

Table 9 2016 Do Something Weekday Passenger Forecast (2-hour periods)

To AM Peak Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 31 12 1 32 76 Arena 21 0 2 2 6 31 Bedworth 38 2 0 27 11 78

From From Bermuda 25 0 0 0 21 46 Nuneaton 96 2 1 45 0 144 Total 180 35 15 75 70 375

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 17 of 30

To Inter Peak Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 34 10 4 65 113 Arena 36 0 4 3 11 54 Bedworth 18 4 0 5 12 39

From From Bermuda 3 4 2 0 14 23 Nuneaton 49 24 6 5 0 84 Total 106 66 22 17 102 313

To PM Peak Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 119 30 16 127 292 Arena 38 0 2 1 4 45 Bedworth 32 1 0 1 9 43

From From Bermuda 6 2 0 0 9 17 Nuneaton 66 14 10 10 0 100 Total 142 136 42 28 149 497

The extra trips resulting from the frequency enhancement and new stations within the corridor are an increase of 211 trips in the AM peak, 279 trips in the PM peak and 193 in the 2-hour interpeak periods. These trips result from forecast transfers from bus in the PT assignment model, modal switch from car in the choice model and the generated demand from the frequency / distribution parameter in the choice model which reflects the change in accessibility brought by the scheme.

(b) Combined Demand Forecast

The incremental additional long distance rail trips (MOIRA) and additional captured Coventry Arena events trips are forecast for the whole year. These can be attributed to station – station flows through the following assumptions; (1) that the through trips board and alight at both Coventry and Nuneaton to interchange, and (2) that events trips are distributed 66% south and 34% north.

In Table 10 we have factored the VISUM model demand data (within Corridor) to annual demands. In Table 11 the long distance trips and additional Arena event trips are shown4. In Table 12 the Visum corridor model and long distance and event trips are combined to provide the annual demand forecast.

Table 10 2016 Do-Something Visum Model Annual Passenger Forecast

To Annual Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 107,955 31,110 12,505 167,691 319,260 Arena 84,074 0 8,568 6,426 23,258 122,326 Bedworth 54,302 8,265 0 17,675 28,126 108,367

From From Bermuda 14,905 7,962 3,678 0 34,832 61,378 Nuneaton 139,175 48,983 14,366 25,852 0 228,375 Total 292,456 173,164 57,721 62,457 253,907 839,706

4 Note that the appraisal includes a relatively small segment of the event trip market and specifically excludes stadium events including football matches. Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 18 of 30

Table 11 2016 Long Distance and Arena Event Trips

To Annual Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 23,973 544 6,181 3,970 34,668 Arena 23,973 0 0 0 12,350 36,322 Bedworth 544 0 0 0 280 825

From From Bermuda 6,181 0 0 0 3,184 9,365 Nuneaton 3,970 12,350 280 3,184 0 19,784 Total 34,668 36,322 825 9,365 19,784 100,964

Table 12 2016 Combined Annual Passenger Forecast

To Annual Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 131,927 31,654 18,685 171,661 353,928 Arena 108,047 0 8,568 6,426 35,608 158,648 Bedworth 54,846 8,265 0 17,675 28,406 109,192

From From Bermuda 21,086 7,962 3,678 0 38,016 70,743 Nuneaton 143,144 61,333 14,646 29,036 0 248,159 Total 327,124 209,487 58,546 71,822 273,691 940,670

Table 13 shows the additional rail demand resulting from the scheme.

Table 13 2016 Additional Annual Passenger Forecast (DS – DM)

To Annual Coventry Arena Bedworth Bermuda Nuneaton Total Coventry 0 131,927 2,059 18,685 56,306 208,978 Arena 108,047 0 8,568 6,426 35,608 158,648 Bedworth 21,292 8,265 0 17,675 7,009 54,240

From From Bermuda 21,086 7,962 3,678 0 38,016 70,743 Nuneaton 27,184 61,333 -5,865 29,036 0 111,688 Total 177,609 209,487 8,440 71,822 136,939 604,296

Table 13 shows that there is a forecast reduction in trips from Nuneaton to Bedworth as a result of the scheme. This was tracked back to the Visum Public Transport Model and related to a small number of trips interchanging at Arena station instead of Bedworth station as a result of the change in connectivity. This may partly be a result of the timetable modelling within the Visum model which assesses actual timetable connections and is therefore reliant on the final timetable assumptions for the scheme and bus services. However, this does not affect the overall additional demand and revenue forecast.

