Nottingham Express Transit Annual Report 2004/2005

NOTTINGHAM EXPRESS TRANSIT

ANNUAL REPORT 2004/2005

CONTENTS

1.0 Executive Summary

2.0 NET Line One – Progress Report

3.0 Land Acquisition and Compensation

4.0 Project Budget

5.0 Retained Costs and Risks

6.0 Network Development

7.0 Public Relations

8.0 Project Audit and Inspection

APPENDICES

1. NET Line One Budget

2. NET Line One Joint Surplus Grant Fund

3. NET Phase Two Budget 4. Retained Costs and Risks

1.0 EXECUTIVE SUMMARY

1.1 The first year of operation of NET Line 1 has been successful with patronage of 8.4 million trips, exceeding forecasts. Daily patronage is now 25,000 to 30,000, with around 5,000 per day using the Park & Ride sites. Overall public transport use in the corridor NET runs along is up by about 20% in the peaks. Around 40% of passengers use a multi mode ticket, demonstrating a high level of integration, boosted by Trent Barton’s decision to reduce competing Hucknall-City services and provide tram feeders at Hucknall. Overall, 30% of tram users have transferred from car directly or use Park & Ride. The combination of the tram and other local transport plan measures has reduced congestion in the corridor, in some parts by as much as 8% or 9%.

1.2 Operating performance continues to be generally at a high level, although during a short period in March/April tram braking software problems resulted in some units being withdrawn and services from Phoenix running a reduced frequency. Overall, performance has met 98% and 97% of reliability and punctuality targets, with the full PMS measure, including reliability, punctuality, cleaning, repair, availability, etc, resulting in payments being consistently over 99% of the full contract amount. The PMS system has been audited by City Audit Services with a satisfactory report. In the first annual survey of customer views of the service, 96% of those questioned were either very satisfied or satisfied and only 1% expressed dissatisfaction.

1.3 Although final completing works (Snagging and Retention items) have taken longer than expected, these are now complete except for outstanding compliance approvals related to ride quality, noise and vibration. Although a satisfactory situation has been reached on ride quality, the noise and vibration issues remain a concern and further investigation and assessment is ongoing. A large number of claims, under Part 1 of the Land Compensation Act, have been made by householders, mainly via a couple of Agents. The numbers significantly exceed predictions but, as yet, none of the claims have been substantiated.

1.4 On the highway the tram has operated without the problems that have been associated with the start on other systems for either the tram or other highway users. With only minor changes to the highway works being needed in response to experience, the maintenance responsibility has now been transferred to the Highway Authority.

1.5 Financial management of the project continues at a high level. Budget contingency at financial year end was £243,000 which is available to meet outstanding land payments and to retain specialist staff dealing with claims.

2 1.6 The quarterly review by the NET Project Board of project risks (Appendix 4) indicates the main areas of concern being outstanding land costs, where final costs cannot be verified until all matters have been finalised, and a contractual claim by Arrow (effectively the Contractor, Carillion). The claim from the Contractor was for a Promoters Variation to cover costs and extension of time due to alleged change in scope and Highway Authority and Planning Authority requirements. An adjudication concerning part of the claim was held in December 2004 and found in favour of the Promoters but it is unclear if the Contractor will wish to pursue the claim to further adjudication or court proceedings. This would be a lengthy and costly process. The Promoters maintain that such claims cannot be substantiated and currently await confirmation of the Contractor’s proposed course of action.

1.7 Building on the success of Line One, NET Phase 2 is fundamental to the transport strategy for the Greater Nottingham conurbation. The Chilwell via Beeston and QMC route will bring very significant benefits by serving a number of important destinations including the ng2 development site, University of Nottingham, Queens Medical Centre, Beeston town centre and Chilwell. The Clifton via Wilford route serves a number of densely populated residential areas including the Meadows, Wilford and Clifton. Both routes terminate at park and ride sites serving the M1. Work on developing these routes has continued, concentrating on mitigation measures to meet localised public concerns, finalisation of the environmental assessments and preparation of the Transport and Works Act Order (TWAO) documentation.

1.8 With a background of reductions in government transport funding availability, initial (Programme entry) funding approval has yet to be received from the Department for Transport (DfT). Constant dialogue is being maintained with DfT officials who have continued to confirm that the scheme appraisal meets DfT funding criteria and during meetings during the 2 nd quarter of 2005 have indicated that Ministerial approval would be sought during summer 2005. Subject to this, and to final approval by both Councils, the TWAO could be submitted in the Autumn leading to a Public Inquiry in Summer 2006. This would give the possibility of contracts being let and works commencing on site in Autumn 2008 and the combined Line 1 and Phase 2 services commencing operation in Autumn 2011

1.9 Work on the project continues to be developed in co-ordination with other projects, including in the City the Clearzone, Broadmarsh centre redevelopment, Nottingham Station Masterplan and Southside redevelopment and in the County the regeneration of Chilwell and development proposals in Beeston.

1.10 Funding for the Phase 2 development is being met from a combination of external grants, including ERDF, EMDA and S106 developer

3 payments, the use of both councils’ Local Transport Plan capital resources and additional Government supported borrowing approvals. During the period following submission of the TWAO the councils could be required to advance purchase a number of properties under the statutory blight and compensation provisions. Funding for this will need to be managed by the councils.

1.11 Public Relations for the project has been overwhelmingly favourable with much praise for Line 1. However, concerns over localised noise problems and the worries of some residents and businesses along the routes for Phase 2 continue to be reported or feature in the Evening Post letters page. The project team continue to work to promote the overall benefits of the system and seek to build public consensus. More widely, the project has hosted many visitors from across the world and Line One won the Municipal Journal Public Private Partnership Achievement of the Year Award and Labour Party PPP award and also played a part in Nottingham being highly commended in the National Transport Awards Transport Authority of the Year category.

1.12 The NET Project Board, which normally meets on a monthly basis, and the NET Phase Two Development Group, which meets on a fortnightly basis, have continued to oversee the overall management of the project. Progress on both of these aspects is reported to the NET Development Board and, for Line One, the GNLRT (Greater Nottingham Light Rapid Transit) Advisory Committee, whilst major policy issues are referred to both the City Council's Executive Board and the County Council's Cabinet. If necessary, both authorities consider major decisions at their main Council Meetings.

1.13 In addition to the formal reporting procedures, monthly meetings are held between key members and officers of both authorities to monitor progress and to discuss important issues with a view to exchanging information and to obtaining political guidance on the way forward.

Pat Armstrong Head of Transport Projects Nottingham City Council August 2005

4 2.0 NET LINE ONE – PROGRESS REPORT

2.1 Outstanding Works/Snagging

2.1.1 At Operating Commencement Date (OCD), having completed all of the outstanding works considered critical for the safe operation of the system, lists were agreed for remaining items for inclusion as Retention Items and Snagging Works. These are required under the Concession Agreement to be completed within the two year period following OCD. The agreed Retention Items comprised two lists; ‘List 1’ for outstanding physical works (which included 240 items), and ‘List 2’ for outstanding approval conditions (which included 320 items). The Snagging Works list included 60 issues relating to the vehicle and testing and commissioning, including Promoter non-compliance issues such as ride quality and noise and vibration.

2.1.2 The contractor, Bombardier Carillion Consortium (BCC), failed to meet their initial target of completing the outstanding issues by summer 2004, and by quite a wide margin in respect of the outstanding approval conditions. However, BCC’s desire to affect handback of maintenance responsibility to the Highway Authority focussed their attention in respect of the incomplete Retention items and by the end of March 2005 only a handful of items were remaining. As at July 2005, all of the items included on ‘List 1’ have been completed and only 4 remain open on ‘List 2’. The closure of these 4 outstanding approval conditions is linked to the resolution of the outstanding compliance issues described below.

2.1.3 Of the issues identified at OCD on the Snagging Works list, the majority have now been closed, and for the testing and commissioning issues that remain open, progress has been made in most areas. This includes ride quality where agreement has been reached in terms of specification compliance. Subject to the satisfactory resolution of all other outstanding project completion issues, the Promoters have accepted BCC’s justification that the system has been optimised and that the ride quality achieved is capable of being maintained through the application of the routine maintenance recommendations provided by BCC. The ride quality benchmark for the Performance Monitoring System (PMS) has been agreed and is now being applied under the monitoring regime.

2.1.4 Progress has been slow in resolving the outstanding noise and vibration issues, which includes wheel squeal (on on-street curves) and specification compliance in respect of lineside noise (off-street) and vibration generated noise (e.g. at the Concert Hall). The current status in respect of the three areas of concern is summarised as follows: • Wheel Squeal – Various measures have been investigated and trialled, but with varying degrees of success. However, the impact of wheel dampers, which have been trialled on Tram 215, is

5 significant and based on the initial positive results the measure will now be rolled out across the fleet. • Line side Noise – The potential exposure to Part 1 Claims led BCC, in May 2005, to undertake rail grinding on the off street section. The results of the pre- and post- grinding noise tests confirm that the grinding has been effective and that specification levels have been met in all but a few areas. BCC’s commentary on the findings has been requested and this will need to address the potential for deterioration of rail condition and future maintenance requirements to maintain a compliant system. • Vibration Generated Noise – BCC carried out further testing in March 2005 to address the Promoters’ concerns regarding specification compliance at a number of locations and in response to continuing complaints in relation to noise at the Royal Centre Concert Hall. Although the specialists report on the findings is outstanding, the results indicate that further mitigation will be required at the Concert Hall for the specification requirement for target noise levels to be satisfied. As the primary source of the residual ground borne noise is due to the movement of trams over the trackwork crossing, initial discussions with Arrow are likely to focus on the possibility of introducing speed restrictions on the approaches. At Noel Street, noise levels have been confirmed as specification compliant as a result of the speed restrictions over the diamond crossing, which have now been implemented on a permanent basis.

2.1.5 The two key tests that BCC were required to perform post OCD under the Turnkey Contract, the sub-system reliability test (Test C) and the system performance test (Test D) were passed successfully in summer 2004 and March 2005, respectively.

