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Greater Manchester Transport Fund Update and Capital Programme Monitoring Report

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15. Greater Manchester Combined Authority Report for Resolution DATE: 29 July 2011 SUBJECT: Greater Manchester Transport Fund Update and Capital Programme Monitoring Report REPORT OF: Chief Executive, Transport for Greater Manchester PURPOSE OF REPORT To present an update in relation to the Greater Manchester Transport Fund (GMTF) and other TfGM Capital Schemes. RECOMMENDATIONS Members of the Combined Authority are requested to: 1. note the contents of the report; 2. approve the proposal in relation to the Queens Road Stop on the Bury line, as detailed in section 5 of the report, which include up to £1.75 million of prudential borrowings that will be repaid from incremental net revenues generated from opening the new stop at Queens Road; 3. approve the proposals in relation to the delivery of the Park and Ride package within the Greater Manchester Transport Fund, as set out in section 4.38 of the report, which include up to £15.5 million of prudential borrowings, which were included in the Treasury Management Strategy Statement & Borrowing Limits and Annual Investment Strategy 2011- 12 approved by the Combined Authority on 1 April 2011. GMCA Report Capital Programme v1 1 21/07/2011 18:53 15. BACKGROUND DOCUMENTS Report to Greater Manchester Combined Authority: ‘Integration of Metrolink Airport extension and SEMMMS Road Scheme’-27 May 2011. Report to Greater Manchester Combined Authority: ‘Capital Programme 2011/12 to 2013/14’-1 April 2011. Report to Greater Manchester Combined Authority: ‘Treasury Management Strategy Statement & Borrowing Limits and Annual Investment Strategy 2011- 12’ Report to AGMA Executive Board: ‘Greater Manchester Transport Fund-Metrolink Phase 3B Delivery Programme and Financial Strategy Update’-30 July 2010. Report to AGMA Executive Board: ‘Greater Manchester Transport Fund Update’-25 June 2010. Report to AGMA Executive Board: ‘Greater Manchester Transport Fund Delivery Programme Update’-27 November 2009. Report to AGMA Executive Board: ‘Greater Manchester Transport Fund - Accelerated Package Update’-25 September 2009. Report to AGMA Executive Board: ‘Greater Manchester Transport Fund – Proposed Delivery Strategy and Financial Arrangements’-31 July 2009. CONTACT OFFICERS David Leather 0161 244 1030 [email protected] Bob Morris 0161 244 1022 [email protected] Steve Warrener 0161 244 1025 [email protected] Richard Paver 0161 234 3564 [email protected] GMCA Report Capital Programme v1 2 21/07/2011 18:53 15. 1 Introduction 1.1 The Greater Manchester Combined Authority approved the 2011/12 Capital Programme at its meeting on 1 April 2011. 1.2 The GMCA’s capital programme includes the continuation of the programme of activity currently being delivered by Transport for Greater Manchester (“TfGM”) and comprises the following elements: The Greater Manchester Transport Fund (‘GMTF’); Metrolink Phase 3a extensions; Other Metrolink Capital Programmes; Transport Infrastructure Fund (Bolton & Wigan); Traffic Signals Upgrade; SEMMMS Minor Capital Programme; Green Bus Fund; Smart Ticketing; and Other committed schemes including Rochdale Interchange, Wythenshawe Interchange, contractual contributions to Victoria Station Roof and the tram refurbishment programme. 1.3 The three year Capital Programme is summarised at Appendix A, and progress on individual elements, of the programme is described below. GMCA Report Capital Programme v1 3 21/07/2011 18:53 15. 2 GMTF Background 2.1 On 31st July 2009, the AGMA Executive considered, and approved a report which presented an outline delivery strategy and proposed financial arrangements in support of the Major Transport Scheme Prioritisation and funding strategy. 2.2 On 30 July 2010, the AGMA Executive considered an update report on the GMTF and re-confirmed the overarching financial strategy. 2.3 TfGM is acting as the delivery body for public transport schemes, with assistance from the district councils as appropriate, in relation to highway matters. The individual councils or the Highways Agency are acting as scheme sponsors for the four roads schemes. 3 GMTF Funding and Finance Strategy 3.1 In the period since the report to the AGMA Executive Board on 30 July 2010, there have been a number of changes to the funding profile of the GMTF, including in particular as a result of the Comprehensive Spending Review, announced in October 2010; and also as a result of the ongoing development of the schemes within the Fund. This section provides details in relation to the development of a number of schemes within the programme. 3.2 The overall cost of the programme in July 2010, including £8 million relating to the interface between the SEMMMS road scheme and the Metrolink Airport line extension was £1,528 million. 