Further analysis of the demand sources within the VISUM / CUBE assignment / choice models reveals that the largest proportion of these additional trips come from; mode transfer bus to rail (64%); then increased long distance trips including long distance trips to the new stations (13%); then new trips resulting from the change in accessibility (generated demand) (10%); then mode transfer car to rail (9%) and the smallest proportion comes from the additional trips to Coventry Arena for medium size events (4%).

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 19 of 30

It should be noted however, that the appraisal does not include specific forecasts for park and ride at Coventry Arena and Bermuda stations and as a result probably under- represents the potential for modal shift (and further non-user decongestion benefits in the economic appraisal).

4.1.4 Mode Share Change Analysis

Table 14 shows the Public Transport model5 mode shares in the AM peak in the corridor for the base, do-minimum and do-something scenarios based on three screenlines south of Nuneaton, south of Bedworth and south of Coventry Arena. Whereas the AM peak bus mode share in the corridor is reasonably high at between 12% in Coventry and 5% in Nuneaton and Bedworth, the rail mode share is only between 0.1% and 1.4%.

Doubling the rail service frequency and providing the two new stations on the line represents a tremendous change in the opportunities to travel by rail and the relative attractiveness of the train against bus. Whilst the demand forecasts represent a two fold increase over base rail demand the resultant public transport and rail mode shares for the corridor are realistic. In particular rail is forecast to have grown to between 0.4% and 2.4% of trips. Table 14 Mode Share Analysis - Screenlines

Direc Screenline * Person Trips Mode Split (%) tion Car PT Bus Train Car PT Bus Train 2008 AM BASE NB Cov to Cov. N 13,925 1,597 1,575 21 89.7% 10.3% 10.1% 0.1% Cov N to Bed 5,081 162 140 21 96.9% 3.1% 2.7% 0.4% Bed. to Nun 3,565 159 133 26 95.7% 4.3% 3.6% 0.7% SB Nun. to Bed 2,974 208 164 43 93.5% 6.5% 5.2% 1.4% Bed to Cov. N 5,912 350 299 50 94.4% 5.6% 4.8% 0.8% Cov. N to Cov. 20,056 2,783 2,732 50 87.8% 12.2% 12.0% 0.2% 2016 DM NB Cov to Cov. N 14,261 1,754 1,729 25 89.0% 11.0% 10.8% 0.2% Cov N to Bed 5,072 186 160 25 96.5% 3.5% 3.1% 0.5% Bed. to Nun 3,844 304 281 24 92.7% 7.3% 6.8% 0.6% SB Nun. to Bed 3,126 237 179 58 93.0% 7.0% 5.3% 1.7% Bed to Cov. N 5,250 372 301 71 93.4% 6.6% 5.3% 1.3% Cov. N to Cov. 20,097 3,179 3,108 71 86.3% 13.7% 13.4% 0.3% 2016 DS 2tph NB Cov to Cov. N 14,228 1,773 1,703 70 88.9% 11.1% 10.6% 0.4% Cov N to Bed 5,072 199 150 49 96.2% 3.8% 2.8% 0.9% Bed. to Nun 3,843 315 256 59 92.4% 7.6% 6.2% 1.4% SB Nun. to Bed 3,127 241 159 82 92.8% 7.2% 4.7% 2.4% Bed to Cov. N 5,246 382 273 109 93.2% 6.8% 4.9% 1.9% Cov. N to Cov. 20,100 3,192 3,063 129 86.3% 13.7% 13.2% 0.6% * Screenline Names: Cov = Coventry Cov N = Coventry North Bed = Bedworth Nun = Nuneaton

5 Note excludes long distance and events trips – 17% of new rail demand in the corridor. Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 20 of 30

5 ECONOMIC APPRAISAL

5.1 Introduction

The economic appraisal of the scheme assesses the costs against the benefits of the scheme.

5.2 Capital Costs

The estimated capital costs for the scheme come from the GRIP4 review undertaken in 2011 and are shown in Tables 15. The costs exclude elements of the scheme related to cope with the major stadium events at Ricoh Arena, as the models exclude the benefits of major events.

Table 15 Capital Costs (1st Quarter 2011)

Element Cost Bay Platform at Coventry Station (including trackworks) £9,493,641 New Bermuda Park Station £3,030,902 Extension of Bedworth Station £1,085,297 New Coventry Arena Station £2,992,581 Project Management and Supervision £640,793 Total £17,243,214

It is assumed that the scheme can be constructed in 2012/13 and 2013/14 and operational in 2014.