2.1.6 BCC are working towards the close out of the outstanding issues to achieve project completion by October 2005. For the Promoters, this is considered achievable if the proposed solution to the problem of wheel squeal is proven to be effective and if early agreement can be reached on the outstanding noise and vibration issues, particularly at the Royal Centre Concert Hall.

2.2 Highway Issues

2.2.1 The Tram has operated throughout the first year of operation with considerable success. There have not been the problems that have been associated with the start on other systems for either the tram or other highway users. There have been minor changes required both in traffic management, traffic signals and systems for operation. These have been made in full consultation with the tram operator and other interested parties.

6 2.2.2 The contractor for works on the highway (BCC) has maintained new infrastructure for the first year and from April 2005 the highway infrastructure has been accepted by the Highway Authority, with only a few minor matters remaining to be put right. Discussions have been held with the operator (Nottingham Tram Consortium, NTC) to clarify responsibilities for equipment and areas on the highway where the operator will have maintenance responsibilities and working links have been established for the future.

2.2.3 The City Council continues to promote an ambitious Local Transport Plan (LTP) programme of highway schemes. In particular the Turning Point will make significant improvements to pedestrian facilities on the approaches to the tramway around the Theatre Square area and proposals to redevelop the Old Market Square are programmed to commence in September 2005. These schemes have been managed in such a way as to minimise the impact on tram operation.

2.3 NET Line One - Operational Performance

System Performance

2.3.1 Overall performance of NET Line One, as measured by the Performance Monitoring System (PMS), has been consistently high since operations commenced, with the percentage of the total monthly availability payment claimed by the Concessionaire never falling below 99.0%. Targets for monthly reliability and punctuality (98% and 97% respectively) have been achieved throughout most of the period.

2.3.2 NTC also performed well in terms of infrastructure and customer relations measures. These include the cleaning of trams and tramstops, the availability of passenger information, tramstop lighting, CCTV cameras, and passenger help points and the response time to customer comments. However, whilst the number of reported incidents of damage to trams and tramstops has been low, the time taken to repair such incidents has frequently been below target and NTC are seeking to improve contractual arrangements within the operating consortium to address this.

2.3.3 In February, NTC published the results of their first annual customer satisfaction survey, which showed that the vast majority of passengers are very positive about the system; 96% of those questioned were either very satisfied or satisfied and only 1% expressed dissatisfaction. Reliability and punctuality scored highly in the survey alongside information provision and real-time information at tramstops. Among the main improvements that people would like to see are more frequent trams due to overcrowding (the survey was undertaken prior to the introduction of the improved timetable on January 31 st ) and more tram routes. The survey results were made available to the media.

7 Patronage

2.3.4 During the first full year of operations NET carried approximately 8.4 million passengers, which was ahead of projections. Weekday patronage has shown a general upward trend and now averages just below 30,000 passengers a day (compared to 23,000 in June 2004). Passenger levels on Saturdays are similar to those on weekdays with over 12,000 typically travelling on Sundays. Bank Holidays and special events (particularly Goose Fair) have proved popular with additional services being run to cope with demand .

2.3.5 It is fully recognised that some of this patronage has transferred from other public transport modes, particularly the bus, but this was always expected and is very much part of the strategy, which seeks to increase quality and improve choice to keep current public transport users and attract new ones. As the numbers of people wishing to make radial journeys into Nottingham has and continues to increase, it has become increasingly difficult to provide for them with existing services. The Robin Hood Line was overcrowded at its southern end, reducing its effectiveness in providing mobility and regeneration within the coalfield area. Bus services in the corridor have been rationalised, either through agreement or commercial reality. The number of buses accessing Nottingham city centre had reached virtual saturation with conflict for space for stops and priority at junctions while limiting the effectiveness of measures to improve the environment for pedestrians. Providing the high capacity of the tram on this very busy corridor frees up space for wider use of the other modes and from other corridors. Overall public transport use in the corridor NET runs along is therefore up by about 20% in the peaks.

2.3.5.1 Significantly, in addition to expanding the public transport mode, NET has been successful in attracting car users. There are over 3,000 parking spaces at the 5 Park & Ride which attract 5,000 park and ride car trips on weekdays and 4,500 on Saturdays; 30% of tram users have transferred from car directly or use Park & Ride. The combination of the tram and other local transport plan measures has reduced congestion in the corridor, in some parts by as much as 8 to 9%.

2.3.5.2 NET does not operate in isolation to other modes of transport; rather, through the involvement of Nottingham City Transport in tram operations, the co-operation of other operators and the provision of joint ticketing, an integrated transport network fit for the 21 st century is being established in Nottingham. This, and the system’s frequency, reliability and other features have resulted in 99% satisfaction rate among its passengers.

2.3.6 Since the commencement of operations, NTC have experienced problems with the operation of the conductor held ticket machines, particularly in relation to the acceptance of smartcards. Despite many

8 attempts by the equipment supplier to resolve these problems a recent site acceptance test failed and NTC are currently unable to estimate when the machines will be fully functional.

2.3.7 There have been two revisions to the timetable during the first year, both of which increased tram frequencies, the first occurring in September 2004 and the second in February 2005. At the beginning of April, NTC introduced an increase in fares, in line with other local public transport operators. The price of single tickets rose from £1.10 to £1.20 (except for journeys between Royal Centre and Station Street, which rose from 80p to £1.00), the all day ticket rose from £2.00 to £2.20 and the all week ticket rose from £9.00 to £10.00.

2.3.8 NTC have achieved the “Park Mark” award for car park security at Wilkinson Street and Moor Bridge park and ride sites. They are continuing to apply for awards at the remaining 3 sites. Generally, the security record at the park and ride sites has been good, however Phoenix Park has given cause for concern with over 60% of all reported incidents occurring here. The particular locational characteristics of the site are thought to be the main reason for this poor record and NTC are working closely with the Police in attempting to improve the situation.

2.4 Variations to the Concession Agreement

Promoter Variations

2.4.1 There have been no further Promoter Variations initiated under the contract.

2.4.2 Formal issue of the variation associated with Tricornia Drive Retaining Wall and Wilkinson Street Allotments remains outstanding as there has been no movement in respect of BCC’s delay and disruption claim for the construction of the soil nail retaining wall.

2.4.3 Agreement of the value of the City Centre Enhancements variation has been reached with BCC and all payments made to Arrow on the basis of the reduced scope agreed with the contractor. Enhancement paving works adjacent to the No1 Fletcher Gate development that were removed from BCC’s scope were successfully contracted to the developer. LTP funding has been allocated for the minor outstanding works associated with the variation, which will be co-ordinated by the City Council.

Concessionaire Variations

9 2.4.4 A Concessionaire’s Variation was approved in June 2005 to formally agree a number of changes to the Performance Monitoring System (PMS) under the Concession Specification. The changes provide a balanced and fair set of amendments designed to bring overall benefits to the passengers, Promoters, Concessionaire and the Operator, and remove a number of perverse incentives that have been identified in the original documentation during the early stages of NET Line One operations.

Contractor Claims

2.4.5 In July 2004, obligated under the terms of their contract with BCC, Arrow submitted a claim against the Promoters on behalf of their contractor. The basis of the claim was that the Promoters had failed to issue a Promoters Variation Notice for works to Canal Street Bridge (and adjacent structures) which BCC were required to carry out in order to comply with the requirements of the Planning Authority and which BCC considered were outside the scope of the Concession Specification.

2.4.6 In response to the Promoters robust rejection of the claim, Arrow referred the matter to adjudication in October 2004. Arrow sought to recover the additional costs of building the bridge and the loss of availability payments for the period the opening of NET Line One was delayed, allegedly as a result of carrying out works outside the scope of the Concession Specification.

2.4.7 Supported by specialist legal and contract claim consultants, the NET Project Team presented a comprehensive response to the Adjudicator at the end of November. The Adjudicators decision was announced on 23 rd December and, importantly, the key decisions were in the Promoters favour. However, as the Adjudicator found in favour of Arrow on a number of the referred issues, both Arrow and the Promoters submitted Notices of Dissatisfaction in accordance with the requirements of Schedule 11 of the Concession Agreement, leaving the dispute open to further litigation.

2.4.8 BCC, or more accurately Carillon, are continuing to seek reimbursement of their alleged losses, specifically as they relate to costs associated with ‘enhancements to the scope and/or finishes of the works’. The Promoters maintain that such claims cannot be substantiated and currently await confirmation of the Contractors proposed course of action.

2.5 Co-ordination with Other City Council Projects

2.5.1 Development of NET is being carefully co-ordinated with other City Council projects in order to maximise both physical and social

10 regeneration and transport interchange opportunities. A state of the art public transport interchange is proposed at Nottingham Station as part of the Station Masterplan proposals. Close integration between the NET and Masterplan projects is being maintained through co-ordination of project management resources to ensure that both schemes remain highly complementary.

2.5.2 Following a competition through the OJEU procedures Building Design Partnership have been retained to develop the Masterplan design through RIBA development stages C and D to enable a planning application to be submitted for the Station scheme by the end of 2005, for planning permission to be in place by Spring 2006. Network Rail have undertaken comprehensive Station levels surveys which are necessary to progress the detailed design. A business case is being developed, to be compatible with SRA and DfT requirements.

2.5.3 The statutory planning framework for the Masterplan development and NET2 alignment across the Station has now been established. The City Council has agreed statutory Planning Guidance for both the Station and adjacent Meadows Gateway site. These guidance documents complement the Station Conservation Plan previously produced.

2.5.4 Nottingham Regeneration Ltd acting on behalf of Nottingham City Council is actively seeking to bring forward development of the key “Arkwright Triangle” site within the Meadows Gateway area by way of a development competition limited to key landowner/developers. Ultimately Compulsory Purchase Powers may have to be used. The development will be required to safeguard the NET2 alignment.

2.5.5 The City Council has also been working proactively with Nottingham Regeneration Ltd and Network Rail Estates to secure development partnerships for the commercial sites surrounding the Station. Network Rail are now in discussion with potential developers and are prepared to enter into partnerships to ensure that comprehensive development is not prejudiced. Developer contributions negotiated as part of the planning process will be sought to support the Masterplan scheme at the Station as well as essential improvements to the surrounding public realm.