3.3 The report to the AGMA Executive Board in July 2010 included details of the highways, utilities and other complementary works that are being undertaken by Oldham MBC and Rochdale MBC; and these works, to a value of £7.5 million, are being procured on behalf of the relevant Authority by TfGM in addition to the £1,528 million referred to above. Oldham MBC and Rochdale MBC are providing funding contributions of £5 million and £2.5 million respectively in respect of these works. GMCA Report Capital Programme v1 4 21/07/2011 18:53 15. 3.4 A summary of the forecast costs of the schemes included in the GMTF Programme is set out below: July Change July Spend Future Total 2010 2011 To Date Spend Scheme £m £m £m £m £m £m ML: Droylsden – Ashton 88 - 88 39 49 88 ML: Chorlton - East Didsbury 88 - 88 39 49 88 Cross City Bus* 54 - 54 3 51 54 Park and Ride 32 - 32 4 28 32 SEMMMS 290 290 - 290 290 Longdendale Integrated Transport Strategy 100 - 100 - 100 100 LSM* 76 (8) 68 2 66 68 ML: Oldham town centre**** 84 5 89 23 66 89 ML: Rochdale** 33 3.8 36.8 11 25.8 36.8 Ashton Northern Bypass 16 - 16 8 8 16 Wigan Inner Relief Road 30 - 30 1 29 30 ML: Airport and 2CC*** 520 - 520 75 445 520 Stations 50 - 50 - 50 50 Altrincham Interchange 19 - 19 1 18 19 Bolton Interchange 48 - 48 1 47 48 Total Schemes 1,528 0.8 1,528.8 207 1,321.8 1,528.8 *Savings of £8 million have been identified for the LSM scheme allowing the local funding contribution to the Cross City Bus Package to increase. GMCA Report Capital Programme v1 5 21/07/2011 18:53 15. **This includes £1.3 million for the new stop at Kingsway Business Park referred to in paragraph 4.8 and £2.5 million for ‘Other Complementary Works’ referred to in paragraph 3.3. ***This now includes the SEMMMS interface cost of £8 million as referred to in paragraphs 3.2 and 4.66. ****This includes £5.0 million for ‘Other Complementary Works’ referred to in paragraph 3.3. 3.5 The 25 June 2010 report to the AGMA Executive noted that the default financial strategy for the GMTF assumed that borrowings for the Transport Fund are undertaken from the Public Works Loan Board (‘PWLB’). However, given that the products offered by the PWLB do not allow flexibility; principally in that they do not allow interest rates to be fixed forward in advance, the AGMA Executive was advised that discussions were progressing with the European Investment Bank (‘EIB’), which was able to offer a wider range of flexible products, including fixing forward interest rates. 3.6 The EIB undertook due diligence and visited Manchester in May 2010 to review the delivery progress for the Metrolink extensions. Feedback from the visit was positive and work progressed towards the EIB obtaining an ‘agreement in principal to lend’ from their Board. This agreement was granted during 2010. 3.7 This subsequently enabled the GMCA Treasurer, in conjunction with TfGM, to negotiate a facility with the EIB of up to £500 million, subject to confirming value for money and affordability of rates. 3.8 The indicative rates that the EIB have presented to TfGM to date compare favourably with existing Public Works Loan Board (PWLB) rates; represent value for money; and are affordable within the existing financial framework for the Metrolink programme and the GMTF. 3.9 A further report was presented to, and approved by, the GMCA on 1 April 2011 seeking approval to enter into the facility. GMCA Report Capital Programme v1 6 21/07/2011 18:53 15. 3.10 Following final negotiations with EIB on contract terms, a facility agreement, which will result in an amount up to £250 million of borrowings being fixed during 2011, was signed earlier this month. 3.11 A second facility agreement, which will result in a further £200 million of borrowings being able to be fixed during calendar year 2012, is expected to be concluded, on the same contractual terms, during 2011. 3.12 The remaining £50 million of the £500 million facility from EIB is, as previously reported, conditional upon the granting of planning permission for the Second City Crossing. An update on the development of this scheme is set out in sections 4.23 and 4.24. 4 Scheme Updates - Metrolink Extensions South Manchester Line to Chorlton (Phase 3a) 4.1 The South Manchester Line to St Werburgh’s Road commenced operations in July 2011. In addition, the Trafford Depot facility has been commissioned and handed over to the operator. This new depot will provide stabling for up to 96 trams, together with increased maintenance facilities for the enhanced fleet. South Manchester Line - Chorlton To East Didsbury (Phase 3b) 4.2 Construction works are progressing, in line with schedule and large sections of drainage and capping works are already complete. Stop construction works have commenced, and major earthworks and piling works are complete. 4.3 Agreement has been reached to modify Sandhurst Road Bridge to allow the Trans Pennine Trail to pass underneath.
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