5.3 Operating Costs

Table 16 shows the incremental additional operating costs for the preferred scheme. These have been estimated in conjunction with London Midland train operating company. The costs assume operation of a 2-car Class 150 train in addition to the existing Class 153 single car unit.

Table 16 Annual Additional Operating Costs (1st Quarter 2011)

Element Cost Annual Lease Cost £205,349 Rolling Stock Mtce / Cleaning £35,573 Fuel £126,427 Variable Track Access Charge £12,776 Driver £254,000 Conductor £120,000 Capacity Charge weekdays £49,096 Capacity Charge weekends £7,716 Station Access - Coventry £21,216 Additional Station Operating costs £100,000 Overheads and Operators Margin £55,929 Total £988,082

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 21 of 30

5.4 Revenues and Subsidy

Revenues have been forecast from application of a fares matrix to the matrices of new trips and from the MOIRA model forecasts. In addition, the appraisal takes account of additional parking revenues at existing stations and additional retail income as a result of additional passengers passing through the stations.

The additional revenues, operating costs and subsidy requirements are shown in Table 17 for the first three years of operation. The figures are in 2002 prices which are used in the economic appraisal of the scheme. The figures are based operating costs growth 1% above inflation and fares rises 1% above inflation following the 3% above inflation in the preceding three years.

Table 17 Revenues and Subsidy, 2002 prices and Outturn Prices

2014 2015 2016 Revenue 2002 Prices £717.6k £805.5k £937.6k Operating Costs 2002 £939.0k £945.9k £952.9k Prices Subsidy 2002 prices £221.4k £140.4k £15.4k

The subsidy reduces over the first three years as a result of both the ramp-up assumptions and underlying rail demand growth assumptions applied in the appraisal. The first three years of subsidy will be funded locally. The outturn figures in today’s prices will be significantly higher than those shown.

5.5 User and Non – User Benefits

User time savings are forecast from 3 sources with care taken to avoid double counting;

• TUBA modelling of the 2016 and 2031 matrices produced by the Visum Transport Models for benefits within the corridor, and;

• MOIRA model benefits for additional long distance trips (with appropriate adjustments for long distance trips to / from Bedworth, Bermuda Park and Coventry Arena stations.

• Performance benefits estimation for passengers travelling to / through Coventry station estimated through the application of PDFH6 factors to trips estimated from MOIRA.

Non-user benefits have been forecast for the following;

• Traffic decongestion time saving benefits – as a result of the transferred from private car journeys;

• Infrastructure maintenance cost savings as a result of the reduction of traffic on the highway network;

• Accident Savings – resulting from a reduction in trips on the highway as a result of the mode shift to rail, and;

6 Rail Passenger Demand Forecasting Handbook. Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 22 of 30

• Environment benefits attributed to improved local air quality and reduced greenhouse gasses relating to the mode switch to rail.

• Rail Safety Benefits (costs) - resulting from the increased use of rail;

• Improved Health and reduced absenteeism as a result of increased walking to access train stations, and;

• Indirect costs to Government as a result of lost revenue from fuel taxes.

The forecasting process utilised the DfT’s Guidance on Rail Appraisal External Costs of Car Use (WebTAG unit 3.13.2, April 2007) using the transport model outputs.

The wider economic impacts of the scheme have been estimated through application of the WITA programme to forecast agglomeration benefits (by employment sector), labour supply impacts and increased output impacts.

5.6 Economic Appraisal

5.6.1 Appraisal Assumptions

As the majority of benefits relate to rail passengers the economic appraisal has been undertaken in accordance with the Guidance on Rail Appraisal. Key assumptions were;

• 2002 price base and 2002 prices, deflating costs and revenues using RPI factors;

• Discounted over 60 years of operation from 2014 to a 2002 base assuming a discount rate of 3.5% from 2002 to 2040 and 3.0% for the remaining years;

• Assuming value of time growth in accordance with appraisal guidance;

• Interpolation of the growth in external costs of car use (non-user benefits) between the forecasts for 2010 and 2025 with value of time growth thereafter;

• Application of the 20.9% market price adjustment factor to the Capital Costs, Operating Costs and Revenues, and to User Benefits;

• Optimism bias of 18% applied to Capital Costs – in accordance with WebTAG 3.13.2 Guidance for Rail Appraisal;

• Operating cost growth of 1% p.a. above inflation applied to non vehicle lease costs element of the operating costs throughout the appraisal – in accordance with WebTAG 3.13.2;

• Growth in rail fares of RPI +3% for 3 years and RPI+1% thereafter with a revenue elasticity of 0.4 to determine revenue growth, and;

• Ramp up of new public transport demand, revenue and benefits assuming 50% in year one and 80% in year two of operation.