2.5.6 Implementing the highway template to facilitate both the Station scheme and NET2 alignment has now commenced. Work is expected to be completed on the first phase at the junction of Carrington Street, Queens Road, Sheriffs Way and Arkwright Street in the Summer of 2005. The works will considerably improve pedestrian access in the vicinity to both the Station and existing NET stop.

2.5.7 The City Council has commenced work on an Area Action Plan for the Meadows and Southside area under the new Local Development Framework. This will provide an up to date statutory planning

11 framework for the wider area and will reinforce the safeguarding for NET2 alignments. The Area Action Plan will help deliver the “Linking Up The Meadows” project which is a neighbourhood level initiative aimed at improving the environment and service delivery within the Meadows community.

2.5.8 The Broad Marsh development, which will double the size of the existing shopping centre, incorporates a new stop for NET integrated with the proposed bus station. Outline planning permission for the development has been granted. The scheme is the subject of a Compulsory Purchase Order inquiry to be held in October 2005. Subject to the confirmation of this and obtaining planning approval for the details of the scheme, work on the development could commence on site late in 2006.

3.0 LAND ACQUISITION AND COMPENSATION

City Section

3.1 Land Acquisition and Compensation Progress – Annual Report

3.1.1 This year has seen steady progress towards land acquisition settlements and compensation. Claims on 53 plots have been settled out of a total 81, which include payments of compensation to all businesses, which have been relocated.

3.1.2 Approximately £4.5 million has been paid in compensation comprising land taken, advance payments, disturbance, accommodation works and fees, out of a total pre scheme estimated budget of just under £5.3m excluding Part 1 claims and the County Council’s budget. The majority of the outstanding claims are potential significant risk to the budget as there are differences of opinion with the claimants’ assessments of disturbance and these matters may well be referred to the Lands Tribunal for determination with the increased costs associated with this procedure.

3.2 Part 1 Claims (noise, vibration, etc.)

3.2.1 Since the anniversary of the opening of the tram this March a substantial amount of claims have been received which are to date 74% in excess of the original properties identified. The total value of claims to date is approaching 10 times the original budget and fall 80% within the City boundary. This is partly due to the significant rise in house prices since the original estimates were undertaken and the fact that Agents blanket claim whole areas and submit high claims as an initial negotiating position without any evidence or justification.

3.2.2 Claims must be in respect of physical factors emanating from the use of the scheme including noise, dirt, fumes, lighting and vibration and not the construction of the tracks and we are presently undertaking post scheme noise readings to check the validity of the claims. We are aware of some engineering problems which have resulted in some increased disturbance at various locations along the line and engineering solutions are being investigated to mitigate the noise levels including rail grinding and solutions to reduce wheel squeal emanating from the rail/wheel interface as the vehicle negotiates curves.

13 3.3 NET extension

3.3.1 Property Plus have undertaken Property valuation work in connection with lines 2 and 3 including assessing the valuation consequences of slight variations to the route. The budget estimates include land values, statutory Homeless compensation and an estimate of disturbance where business premises are affected. It is difficult to accurately assess the levels of compensation payments as these are based on the Accounts of the business which are only accessible once the premises are included in the CPO scheme and a formal Claim is submitted.

3.4 County Section

3.4.1 Land within Limits of Deviation

3.4.1.1 The Limits of Deviation (LOD) as defined under the original GNRT Act 1994 identified 12 plots of land within the Ashfield District of the County. The land comprises residential and development land adjacent to the Robin Hood Line corridor. Following the formal serving of Notices to Treat and Enter, terms of compensation have been agreed on 4 plots out of 12, at a cost of just over £100k including injurious affection and relevant fees.

3.4.1.2 The negotiations for the land required from two other plots within the LOD are proving to be protracted due the considerable variance in the methods of valuation between the owners and the Promoters. The County Council has taken Counsel’s advice on the matter because of the potential impact on overall costs of the project and will therefore continue to defend the Promoters position at any subsequent Land Tribunal later in the year.

3.4.1.3 Out of the remaining 6 original plots of land, 1 is no longer required and the outstanding 5 plots still remain to be negotiated and agreed.

3.4.2 Land at Baths Lane, Hucknall

3.4.2.1 This land, which was required for the NET Line 1 Hucknall Park and Ride Site, was the subject of a separate confirmed Compulsory Purchase Order. This contained a further 10 plots of land containing various businesses and the Hucknall Household Waste and Recycling Centre which has subsequently been re-sited off Wigwam Lane and is fully operational.

3.4.2.2 The position with these plots is that all relevant land has now been acquired (except for a further Derbyshire Estates plot) at a cost of approximately £1.2m including the costs (less betterment) associated

14 with the replacement Household Waste and Recycling Centre, termination of businesses operating on the site and relevant fees.

3.4.3 Part 1 Claims under LCA 1973

3.4.3.1 Following the first 12 months of operation of the tram, the County Council has received 169 claims for injurious affection to property adjacent to Line 1 in the District of Ashfield. The estimated value of these unsubstantiated claims by pro-active Agents/Surveyors significantly exceeds expectations. The Promoters’ view is that the tram has a positive effect on house prices and it will be necessary for the claimants to evidence the alleged loss.

4.0 PROJECT BUDGET

4.1 NET Line One

4.1.1 Provision for the costs relating to the construction of NET Line One to be borne by the Promoter has been made within the Capital Programme. The latest forecast indicates total estimated expenditure of £25,979,000 for costs relating to a range of items including land acquisitions, use of external consultants, internal fees, specific construction costs etc. Funding is from a variety of sources including Local Transport Plans, Government grants and Concessionaire contributions.

4.1.2 The Annual Report presented last year forecast an overall contingency of £250,000, which it was intended to retain within the project in anticipation of potential additional costs, relating to land acquisitions and contractor claims.

4.1.3 The position at 31 March 2005, detailed in Appendix 1, shows a similar contingency, £243,000. Although construction is now complete, there remain a number of financial commitments, mostly relating to outstanding land acquisitions. Some contracts for specialist advisors have also been extended into 2005/06 to assist with the completion of all documentation associated with the project, and to prepare a defence against any contractor claims received.

4.1.4 It is therefore intended to continue to retain the general contingency within the project in anticipation of potential additional costs, particularly in relation to land acquisitions.

4.2 NET Phase 1 – surplus grant fund

4.2.1 PFI grant payments from the ODPM commenced in 2004/05, and initially exceed the annual payments required to be made to the concessionaire. However, since the surplus grant will be required to meet future increases in availability payments, it was resolved to invest any excess grant monies and credit the investment income to a joint Promoter’s Fund.

4.2.2 Other costs relating to the operation of Line One have also been charged to this Fund, following the approval of the NET Project Board:

a) performance monitoring, £8,800 – the salary costs of an officer appointed to monitor the performance of the concessionaire. Failure to meet agreed monthly performance targets leads to

16 deductions from future availability payments (which are credited to the fund). b) accounting opinion, £13,000 (part) – in order to satisfy external auditors that the capital costs of the scheme were correctly excluded from both Councils’ balance sheets, an external opinion on the accuracy of the accounting treatment was sought and obtained. c) arbitration costs, £324,400 – during the year, the Promoters were obliged to defend an action mounted by the Concessionaire in respect of lost availability payments caused by a delayed start to the scheme (see 2.4 above). The costs of the arbitration have been met from the Fund d) ‘overdraft’ charges, £55,000 – the timing of income and expenditure during the first year of operation led to notional debit charges being applied to the fund.

4.2.3 A summary of the Fund transactions in 2004/05 is shown in Appendix 2, including the 80:20 split between City and County Councils. The balance of the Fund at 31 March 2005 is £7,462,370.

4.2.4 Depending on the future level of the Fund, there may still remain an ‘affordability gap’ to meet availability payments in the later years of the contract. In anticipation of this, the City Council resolved to create its own separate reserve from annual revenue contributions. The balance of this reserve at 31 March 2005 was £1,089,000.

4.3 NET Phase 2

4.3.1 The 2003/04 Annual Report provided details of forecast expenditure to develop Lines 2 and 3, estimated at £7.8m, to be funded from a combination of external grants, the use of both authorities’ Local Transport Plan capital resources and additional Government supported borrowing approvals.

4.3.2 The revised estimate of costs to 31 March 2006 is now £8.78m. The increase largely reflects delays in obtaining programme entry funding approval from the DfT. Appendix 3 details these costs and the various funding sources. All funding is confirmed, with the exception of part of the grant aid, which is subject to the approval of a further application to be made during 2005/06.

4.3.3 In addition to these costs, there are a number of plots along the proposed route for Lines 2 and 3 where advance purchase would be desirable. Some property owners may also require the promoter to purchase their land under statutory blight and compensation provisions, after the submission of the Transport and Works Act Order. There is currently no provision for such acquisitions, and further consideration of the funding of these will be required.

5.0 RETAINED COSTS AND RISKS

5.1 The NET Concession Agreement allocates contractual obligations between the Concessionaire (Arrow) and the Promoters. The Promoters remain responsible for certain project costs and risks, for example land purchase and certain changes in local or national legislation.

5.2 All identified risks are subject to a quarterly review by project officers. Any changed circumstances or new risks identified are properly considered and any recommendations for remedial action or mitigation reported to the NET Project Board.

5.3 As the project has developed a number of risk items have been clarified or have changed as work progresses. The current list of risks is attached as Appendix 4.

5.4 The most significant risks at this stage and a potential threat to the client budget are the cost of land acquisition where claims remain outstanding, the number of “Part 1” claims regarding impacts caused by noise, etc, on property values, and a contractual claim from Arrow. These are areas of risk which still have unknown outcomes and no or limited financial provision.

5.5 A number of compensation claims for disturbance and loss of business have been made against the Promoters relating to NET land acquisitions and it is still too early to assess how successful these claims may be. A significant number of Part 1 claims have been lodged, almost all by a couple of agents representing property owners fronting the line. As yet none of these have been substantiated but it is uncertain if the existing budget allocation is sufficient to meet the eventual outcome, although the overall budget has some contingency allowance.

5.6 The contractual claim from Arrow was for a Promoters Variation to cover costs and extension of time due to alleged change in scope and Highway Authority and Planning Authority requirements. An adjudication concerning part of the claim was held in December 2004 and found in favour of the Promoters but it is unclear if Arrow will wish to pursue the claim to further adjudication or court proceedings. This would be a lengthy and costly process.

6.0 NETWORK DEVELOPMENT

6.1 Scheme Development and Transport and Works Act Order (TWAO)

6.1.1 Building on the success of Line One, NET Phase 2 is fundamental to the transport strategy for the Greater Nottingham conurbation. The Chilwell via Beeston and QMC route will bring very significant benefits by serving a number of important destinations including the ng2 development site, University of Nottingham, Queens Medical Centre, Beeston town centre and Chilwell. The Clifton via Wilford route serves a number of densely populated residential areas including the Meadows, Wilford and Clifton. Both routes terminate at park and ride sites serving the M1.

6.1.2 .Scheme Development and Transport and Works Act Order (TWAO)

6.1.3 The alignments for both routes were approved in principle by the City and County Councils in summer 2004. This is in advance of a final approval by both Authorities to submit the Transport and Works Act Order, which is expected later in 2005.

6.1.4 Some refinement of the route alignments has taken place following further design work. A revised alignment has been proposed at Kings Meadow which will involve a new tram only bridge over the Midland Main Line. This will avoid impacts on a local nature reserve and expensive utility diversions on the existing bridge. At the University of Nottingham extensive assessments of noise and vibration impacts and junction layouts have been undertaken to assist in determining the best route option between Science Road and University Boulevard.

6.1.5 Considerable progress has been made on preparing the documentation for a TWAO application. This has included a draft Order and associated schedules, a book of reference determining land ownerships, and works and land and planning direction plans. The draft Environmental Statement for the Project is approaching completion and the preparation of the Transport Assessment and Urban Design Guide are also well advanced.

6.1.6 Discussions have continued with interested parties, including residents and businesses along the proposed routes, the District Councils, local bus operators, Network Rail, Highways Agency and environmental groups such as English Nature and English Heritage. These discussions are invaluable for the continuing development of the project and will continue through to project implementation.

6.2 Government Funding application

6.2.1 With a background of reductions in government transport funding availability Programme entry funding approval has yet to be received from DfT. A considerable number of meetings have been held with DfT officials and additional information has been provided to assist the DfT decision making process. DfT have continued to confirm that the scheme appraisal meets DfT funding criteria and during meetings during the 2 nd quarter of 2005 indicated that Ministerial approval would be sought during summer 2005.

6.3 Procurement

6.3.1 Following a comprehensive review of procurement options a preferred option to follow an early developer involvement procurement strategy has been proposed to the DfT. Discussions are ongoing.

6.4 Programme

6.4.1 The table below summarises the current programme for NET Phase 2.

Submit Transport and Works Act application * Autumn 2005 Public Inquiry Summer 2006 Contracts let and works commence on site Autumn 2008 Service commence operation Autumn 2011

*Subject to receipt of Government Programme entry approval.

7.0 PUBLIC RELATIONS

7.1 Public Relations NET Line One

7.1.1 Trams began running a service from March 9 th 2004 and much of the publicity responsibility has been passed to the marketing section of Nottingham Tram Consortium. Some activity remains with the Promoters’ communications team as outlined below.

7.1.2 Positive local media coverage continued post-launch, including items relating to customer satisfaction survey, boosting Hucknall’s tourism and development potential, NET playing a part in Nottingham holding onto its 5 th place in the retail destinations league, links to station masterplan and other wider development benefits, Respect for Transport issues, good patronage figures. Many letters in the Evening Post praise the system. Extra services and fares are respectively welcomed and accepted without criticism. Other service improvements such as double-sided passenger information displays, on-board CCTV, extra on-board poles etc were greeted positively by public and media.

7.1.3 Opportunities for national and trade press coverage were pursued with resultant positive coverage mainly in specialist press.

7.1.4 Some local media coverage was not so positive. A crew strike and an accident at Christmas, noise on Noel Street and some negative letters in the Evening Post are examples.

7.1.5 A series of Just the Ticket promotions were run, through the Big Wheel campaign, in the Nottingham Evening Post.

7.1.6 The website overhaul is completed and left as an archive site for background information on the development of the system and a portal to NTC’s site and the Phase Two site.

7.1.7 The first anniversary presented opportunities for more positive media coverage, including NTC’s Red Nose Day fundraising activities, special supplements in the Evening Post and Topper newspapers and features in other publications, broadcast media and national and trade press. NET also presented its case to the House of Commons Transport Select Committee inquiry into UK tram systems on Line One’s first anniversary, prompting further media coverage.

7.1.8 Line One won the Municipal Journal Public Private Partnership Achievement of the Year Award and Labour Party PPP award. NET

21 also played a part in Nottingham being highly commended in the National Transport Awards Transport Authority of the Year category.

7.1.9 Promotional and Progress videos are both completed.

7.1.10 A range of visits have been hosted, including Transport Authority of the Year judges, and visitors from London, Norway, Swansea, China, Birmingham and Brazil, plus the Transcite conference organised by Transdev.

7.1.11 A number of presentations have been given, including to the Nottingham Ambassadors, and various local clubs and organisations

7.2 Public Relations Phase 2 7.2.1 Some lobbying-type features have been taken out in parliamentary publications.

7.2.2 Local media coverage has been mixed, with the success of Line One muting some of the anti-tram sentiments but not drowning it out altogether. Stories and letters are generally negative, despite local media organisations generally supporting NET and its expansion. Trade press continue to question the delay in approval.

7.2.3 Line One’s first anniversary provided opportunity to lay out arguments in favour of expansion across a range of media.

7.2.4 Further delay in the process during the national and County Council elections was covered by local and trade media.

7.2.5 There has been some updating of the website but more development is still to take place.

7.2.6 NET was involved in a BBC Groundswell debate on Phase Two broadcast on Radio Nottingham.

8.0 PROJECT AUDIT AND INSPECTION

8.1 It is a requirement of the PFI contract that the performance of NET is monitored to enable the Promoters to validate the levels of the Concessionaire’s monthly claims for availability payments. The Performance Monitoring System (PMS) has been established to allow this validation to take place.

8.2 The Concessionaire is paid a pre-determined amount every month by the Promoters, as set down in the Concession Agreement (the availability payment). At the end of each month, the Concessionaire is required to submit a report to the Promoters with a claimed level of actual performance. An audit of the figures presented in the report and of the data lying behind them is then undertaken by the Promoters at the Depot, where NTC’s records are held.

8.3 There are 25 separate performance measures, relating to operational and infrastructure elements, for which targets are set; deductions are made if these targets are not achieved. The performance measures include reliability and punctuality of services against the timetable, cleanliness and repair of damage to trams and tramstops, availability of passenger information and CCTV, ride quality and interior noise, response to customer comments and the production of a customer satisfaction survey. 85% of the payment is based upon operational reliability and punctuality.

8.4 An internal audit of the PMS was undertaken by the City Council Audit Services in 2004. The audit report concluded that a well documented standard has been established for the monthly performance review. The audit included an examination of the integrity of the reliability and punctuality data derived from the Ebiscreen system (the computer software used by the Operator to monitor tram movements) and this was found to be controlled in a systematic way by comparison of the information with the operational data.

23 NET CLIENT / PROJECT MANAGEMENT COSTS - ESTIMATED RESOURCES AND EXPENDITURE Appendix 1 DETAIL Actual Actual Actual Actual Actual Actual GRAND Resources 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 TOTAL City Council £ £ £ £ £ £ £ £ GNRT balance 0 0 0 268,066 . 0 0 0 268,066 Local Transport Plan - basic 400,000 400,000 400,000 400,000 400,000 0 0 2,000,000 - W. Blvd./ Middle Hill 0 0 50,000 150,000 . 0 0 0 200,000 - Signage 0 0 0 0 0 0 0 0 Cap. Prog. - corp. priorities 100,000 0 0 0 0 0 0 100,000 - excess land 0 0 323,289 0 954,711 0 900,000 2,178,000 - Collin Street 0 0 0 2,017,928 1,570,723 1,198,967 512,382 5,300,000 - land 0 0 0 0 0 0 500,000 500,000 Arrow grant - SCA 0 800,000 800,000 800,000 . 0 0 0 2,400,000 ERDF grant 0 788,848 1,461,152 250,000 . 0 0 0 2,500,000 Revenue contribution 500,000 500,000 500,000 0 0 0 0 1,500,000 Interest received 0 196,820 195,958 48,795 . 2,087 0 0 443,660 County Council Local Transport Plan - SCA 130,000 80,000 90,000 100,000 . 100,000 0 0 500,000 Arrow grant - SCA 0 200,000 200,000 200,000 . 0 0 0 600,000 Excess land 0 0 0 0 0 0 544,000 544,000 Arrow Land contribution 0 4,694,000 0 0 0 0 0 4,694,000 Promoters client costs 0 166,662 333,324 333,324 . 416,690 0 0 1,250,000 TRO fees etc. 0 580,558 369,446 0 0 0 0 950,004 Buildings fixings 0 51,500 0 0 0 0 0 51,500 TOTAL RESOURCES 1,130,000 8,458,388 4,723,169 4,568,113 3,444,211 1,198,967 2,456,382 25,979,230 Expenditure £ £ £ £ £ £ £ £ City Council GNRT - funding 790,000 691,365 138,463 0 0 0 0 1,619,828 Specialist fees 0 0 432,739 525,407 398,526 209,923 78,870 1,645,465 Administration 143,387 180,813 317,545 260,867 232,408 4,320 50,000 1,189,340 External consultants 35,650 38,145 0 1,500 0 24,275 25,725 125,295 Internal fees 3,447 153,271 305,465 482,673 428,803 62,955 18,580 1,455,194 Traders' assistance 0 28,283 88,409 81,690 62,975 41,469 0 302,826 Land costs (inc. Part 1) 133,146 983,778 238,871 1,283,772 1,135,715 617,531 1,773,187 6,166,000 Interest payments 0 4,389 0 62,150 236,258 105,451 35,412 443,660 Collin Street viaduct 0 1,697,223 2,328,460 597,873 683,955 0 8,489 5,316,000 Middle Hill sub-station 0 0 26,000 88,195 108,097 0 0 222,292 Western Boulevard stop 0 0 40,000 109,469 0 0 0 149,469 Signage 0 0 0 0 0 5,127 0 5,127 ERDF-related work 0 1,262,915 1,237,085 0 0 0 0 2,500,000 Excess Railtrack costs 0 0 0 0 0 42,650 0 42,650 Buildings fixings 0 0 0 8,690 40,996 5,643 5,357 60,686 Arrow grant 0 1,000,000 1,000,000 1,000,000 0 0 0 3,000,000 County Council Land costs 0 0 1,012,708 65,827 116,477 81,623 215,365 1,492,000 Contingency 0 0 0 0 0 0 243,398 243,398 TOTAL EXPENDITURE 1,105,630 6,040,182 7,165,745 4,568,113 3,444,211 1,200,967 2,454,383 25,979,230 24 APPENDIX 2 NET LINE ONE JOINT FUND SUMMARY OF TRANSACTIONS 2004/05