Demand, revenue and benefits growth is capped at 2037 in the sponsor case appraisal, at the year when the peak train is expected to be at capacity. An appraisal with the cap at 2026, in line with WebTAG guidance, is also presented for the WebTAG complaint case requested by the DfT.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 23 of 30

5.6.2 Benefits Summary

Table 18 shows a breakdown of the scheme benefits included within the preferred scheme (sponsors case) appraisal. The existing and new user travel time benefits equate to almost half of the scheme benefits and the performance benefits from the provision of the bay platform contributes just under a third of the scheme benefits.

Non-user traffic decongestion benefits are 15% of the benefits and the remaining benefits are small contributions from reduced accidents, improved physical fitness, quantified environmental benefits (air quality, noise and infrastructure savings) and net carbon benefits.

Table 18 Breakdown of Quantified Benefits

Benefit £PV % Existing and new users time savings – Business £3.3m 7% Existing and new users time savings – Commuting £4.5m 10% Existing and new users time savings – Other £13.6m 29% Sub-total User Travel Time Savings £21.4m 46% Non-User Travel Time Savings (decongestion) £7.0m 15% Performance Coventry Station £14.1m 30% Accidents £1.5m 3% Physical Fitness £0.8m 2% Indirect Tax £0.9m 2% Quantified Environment £0.4m 1% Carbon £0.3m 1%

Total £46.4m

Table 19 shows the quantified user and new user travel time savings broken down by the size of time savings. This shows that the appraisal takes into account both the positive and negative changes and that the benefits tend to be over 5 minutes per passenger indicating significant benefits compared to highway schemes. The negative impacts result from changes in the connection times bought by the revised timetable but are outweighed 4 to 1 by those benefiting from the scheme.

Table 19 Monetised Time Benefits by Size of Time Saving (£k)

Purpose Year -5 to -2 -2 to 0 0 to 2 2 to 5 < -5 mins mins mins mins mins > 5 mins Business 2016 -11 -2 -1 4 10 52 Business 2031 -8 -2 -1 3 7 38 Business Total -401 -101 -50 149 382 2018 Commuting 2016 -16 -3 -1 5 14 77 Commuting 2031 -11 -2 -1 4 10 54 Commuting Total -567 -121 -64 175 504 2806 Other 2016 -49 -17 -7 25 52 226 Other 2031 -34 -12 -5 17 35 157 Other Total -1761 -593 -255 880 1854 8157

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 24 of 30

5.6.3 Accessibility and Wider Economic Benefits

Figure 10 shows the change in public transport accessibility that the scheme brings to Coventry City Centre. The city centre is the focus of employment and retail growth in the region. Improving access to the city from North Coventry, Bedworth and Nuneaton will encourage people from current areas of high unemployment to access jobs in the City Centre.

Figure 11 shows the change in accessibility the scheme brings to Coventry Arena. The scheme significantly improves accessibility to large areas of North Coventry, Bedworth and Nuneaton, Including significant change in accessibility to / from the City Centre.

Figure 12 shows the change in accessibility to Bedworth Station which receives an enhanced frequency, the change in accessibility is between Bedworth and Coventry – especially to the west of the city as a result of interchange with other rail services.

Figure 13 shows the change in accessibility to Bermuda Park. Improved access to the rail network brings significant accessibility benefits throughout the study area.

Figure 14 shows the change in accessibility to Nuneaton centre is particularly noticeable in Coventry City.

Figure 10 Change in Accessibility to Coventry City Centre before after

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 25 of 30

Figure 11 Change in Accessibility to Coventry Arena. Before After

Figure 12 Change in Accessibility to Bedworth Station Before After

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 26 of 30

Figure 13 Change in Accessibility to Bermuda Park Before After

Figure 14 Change in Accessibility to Nuneaton Before After

Table 20 shows the quantified wider economic benefits estimated for the scheme. These mostly relate to agglomeration benefits accruing as a result of improved accessibility between the major towns in the corridor. There are also smaller Labour supply and increased output benefits.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 27 of 30

Table 20 Quantified Wider Economic Benefits (£k PV).