COUNTY JOINT CITY (80%) (20%) £ £ £

PFI grant 28,577,815.20 22,862,252.16 5,715,563.04

- - Availability payments 20,826,193.00 16,660,954.40 -4,165,238.60

Performance penalties 56,086.47 44,869.18 11,217.29

Interest - investments 55,231.34 44,185.07 11,046.27 - deposit account 584.26 467.41 116.85 - 'overdraft' charges -55,029.64 -44,023.71 -11,005.93

Other charges - monitoring officer salary costs -8,765.60 -7,012.48 -1,753.12 - FRS 5 costs (part) -13,000.00 -10,400.00 -2,600.00 - arbitration costs (various) -324,359.08 -259,487.26 -64,871.82

BALANCE AT 31/03/05 7,462,369.95 5,969,895.96 1,492,473.99

represented by:

Investments - £5m (Bank of Scotland) 5,000,000.00 4,000,000.00 1,000,000.00 - £1.5m (Close Brothers) 1,500,000.00 1,200,000.00 300,000.00 Deposit account balance 102,044.99 81,635.99 20,409.00 VAT debtor 860,324.96 688,259.97 172,064.99

7,462,369.95 5,969,895.96 1,492,473.99

NET PHASE TWO - DEVELOPMENT COSTS APPENDIX 3

ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL EST. EXPENDITURE 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 TOTAL

£ £ £ £ £ £ £

City Council staff fees 22,932 127,995 185,330 215,192 154,002 150,000 855,452

External Consultants etc. 10,200 604,797 1,483,326 1,692,356 1,659,491 2,026,000 7,476,170

Direct costs 0 56,372 71,666 50,392 42,291 230,000 450,721

TOTAL EXPENDITURE 33,132 789,164 1,740,322 1,957,940 1,855,784 2,406,000 8,782,342

RESOURCES

City Council contributions 33,132 637,068 1,060,508 200,000 400,000 581,613 2,912,321

County Council contributions 0 0 586,013 400,000 410,000 215,000 1,611,013

DfT funding 0 0 0 1,211,000 613 1,209,387 2,421,000

ERDF grant 0 0 119,408 73,429 845,171 0 1,038,008

EMDA grant 0 0 0 200,000 200,000 400,000 800,000

TOTAL INCOME 33,132 637,068 1,765,929 2,084,429 1,855,784 2,406,000 8,782,343

26 NET LINE 1 CONCESSION AGREEMENT - PROMOTERS’ RETAINED COSTS AND RISKS APPENDIX 4 C A B Event Description Relief/Compensat ion Cost impact Likelihood Mitigation Measures Review A Very Low = £100s Low = £1,000s-£10,000s Moderate = £100,000s High = £1,000,000s Very High = £100,000,000s B Likelihood: Highly Remote = Nil/Negligible Remote = less than 1% Very Low = 1% to 5% Low = 5% to 10% Moderate = 10% to 50% High = greater than 50% C Where used the clause number refers to Concession Agreement and for cross reference to Promoters’ obligations listed in PEP Appendix 5

1. Promoter initiated TRO Temporary PMS relief Low Low Manage impact on NET Potential for tram delay Highways or temporary TRO or or permanent PMS Nil for PMS. Few events (average 4 operations through a (or opportunity for 1 2 Change reconfiguration of traffic recalculation. Estimate £4k/day for temp. TROs./year) Highways working greater tram priority) Cl. 37 signals within approx. Farebox compensation temp. events. No record of signal group, which would be due to traffic signal 200m of route leading for on-line impacts after Permanent changes reconfigurations but a development of the changes associated to tram blockage or 3 days. may include modest these and any working group with the proposed City delay. Beneficial changes additional cost for permanent TRO established during Centre Major (‘Turning offset adverse changes. mitigation measures. changes are entirely construction Point’). Clear Zone within Promoters review introduced with control. no adverse effects. The Old Market Square scheme and the Broadmarsh development have potential for a claim.

2. Temporary closure of PMS relief. Low to nil Very Low and Management of event NET Highway Manager Public Old Market Square for a Farebox compensation Nil for PMS. discretionary through awareness of liaises with events group. Events public event (e.g. for “unplanned” events Estimate up to £4k per Events within NET requirements A number of recent events Cl 47.1 switching on Xmas (up to 9 “planned” unplanned event. Promoters’ control. have created confused lights) events allowed per Unlikely to exceed situation (e.g. B Clough 3 year). “planned” event cap. memorial). Consideration being given to greater use of Temporary TROs for events to provide more certainty over impact and PMS relief.

1 Revenue approx. £7m per year, therefore theoretical maximum loss of £20k/day. Short duration events unlikely to have more than a very marginal impact on patronage. Blocked route, mitigated by running trams either side or using substitute buses, may reduce patronage by 25%; hindrance (slowing down) of tram would have less effect, say 10%. Assume loss is £4k/day. Permanent changes could be designed to have minimal impact on tram business and any beneficial changes are netted off the adverse impacts. 2 5 year record – 20 temporary TROs: 9 – PMS relief only; 6 – works could be managed to avoid any impact, 5 planned Public Events 3 Only two events/year in last 5 years – can therefore accommodate an additional 7events/year. E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 27 Schedule Updated July 2005

NET LINE 1 CONCESSION AGREEMENT - PROMOTERS’ RETAINED COSTS AND RISKS APPENDIX 4 C A B Event Description Relief/Compensat ion Cost impact Likelihood Mitigation Measures Review A Very Low = £100s Low = £1,000s-£10,000s Moderate = £100,000s High = £1,000,000s Very High = £100,000,000s B Likelihood: Highly Remote = Nil/Negligible Remote = less than 1% Very Low = 1% to 5% Low = 5% to 10% Moderate = 10% to 50% High = greater than 50% C Where used the clause number refers to Concession Agreement and for cross reference to Promoters’ obligations listed in PEP Appendix 5 3. Promoters do not The Concessionaire Very Low Low Internal process to be Hand-back arrangements Goose Fair vacate the Forest after would claim lost Revenue loss at P+R Promoters (City Leisure agreed within between L&CS and Cl. 48.3 10 days or do not make revenue from Park & estimated at £1.5k per Dept.) to manage the Promoters organisation Arrow/NTC satisfactory. good any damage Ride users and any cost day, with maximum loss temporary occupancy of L&CS wish to extend caused during Goose to make good any of availability being say the site for the Fair. Goose Fair by 1 day for Fair damage 2 days plus making 2005 – still within 10 day good at say £2k giving concession provision. maximum cost of £5k L&CS concerned about per year loss of parking for other events . 4. Any costs under the Direct obligation on Low - High Low Management of Railtrack No problems were Railtrack Railtrack Agreements Promoters Increased scope Significant design work interface through regular identified relating to costs not transferred to the directly attributable to has been undertaken liaison meetings in order Railtrack /Network Rail Cl. 14 & Concessionaire. NET being in the and the likelihood of to predict and manage change. Railtrack corridor [e.g additional increased scope should issues arising BCC made a significant Agg’ts. signalling requirements] therefore be minimised. claim on Network Rail for Negotiations have additional costs. Risk lies reduced this risk such with contractor. Land compensation and that only a national Network Rail has minor change in railway safety contested who pays for administration/monitorin requirements, additional signalling staff g costs introduced during the (action, if any, with Development Period, Network Rail) and the could impact on the continued use of the Promoters Basford Chemical Works crossing (to be raised with Network Rails solicitors). The Facility Ownership Agreement has been executed by both Councils and Network Rail. 5. Uncontrollable Direct obligation on Moderate to High Very Low Design interface and Testing has not identified Nottingham emissions from tram Promoters but the Worst case – Expert opinion is that design to appropriate any problems. Final tests Station EMI, electrical systems Concessionaire to test replacement signalling risk is low. standards will be have been undertaken and etc. cause interference to early and design to for whole station (£6m) (RT may replace crucial. The BCC have sought close Cl. 14 RT signals. international standards. signalling to meet Concessionaire’s out from Network Rail. modern standards) quality control to be closely monitored E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 28 Schedule Updated July 2005

7. Defined, rare events, Availability payments Nil if RSG continues Remote No mitigation measures No events Force such as war, rebellion, continue during a force Assuming RSG can be taken. If an Majeure nuclear explosion, etc. majeure event even continues, payments event occurs the relief (short term) though no trams may can be made at no or compensation will be Cl 90.1 be running additional cost to as determined in the Promoters. Concession Agreement 8. Events impact on Delay or failure to meet Nil Low No mitigation measures No events Protester Concessionaires’ ability PMS will not result in can be taken by the Action, to construct or operate Termination. Promoters. The physical the system Concessionaire has a damage, duty to provide security strikes of works during Sch 10 construction to guard against events that could limit the works.