Benefit £PV Agglomeration – Manufacturing £216 Agglomeration - Construction £61 Agglomeration – Consumer Services £250 Agglomeration – Producer Services £712 Agglomeration - Total £1,239 Labour Supply Impact £299 Increased Output in Imperfectly Competitive Market £170 The Move to more/less productive jobs £0 Total Wider Economic Benefits £1,708

In addition, a study by KPMG has estimated that the scheme will create around 388 jobs in 2026 in the Coventry – Nuneaton regeneration zone. This will have a major contribution to the local economy through multiplier factors and is estimated as providing an economic uplift (GVA) of around £50m.

5.7 Cost Benefit Analysis Results

The value for money assessments based on the benefit – cost ratio (BCR) as specified in the Guidance on Rail Appraisal (section 3.10.1) are presented below.

The BCR is the Present Value of the Benefits (PVB) divided by the Present Value of the Costs (PVC) where;

• PVB = Net private revenues – private costs + subsidies + grants + user benefits + non user benefits and; • PVC = cost to government

The BCR’s are shown for the preferred scheme sponsors case and DfT WebTAG complaint case (with demand and revenue capped at 2026) and with and without wider economic benefits.

5.7.1 Preferred Scheme

The results of the economic appraisal of the preferred scheme are shown in Table 21.

Table 21 Economic Appraisal – Preferred Scheme (Present Values)

Element Sponsors Case £PV Capital Costs £13.0m Revenues £21.3m Net Operating and maintenance costs £19.3m Subsidies / grants £0.0 Present Value Benefits (PVB) £46.6m Present Value Costs (PVC) £13.0m Net Present Value (NPV) £33.6m Benefit Cost Ratio (BCR) 3.6

BCR inc. Wider Economic Benefits 3.7

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 28 of 30

The appraisal results with all demand and revenue capped at 2026, in accordance with WebTAG guidance are shown in Table 22.

Table 22 Economic Appraisal – Preferred Scheme Capped 2026

Element WebTAG Compliant Case £PV Capital Costs £13.0m Revenues £19.9m Net Operating and maintenance costs £19.3m Subsidies / grants £0.0 Present Value Benefits (PVB) £43.9m Present Value Costs (PVC) £13.0m Net Present Value (NPV) £30.9m Benefit Cost Ratio (BCR) 3.4

BCR inc. Wider Economic Benefits 3.5

5.7.2 Next Best Alternative

The next best alternative is defined as the preferred scheme without the frequency increase. The appraisal is based on the following assumptions;

• Reduced operating costs to station operating costs only (£100k per annum), plus incremental additional rolling stock related costs for 2-car Class 150 replacing the single car Class 153 to accommodate the addition demand from the new stations; • Exclusion of long distance passengers, revenue and benefits for existing stations; • Reduction of event traffic demand assuming 5% capture rate; • Removal of double counting factor; • Revised transport model outputs and TUBA results.

The resultant cost benefit results are shown in Table 23. Wider economic benefits have not been assessed as there will be no accessibility improvements between the main urban centres.

Table 23 Economic Appraisal – Next Best Alternative

Element Next Best Full Costs Capital Costs £13.0m Revenues £14.0m Net Operating and maintenance costs £5.5m Subsidies / grants £0 Present Value Benefits (PVB) £39.1m Present Value Costs (PVC) £13.0m Net Present Value (NPV) £26.1m Benefit Cost Ratio (BCR) 3.0

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 29 of 30

5.7.3 Sensitivity Tests

Table 24 shows the results of sensitivity tests undertaken on the preferred scheme. The tests show a strong benefit cost ratio event if all scheme costs are included (including elements for major stadium events) and under low economic growth scenarios. A significant increase in the value for money of the scheme results from the high economic growth and structural change scenarios (additional 2% per annum for 10 years).

Reducing the penalty associate with crossing the ring road from the station to the city centre by 15 seconds and including strategic park and ride at Coventry Arena (without additional capital or operating costs) have a positive impact on the BCR for the scheme.

Table 24 Sensitivity Test Results

Test BCR Preferred Scheme 3.6

Plus wider economic benefits 3.7 Full Scheme Costs (+£2.9m) 3.1 High Growth 4.0 Low Growth 3.1 Walk Link to Coventry Station 3.7 Structure Change @ 2% 3.9 Including Strategic Park and 4.0 Ride at Coventry Arena

5.7.4 Conclusion

The economic appraisal of the scheme shows a high benefit cost ratio which, coupled with the wider economic benefits, shows the scheme delivers a positive return and is classed as good value for money.

Coventry – Nuneaton Rail Line Upgrade, Appraisal Summary, September 2011 Page 30 of 30