E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 29 Schedule Updated July 2005

NET LINE 1 CONCESSION AGREEMENT - PROMOTERS’ RETAINED COSTS AND RISKS APPENDIX 4 C A B Event Description Relief/Compensat ion Cost impact Likelihood Mitigation Measures Review A Very Low = £100s Low = £1,000s-£10,000s Moderate = £100,000s High = £1,000,000s Very High = £100,000,000s B Likelihood: Highly Remote = Nil/Negligible Remote = less than 1% Very Low = 1% to 5% Low = 5% to 10% Moderate = 10% to 50% High = greater than 50% C Where used the clause number refers to Concession Agreement and for cross reference to Promoters’ obligations listed in PEP Appendix 5 9. Rateable value and Promoters pay an Low to nil Moderate Lobbying of relevant Business Rates review Business rates paid are higher annual amount Operators are lobbying authorities by being undertaken - our Rates than expected. (indexed) equal to the Govt to reduce the PTEG/Promoters/LRT position supported by Cl. 34.12 excess of the initial rate current rate and basis operators should specialist rating amount over £178k of calculation therefore continue in an attempt consultants. continued pressure to reduce rates Update and advice on should result in a very 2005 rating review low cost risk to the being sought. Promoters 10. Limited to the Promoters compensate Very High Highly Remote Internal process of n/a Promoter Promoters not making a the Concessionaire with Cost would include all Promoters’ must ensure assessment, approval 4 default substantial due Lenders’ Amount plus the capital development control mechanisms and payment to be during payment or the redundancy and costs as well as avoid the risk of developed. Develop’t Promoters’ obligations termination costs plus compensation to the payment default. The Period, being transferred to expected return on Concessionaire’s other defaults are leading to another entity without equity plus loss of profit sponsors – estimated to wholly improbable. Termination the necessary for construction be £200m or over at a Cl 16.3, safeguards or the contractor and operator maximum, depending 17.1, 17.2, project assets being (capped) minus the upon when, in the 53, 56, 57, sequestered, etc Concessionaire’s cash construction process, etc. without compensation balances/receivables at the termination event or the Concessionaire’s the time of termination. occurred, but, in any material rights or case, highly unlikely to obligations being occur rendered illegal or impossible by a change in law.

4 The outstanding debt to the Lenders E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 30 Schedule Updated July 2005

12. Extension too large to As above, but with more Very Hig h Moderate but Selection and tender Consideration is being Network constitute a Variation limited allowance for As above, but the cost discretionary process will have to given to procurement Extension and the Concessionaire lost operator profit. of compensating the Although there is a high make clear the options for Network leading to does not win the tender. Concessionaire should expectation of a requirements for and Extensions so as to avoid Termination A new concessionaire be covered by a capital Network Extension, level of compensation or minimise termination Cl. 53, 57, builds the extension payment from the compensation will only to the Concessionaire costs. etc. and operates the whole incoming follow if the should the Concession system. Concessionaire as a Concessionaire is be terminated price for effectively terminated. buying the Line 1 5 Concession

5 The winning tenderer must have valued the concession higher than The Concessionaire. The new concessionaires will have to provide finance to (a) compensate The Concessionaire and (b) pay for the extension. The Promoters will use the existing RSG to meet payments under (a) and must find new funds to meet (b). E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 31 Schedule Updated July 2005

NET LINE 1 CONCESSION AGREEMENT - PROMOTERS’ RETAINED COSTS AND RISKS APPENDIX 4 C A B Event Description Relief/Compensat ion Cost impact Likelihood Mitigation Measures Review A Very Low = £100s Low = £1,000s-£10,000s Moderate = £100,000s High = £1,000,000s Very High = £100,000,000s B Likelihood: Highly Remote = Nil/Negligible Remote = less than 1% Very Low = 1% to 5% Low = 5% to 10% Moderate = 10% to 50% High = greater than 50% C Where used the clause number refers to Concession Agreement and for cross reference to Promoters’ obligations listed in PEP Appendix 5 13. Assertion of land rights, Promoters pay Lenders’ Very High Very Low t o Remote No mitigating measures No claims or No fault discovery of fossils, etc Amount plus equity and Costs estimated –could Considerable work has but surveys undertaken discoveries. Termination which make junior debt, less interest be £200m or higher, been done to provide by the Promoters during Cl 58, 6.8.1, construction and dividends paid out, depending upon the land disclosures and an development should 73 impracticable; risks that plus redundancy and timing of the termination indemnity has been limit the impact. Effects become uninsurable or termination costs less event, but highly provided in this respect of “Assertion of land a long-term force cash balances. unlikely to occur. from Railtrack. The rights” to be managed majeure event. other risks are remote. through the Statutory If the termination results processes from assertion of land rights, compensation is In case of insurance calculated slightly unavailability, differently; interest and Promoters could dividends will not be provide insurance cover deducted. to avoid termination. 14. Termination may result Promoters pay Lenders High Remote Promoters would n/a Termination if corrupt gifts are made amount less cash Promoter should be Promoters may chose investigate possibility of for Corrupt by a senior employee of balances able to recoup costs to take action short of alternative action, such gifts the Concessionaire to through re-tendering the termination as requesting that Cl.53, 55 the Promoters concession. offender be removed Compensation will from the depend upon the timing Concessionaire’s of the termination event. Project Team In the Concessionaire’s base case, the maximum debt outstanding is approx £190 million.

E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 32 Schedule Updated July 2005

NET LINE 1 CONCESSION AGREEMENT - PROMOTERS’ RETAINED COSTS AND RISKS APPENDIX 4 C A B Event Description Relief/Compensat ion Cost impact Likelihood Mitigation Measures Review A Very Low = £100s Low = £1,000s-£10,000s Moderate = £100,000s High = £1,000,000s Very High = £100,000,000s B Likelihood: Highly Remote = Nil/Negligible Remote = less than 1% Very Low = 1% to 5% Low = 5% to 10% Moderate = 10% to 50% High = greater than 50% C Where used the clause number refers to Concession Agreement and for cross reference to Promoters’ obligations listed in PEP Appendix 5 15. The Concessionaire is Promoters pay market Low Very Low Selection and tender n/a Concession- involuntarily wound up value on re-tendering or Promoter should be process will have to aire default or liquidated; does not estimated fair value. able to recoup costs make clear the leading to start, abandons or does through re-tendering the requirements for and Termination not complete the works concession – costs level of compensation Cl. 53, 54, within contracted time estimated at between, to the Concessionaire 59, etc. periods; performs below theoretically almost a certain level (PMS zero (scrap value) to termination points); £200m does not make a substantial due payment; or has its consent to operate revoked. 16. Assertion of land rights, Costs fall to the Moderate to High Low No mitigating measures Variation to build a Non discovery of fossils, etc Promoters, but the Delay to the but surveys undertaken retaining wall where land discretionary which require a Concessionaire must Concessionaire by the Promoters during (garden extension) is Variations Variation to enable the adopt a ‘work round’ programme requiring development should unavailable at Tricornia Cl 6.8.1, 68 system to be built (and bear cost of this) Long Stop date to be limit impact. “Assertion Drive, Cinderhill (£58k) to avoid need for extended. Potential of land rights” to be and to remove from the variation. extension of six months managed through scope an access road at could be experienced. Statutory processes Whitemoor allotments off Wilkinson Street (saving £7k). Unsubstantiated claim from BCC for delay cost for Tricornia Drive being resisted . 17. The services become Increased cost would High Highly Remote Lobbying of n/a VAT an exempt supply such fall to the Promoters. Compensation would Government by LRT Cl. 79.12 that the Concessionaire equate to the rate of operators and is unable to recover VAT levied on the Promoters in the event VAT. No compensation Availability Payments that UK LRT systems is given if VAT rate from the Promoter to become non-VAT 6 changes the Concessionaire. recoverable

6 Unless the change constitutes a Discriminatory Change in Law E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 33 Schedule Updated July 2005

Although, on the basis of Arrow claim for a the adjudication, Arrow’s Promoters Variation to position is poor, they may cover costs and extension continue with the claim of time due to alleged (court) or proceed with change in scope and HA other areas of claim. or PA requirements, etc. Awaiting further action by Adjudication (Dec 2004) BCC before considering found in favour of Promoter response. Promoters but decision not clear. Both parties Management of this risk have issued a Notice of area must form a crucial Dissatisfaction. part of any Phase 2 ← negotiations.

7 Variations may include very minor changes requested by the Promoters during construction or more significant changes such as a new stop or a realignment to accommodate a new development or even a modest extension to the route. E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 34 Schedule Updated July 2005

NET LINE 1 CONCESSION AGREEMENT - PROMOTERS’ RETAINED COSTS AND RISKS APPENDIX 4 C A B Event Description Relief/Compensat ion Cost impact Likelihood Mitigation Measures Review A Very Low = £100s Low = £1,000s-£10,000s Moderate = £100,000s High = £1,000,000s Very High = £100,000,000s B Likelihood: Highly Remote = Nil/Negligible Remote = less than 1% Very Low = 1% to 5% Low = 5% to 10% Moderate = 10% to 50% High = greater than 50% C Where used the clause number refers to Concession Agreement and for cross reference to Promoters’ obligations listed in PEP Appendix 5 18a Promoters wish to as Promoter Variation Low to High High Implement as much Initial indications are that Broadmars introduce Broadmarsh (City meet full costs) Main cost likely to be as a Broadmarsh is a priority flexibility as possible in run-time is very tight. h tramstop stop result of increased run development for the the operating timetable. Minor additions to scope Cl. 16, 68 time leading to risk of City agreed as non- performance penalties and consequential change. loss of patronage Commercial arrangement to accommodate an additional stop is yet to be considered. 18b The Concessionaire The Concessionaire must Nil to Moderate Nil to Moderate Change control process to Conductors Variation Concessionair wishes to introduce a seek Promoters’ consent Any contribution by Risk to Promoters assess variations for cost agreed. Involves increase e Variation change to the concession (at the Promoters’ Promoters is unlikely in most cases. and other impact either in Operator fee, which has Cl. 68.14 specification absolute discretion). discretionary but may directly or via NCT minor impact (approx. be pass through to City 0.1%) on Promoters’ costs via NCT. in event of termination for Promoter Default or Network Extension. Increase in NCT payout in event of performance default underwritten by City. A Variation has been made to amend parts of the PMS to clarify interpretation and provide clearer incentives 19. Land acquisition costs Direct obligation on Moderate to High Low to Moderate Land acquisition process Additional land cost risk Land cost exceed estimates Promoters who will Current estimate for must be administered associated with certain increase have to meet the costs Land and Land through the Statutory key sites. Final claims yet Cl. 6.2, 6.3 in full. Compensation is processes. to be made. £7.4m.

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8 Concession Specification requirement to develop the design, working practices and programme for the works and implement such as to limit as far as is reasonably practicable the potential for claims against the Promoters arising from third party interests in land. E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 36 Schedule Updated July 2005

NET LINE 1 CONCESSION AGREEMENT - PROMOTERS’ RETAINED COSTS AND RISKS APPENDIX 4 C A B Event Description Relief/Compensat ion Cost impact Likelihood Mitigation Measures Review A Very Low = £100s Low = £1,000s-£10,000s Moderate = £100,000s High = £1,000,000s Very High = £100,000,000s B Likelihood: Highly Remote = Nil/Negligible Remote = less than 1% Very Low = 1% to 5% Low = 5% to 10% Moderate = 10% to 50% High = greater than 50% C Where used the clause number refers to Concession Agreement and for cross reference to Promoters’ obligations listed in PEP Appendix 5 22. Human remains are Cost of a specialist Low to Very Low Low Initial survey work None Exhumation found during the works contractor to be met by Short duration Relatively shallow should have minimised Cl. 29 and exhumation work is the Promoters professional fees, cost excavations unlikely to the potential impact, required of contractor plus delay disturb remains. however in Sheffield to construction works. unrecorded graveyards Cost will relate to the were discovered under size of graveyard the construction encountered 23. Discovery makes Cost of Variation to be High to Very High Highly Remote No mitigating measures None Fossils and construction met by the Promoters. Highly unlikely that any but surveys undertaken Antiquities impracticable within the For No Fault discovered articles were by the Promoters during Cl 28 land available, thus Termination see above. of such importance as development should requiring a Variation or, not be recorded and limit the impact. ultimately, a No Fault covered over or Termination removed. 24. (i) Cost of obtaining (i) Promoters meet cost Low to Moderate Low Management of the Late OHLE design, OHLE agreements with property over the (i) Current budget is for Costs substantially process is key, frequent design changes Building owners exceeds estimates. Concessionaire’s £100,000. above the estimate are “consideration” to and problems with pole Fixings (ii) Failure to obtain contribution of £51,500 (ii) No financial cost unlikely building owners low but foundations (presence of Cl. 25 agreements. (ii) The Concessionaire legal fees can escalate if cellars) has limited the provides a pole but the not controlled number of building fixing Promoters do not meet agreements achieved . visual aspirations Similar problems with Street Lighting fixings. 25. Addition of NET to Promoters will have to Moderate High Continuing review of Adjustments will be Concession- Concessionary Fares consider overall Depends on offset Increase in overall Concessionary needed to reflect ary Fares scheme may take expenditure for all between NET and Concessionary Fares Fares Scheme or introduction of the Cl. 39 expenditure above current operators in the buses plus generated expenditure is an Government assistance national scheme and budgets scheme. Requirement trips, but NET impact is inevitable result of may be linked to any any local policy is limited to treating the likely to be a small increasing public nationally implemented changes including the Concessionaire equally proportion of overall transport use scheme extension of the city with other operators expenditure scheme to Hucknall to provide consistency between bus and tram (not considered a project specific cost).

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parties as Schedule 5 DOCUM’TS\RETAIN.DOC and \NORETAIN.DOC 27. Legislative change Risk is shared Low to High Moderate to High C of L by definition Advice sought from Change of leaves the depending on the Possible events are Promoters can seek cannot be accurately Counsel as to any change 9 10 Law Concessionaire less nature of the change. listed separately funding assistance predicted. Many effects of law implications from Cl. 79 able to meet its through Local Transport of C of L can be the Roe case concludes obligations to the Plan, etc. managed during that there has been a Promoters and to its The cost to the development with the relevant change of law but Lenders and promoters will be Concessionaire that, as the Court of shareholders. dependent on the basis required to provide a Appeal decision relaxed of sharing risk defined system that meets the standard by which rail in the contract. current standards. ‘level’ is to be judged, the Implications facing change gives rise to no operators as a result of recoverable loss under recent incidents are a Clause 79. real threat and management of their impact will be essential. Government funding would be sought in the first instance for all Change of Law cases.

9 Complex arrangement of caps – see separate sheets 10 See file: S\NET\AGREEMTS\DOCUM’TS\PRRISKS1.DOC E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 38 Schedule Updated July 2005

(ii) Bus patronage reduces

due to congestion during (ii) Loss of revenue to (ii) Low (ii) Moderate

works. NCT (ii) Good management

(iii) Operational problems of works and (ii) NCT involved in for Tram or Feeder Buses (iii) Affects profitability (iii) Moderate to High (iii) Low information to bus works planning and of NCT passengers needed. publicity. (iii) NCT/NTC to

manage their role. Council support through Highway role. 29. Financial assistance Promoters (City only) Low to Moderate Low to Moderate Careful attention to Financial assistance Hyson package for loss of trade meet full costs Maximum payment working practices and scheme closed 24/07/04 Green during construction £1,200,000 (indexed); temporary TM with expenditure under Traders exceeds funds available funds available £600,000. measures. £300,000

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APPENDIX 4

PROMOTERS’ RETAINED RESPONSIBILITIES 11 UNDER THIRD PARTY AGREEMENTS & UNDERTAKINGS CONCESSION AGREEMENT SCHEDULE 5 AGREEMENT/ CLAUSE RESPONSIBILITY / LIABILITY ACTION UNDERTAKING RETAINE D Debenhams 7(c) Compensation for reasonable costs for cleansing, Included in OHLE agreement. closed redecoration, maintenance and repair attributable to the fixing of OHLE apparatus to the building 11(a) Not to prejudice the right of Debenhams to claim n/a closed compensation under the provisions of the Act 12 5(a) Debenhams to be invited to join the area liaison group Included in City liaison group closed ASDA 5 ASDA to be invited to join the area liaison group Included in Hyson Green liaison group closed Pedals 2 Insertion of rubber inserts or similar devises for the DfT/EPSRC FIT Integrating Bikes and closed benefit and safety of cyclists LRT Research Project has investigated the use flexible flangeway fillers and concluded that a suitable product has not been developed and considerable technical barriers remain. 4 Pedals to be invited to be represented on GNLRT Pedals are represented closed Advisory Cttee. 5 Pedals to be invited to be represented on area liaison Included in City, Arboretum and closed groups Hyson Green groups British Coal All s106 Agreement for Babbington colliery site – transfer Land acquisition for P&R Corporation of land for NET line and Park & Ride site completed. No claims yet received for land along Millenium Way. Owners wished to defer completion until after tram operating . Chartwell Land 1(d) Terms as to payment for provision of temporary work Land acquisition still to be finalised . Developments site

11 See also NET\AGREEMTS\DOCUM’TS\NORETAIN.DOC for Concessionaire’s Responsibilities 12 &

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3 Relaxation of LODs Awaiting final land deal 4 Not to prejudice the right of Chartwell to claim n/a closed compensation under statutory provisions or common law 13 7(a) Arbitration n/a closed Burton Buckley All Relaxation of LODs Completed closed Pass Group All Relaxation of LODs Awaiting final land deal Market at Hyson To ensure appropriate area available for market T&CP change of use was closed Green purposes 14 approved with no conditions on 16 th May 2003, to reflect a revised layout for the market, which has now been actively using the site for number of months. Hyson Green Financial Assistance Scheme for traders Applicable works completed end closed Financial September 2003. Recovery period Assistance extends to July 2004. Shipstone Street Provision of replacement site for lost playground 15 Land acquisition and stopping up order closed Playground complete. Planning approval granted. Final design agreed and under construction Allotments Relocate displaced allotment holders on prepared land Relocations done but some acquisition agreements yet to be finalised Route N of To employ track-sharing if viable. Not economically viable closed Basford

13 Arrow has limited liability in accordance with clause 6.3.2 of the Concession Agreement 14 Arrow to undertake accommodation works and minimise disruption 15 Arrow to undertake accommodation works and lay out playground

E:\ModernGov\Data\Committ\Intranet\Greater Nottingham Light Rapid Transit Advisory Committee\20050913\Agenda\$tizgpcoj.doc 42 Updated on July 2005 PROMOTERS’ RETAINED RESPONSIBILITIES 16 UNDER THIRD PARTY AGREEMENTS & UNDERTAKINGS CONCESSION AGREEMENT SCHEDULE 5 AGREEMENT/ CLAUSE RESPONSIBILITY / LIABILITY ACTION UNDERTAKING RETAINE D Debenhams 7(c) Compensation for reasonable costs for cleansing, Included in OHLE agreement. closed redecoration, maintenance and repair attributable to the fixing of OHLE apparatus to the building 11(a) Not to prejudice the right of Debenhams to claim n/a closed compensation under the provisions of the Act 17 5(a) Debenhams to be invited to join the area liaison group Included in City liaison group closed ASDA 5 ASDA to be invited to join the area liaison group Included in Hyson Green liaison group closed Pedals 2 Insertion of rubber inserts or similar devises for the DfT/EPSRC FIT Integrating Bikes and closed benefit and safety of cyclists LRT Research Project has investigated the use flexible flangeway fillers and concluded that a suitable product has not been developed and considerable technical barriers remain. 4 Pedals to be invited to be represented on GNLRT Pedals are represented closed Advisory Cttee. 5 Pedals to be invited to be represented on area liaison Included in City, Arboretum and closed groups Hyson Green groups British Coal All s106 Agreement for Babbington colliery site – transfer Land acquisition to be completed. Corporation of land for NET line and Park & Ride site Agreement for P&R land to be completed shortly. No claims yet received for land along Millenium Way. Owners wish to defer completion until tram operating .

16 See also NET\AGREEMTS\DOCUM’TS\NORETAIN.DOC for Concessionaire’s Responsibilities 17 &

APPENDIX 4

Chartwell Land 1(d) Terms as to payment for provision of temporary work Land acquisition still to be finalised . Developments site 3 Relaxation of LODs Awaiting final land deal 4 Not to prejudice the right of Chartwell to claim n/a closed compensation under statutory provisions or common law 18 7(a) Arbitration n/a closed Burton Buckley All Relaxation of LODs Completed closed Pass Group All Relaxation of LODs Awaiting final land deal Market at Hyson To ensure appropriate area available for market T&CP change of use was closed Green purposes 19 approved with no conditions on 16 th May 2003, to reflect a revised layout for the market, which has now been actively using the site for number of months. Hyson Green Financial Assistance Scheme for traders Applicable works completed end closed Financial September 2003. Recovery period Assistance extends to July 2004. Shipstone Street Provision of replacement site for lost playground 20 Land acquisition and stopping up order closed Playground complete. Planning approval granted. Final design agreed and under construction Allotments Relocate displaced allotment holders on prepared land Relocations done but some acquisition agreements yet to be finalised Route N of To employ track-sharing if viable. Not economically viable closed Basford

18 Arrow has limited liability in accordance with clause 6.3.2 of the Concession Agreement 19 Arrow to undertake accommodation works and minimise disruption 20 Arrow to undertake accommodation works and lay out playground

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21 CONCESSIONAIRE’S RESPONSIBILITIES UNDER THIRD PARTY AGREEMENTS & UNDERTAKINGS CONCESSION AGREEMENT SCHEDULE 5 AGREEMENT/ CLAUSE RESPONSIBILITY / LIABILITY CURRENT STATUS UNDERTAKING PASSED Items marked closed are subject to completion TO ARROW of works snagging, maintenance period obligations, etc.

Agreements Debenhams 2 Property condition survey before and after carrying Survey carried out by Debenham Tie Leung in spring out works. 2001 – copy of report with David Marsh, Debenham’s property division. Post Construction Property Condition Survey completed on 13/8/03. Minor remedial works identified and added to snag list. Undertaking closed 3 Monitor the property during the works, to include Monitoring has been visual only. No preventative or precise levelling of various points on the outside of remedial works have been necessary. the property and in the basement. Supply copies of Check levels produced but some errors in original the monitoring results to the Surveyor appointed by survey found). Detailed inspection of structure Debenhams. Undertake any preventative or confirms no movement. remedial measures to the property necessary as a Undertaking closed. result of the works. 4 Pay any costs incurred by owner for surveyors, etc. No costs yet incurred 5(b) Employ best engineering practices in the Code of Construction Practice in place. construction and maintenance of the works: BCC works complete. to minimise dust, dirt, disruption, etc; Undertaking closed in accordance with Code of Construction Practice; to prevent damage or settlement; to ensure pedestrian and service access to and

21 See also NET\AGREEMTS\DOCUM’TS\RETAIN.DOC for Promoters’ Responsibilities

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from the property entrances (14 days notice required for any closure of access save in emergency); if possible execute works on Market Street and Beast Market Hill as one section, and in an expeditious manner to minimise disruption; to minimise interference to power, drainage, telecommunications, etc. 6 Retain footway width on Market Street (insofar as is Requirement of HA for loading bays plus two-way reasonably practicable) carriageway necessitates east kerb line to be set back approx. 700mm. Resultant footway width > 2.5m and removal of bus shelters mitigates width reduction. Undertaking closed 8 Provide stop close to property (Beast Market Hill) – Stop location here not practicable due to gradient, subject to reasonable consideration of operational highway requirements and NET operational needs of the system, safety, etc) requirements (crossover). Debenhams aware of intention to locate tramstop in South Parade (correspondence Arrow/Promoters Dec 1999) Undertaking closed 10 & 11 Indemnify the owners against all actions, costs, etc Works completed, subject to snagging arising from the works Undertaking closed ASDA 1 Consult with ASDA prior to undertaking works on Works complete. BCC submission of 18 Dec and S Noel St, Terrace St, and Radford Rd. Hunt letter 16 Jan accepts. Undertaking closed.

2 & 3 Take all reasonable steps to maintain access for Signing implemented in consultation with ASDA and deliveries and customers, providing direction Highway Authority. signing at appropriate locations on the highway Undertaking closed network. 4 If ASDA car park is used as an informal P&R, to Operating period issue. establish controls to prevent this use British Coal Corp. All Survey the mine water pipeline and obtain approval Following discussion with Annesley Bentinck

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(Mine water from British Coal Corp. for any diversion; (Regeneration) Ltd and others, pipeline was pipeline) seek all necessary statutory and other consents; temporarily reconnected. Pipeline owned by Rayco – use approved contractors; future use not determined though it is expected that indemnify British Coal Corp. and meet its costs. use will stop in the medium to long term. Lawyers for Rayco have advised that ownership has changed. No other contact Pipeline permanently reinstated. Undertaking closed Pedals 1 From the commencement of works, maintain No special arrangements made for cyclists during existing provision for the use and safety of cyclists works. or provide alternative provision Parallel cycleway substantially complete. Undertaking closed British Gas, All Develop and comply with the Design Code of Utilities working party continues to operate. Severn Trent Practice based on the key design features set out Code of Practice and design developed in line with Water, EME, BT in the Agreement. utility requirements. Install apparatus to monitor stray current. Developed design now constructed. Provide undertakers full information on construction Monitoring points installed. Rail/Earth resistance not and operation of the system at expected levels but no problems identified. Take remedial action and compensate undertakers Monitoring by NTC will continue through operating for results of any stray current period. Set up working party on design code, safe working, etc and prepare a Safe Working Code of Practice. Severn Trent All Giving 6 months notice of street works and 42 days Notice periods being observed. Works complete. (sewers and notice of diversions, etc. Undertaking closed drains) Chartwell Land 2 “Springfields Site” (Morrisons supermarket). Work complete. Developments Minimise disruption during works; restore Undertaking closed temporary sites.

Undertakings Design of Works All Seek advice of Royal Fine Arts Commission on RFAC consulted on CDM, which was included in design of visual appearance of works “Compliance Materials” in the Concession Agreement. Undertaking closed

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Code of All Formulate a code, to reduce/avoid detriment to Code created (24/03/2000) and included in contractual Construction public and environment from noise, vibration, dust specification ‘Compliance Materials’. BCC confirmed Practice or fumes. Code to be a requirement of any Code is a requirement included in subcontracts contract or sub-contract. Works substantially complete. Undertaking closed Consultation and All Establish area liaison groups and discuss with each Liaison groups established for City Centre; Arboretum; Construction of group the timing and method of construction, the Hyson Green; Basford, Bulwell & Cinderhill. These Works environmental impact, effects on businesses and met approx. every 6 months as works progressed. residents and access to premises. Works complete. Undertaking closed Use of All Incorporate appropriate noise or vibration reducing Material factory coated onto rails for track used on Elastomeric Strip material on track designated as tramway tramway (on-street) sections. Vibration absorbent material being laid between concrete layers at sensitive sites – Goldsmith Street adjacent Royal Centre, o/s No1 Mount Hooton, Noel St./Gladstone St., Shipstone St between Mann St. & Wilkinson St. and Radford Rd between Wilkinson St. & ASDA. Undertaking closed Fencing in Forest All Not to fence the alignment in the Forest unless Not intended to fence. advised to do so by HMRI Undertaking closed P&R at Forest All Only use agreed land for P&R and to remove Works completed. Old site grassed. metalled surface on old site, which is to be grassed Undertaking closed Working sites All Use best endeavours to establish other worksites Alternative sites investigated, including Station Street to avoid or reduce use of Forest (being built on for the Capital One offices), the White Moor Showman’s site off Western Boulevard (too far from the central area of works) and Cussons sports ground (would not be made available by the owners). In addition, more intensive use of the Wilkinson Street site was investigated but too short term due to the construction of the depot. Alternative locations at the Forest were also looked at close to Mansfield Road but none provided sufficient space or access. None of the potential sites were suitable for purpose or able to

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be made available during the construction period to meet the programme. Nonetheless, maximum use made of other designated sites, notably Wilkinson Street and Broadmarsh east, for the storage of construction materials. The use of the Forest as a worksite has thus substantially reduced to a little over one fifth the area envisaged at the Bill stage. Therefore temporary loss of space has been avoided or reduced so far as is reasonably practicable and the duty of the Promoters in the undertaking has been met. Forest offices have been removed and the grass reinstated. Undertaking closed. Audible warning All Not to sound audible warning devices fitted to Restricting audible warning system use only for safety on Babbington trams in vicinity of residential premises except reasons is established practice for across the system spur where essential for safety and other safety and will be included in driver training. measures are not available or operative Undertaking continues through operating period. Signals at level All Install light signals on footpath crossing at Neston HMRI does not consider the fitting of light signals to crossing at Dr to Greenwich Ave. to warn of approaching be appropriate at this location where inter-visibility Cinderhill trams; such signals to be visually unobtrusive/not between pedestrians and trams is good. Open Spaces give annoyance to residents. Society (OSS) is not satisfied. Following a risk assessment a single overhead light and signing to be implemented. Shipstone Street All Not to use playground for storage/deposit of plant, Playground was not used for such purposes. Playground – use equipment or materials other than when Undertaking closed as worksite construction through the playground is actually being carried out. Shipstone Street All Undertake accommodation works necessary to Land swap carried out and alternative car park Playground - relocate and lay out the playground. constructed. Playground constructed provide Undertaking closed alternative land Hyson Green All Undertake accommodation works to facilitate Market temporarily relocated to Asda car park during Market market and execute works so as to minimise works. Market has now returned to original location

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disruption to market Undertaking closed Construction & All Construct rail level as deep below existing ground Initial consultation with residents undertaken by operation of level as may be practicable; construct raised bunds Groundwork Nottingham to produce landscape Babbington spur and plant/landscape screening to maintain privacy proposals dated Oct. 1995. Carillion consulted again for residents; construct close boarded fencing before works commenced. Close-boarded fences between tram and gardens. Consult residents on erected where requested. Some lowering of track design and construction and have regard for achieved. Rail level is below original ground by occupant’s preferences. Ensure fences are approx. 400mm at Bridge No 5 (lowering restricted maintained in good repair due to Environment Agency requirements). Lowering increases rapidly to 1.5m 80m east of bridge, then remains at between 1.2 and 1.5 below original level for 200m and levels to original in cutting below houses on Tricornia Drive. Bunding has been formed where practicable. Landscaping proposals have been subject to consultation and are complete.

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