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Strategic Outline Business Case Gallions Reach and Belvedere River Crossings Strategic Outline Business Case Date: November 2015 Version: Final 2 CONTENTS 1. Executive Summary ....................................................................................... 4 2. The approach to the business case ................................................................. 19 3. The Strategic Case ...................................................................................... 23 4. The Economic Case ..................................................................................... 95 5. The Financial Case ..................................................................................... 136 6. The Commercial Case ................................................................................. 141 7. The Management Case ................................................................................ 144 8. Conclusion ............................................................................................... 151 3 1. Executive Summary 1.1. The proposed scheme and purpose of this document 1.1.1. The East of Silvertown project is proposed to be two fixed link highway crossings in east London – one at Gallions Reach, connecting Thamesmead and Beckton, and the other linking Belvedere and Rainham. 1.1.2. The Gallions Reach crossing would link the A2016 Western Way in Thamesmead with the A1020 Royal Docks Road in the north, which in turn links to the A13 and A406 North Circular Road. The Belvedere crossing would link the A2016 Bronze Age Way in Belvedere with the A13 Marsh Way junction in Rainham. Figure 1-1 Proposed river crossings to the East of Silvertown and Opportunity Areas East of Silvertown crossings 1.1.3. These crossings are key to unlocking the full potential of east London; supporting London’s population growth and helping drive its economy by addressing the severance caused by the Thames. 1.1.4. This project sits within a wider series of new river crossings for London which are intended to reduce the barrier effect of the Thames. These crossings consist of public transport, highway, pedestrian and cycle links to improve people’s access to jobs, facilitate business activity, support housing development, enhance the resilience of the transport network and encourage more sustainable travel. 1.1.5. This is a Strategic Outline Business Case (SOBC) which is presented in accordance with the DfT’s Business Case Guidance, using a five case model which considers whether, and how, the scheme: is supported by a robust case for change that fits with wider public policy objectives: the ‘strategic case’; demonstrates value for money: the ‘economic case’; is commercially viable: the ‘commercial case’; is financially affordable: the ‘financial case’; and is achievable: the ‘management case’. 4 1.1.6. The East of Silvertown project is not yet at a stage where a preferred option has been identified and further detailed feasibility work and informal and formal consultation is required before a preferred option is put forward. The shortlisted options that could form part of a preferred option at a later date are presented in this SOBC. 1.1.7. All the options are assumed to provide two lanes in each direction – one for general traffic and one for public transport. Bus services would use the crossings and link into the existing local bus networks. Other public transport connections are under consideration including a new branch of the DLR from Gallions Reach station across to the southern side of the Thames. 1.1.8. TfL would incorporate pedestrian and cycling facilities into any new crossing as part of the East of Silvertown project, provided they can be accommodated in a manner that guarantees the safety and security of users, at a reasonable cost. 1.2. Strategic Case London’s growth is vital to help tackle the productivity challenge and drive a strong UK economy 1.2.1. London is a rapidly growing city with a population of 8.6 million people which is expected to grow to over 10 million by 2036, and to reach 11.3 million by 2050. London has a highly productive, strong economy and over the next 20 years, the number of jobs in London is also projected to grow by 700,000 to 6.3 million. This growth is shown in Figure 1-2 below. Figure 1-2 Historic trends and projected growth in London’s employment and population to 2036 1.2.2. The expansion of London’s high value internationally competitive sectors located in its centre – which drive UK productivity – depends on further growth in other sectors across the city, including a number of specialist clusters. These provide a wide array of vital business functions and service the growing population that economic growth generates. 1.2.3. Delivering this projected growth in London would play a crucial role in supporting the economic success of the UK as a whole. However there are considerable challenges and London’s continued success cannot be taken for granted. 5 1.2.4. As set out in the Budget and the Fixing the Foundations report, a central task for this Government is to create the right conditions for a much more productive national economy. We must enable London to maximise its contribution to this – and within this, the role that east London plays. East London has significant potential to contribute further to the economic performance of London and the UK 1.2.5. While London is growing as a whole, it is expanding east from the centre at an especially rapid rate. This eastwards shift is driven by development opportunities, supportive planning, momentum and a favourable investment climate. The region is forecast to generate nearly 300,000 more jobs by 2036. 1.2.6. Over the last 15 years regeneration has transformed much of the former Docklands, particularly in inner east London boroughs. This has been accompanied by a diversification of the economic base and a substantial increase in employment. Canary Wharf is now well established as an integral part of the productive core of London and there are newer economic and employment hubs emerging within the region like Stratford and Royal Docks as well as clusters of specialist activities like O2 and Excel. 1.2.7. East London also forms part of the Thames Gateway corridor, which extends eastwards beyond London’s boundaries into Essex and Kent, along the Thames Estuary. The Thames Gateway corridor represents a significant opportunity for growth within London and the South East. Sectors of the Thames Gateway economy that make up the majority of employment are business and other services, construction, transport and distribution and ‘non-marketed’ services. 1.2.8. There are large areas of land on both sides of the River Thames classified as Strategic Industrial Locations (SIL). East London contains nearly 40% of London’s industrial land, and these industrial areas play an important role in servicing businesses based in the Central Activities Zone (CAZ) and central parts of London. 1.2.9. There is a significant transport and logistics presence within the Gateway, including the recently opened London Gateway container port, and distribution centres and warehousing. Some 30% of London’s warehousing space is in the east London sub- region. 1.2.10. These logistics and distribution centres play a vital and increasingly important role in supplying consumer and business demand across London as a whole, including within central London, where land supply is scarce and there is a trend towards denser levels of development. 1.2.11. East London is particularly suitable for intensification of existing employment land and new development as it has significant levels of vacant or under-used land. The areas designated as SIL could become even more important with wider changes in land use in other parts of London from industrial to residential/mixed use. 6 East London will also need to play a significant role in solving London’s housing crisis which otherwise threatens to constrain economic growth 1.2.12. Over a prolonged period of time, the rate of delivery of new housing supply in London has not kept up with demand. As set out in the London Plan, 49,000 new homes need to be built each year. Indeed, to make up the existing backlog up to 62,000 homes are needed each year to 2025. However, over the last five years, an average of only 25,000 new dwellings has been delivered. 1.2.13. As a result, London has a chronic housing shortage, resulting in greater crowding within properties, and increases in housing costs. The median house price to average annual earnings multiple for London has increased from six times annual average earnings in 2001 to over ten times average earnings in 2014. If this issue is not addressed it is likely to constrain London’s economic growth, with major impacts for the UK as a whole. Providing sufficient housing to meet current and future demand is therefore a key priority of central Government, the Mayor, and London boroughs. 1.2.14. Opportunity Areas (OAs) are the capital’s main reservoir of brownfield land. The London Plan highlights the potential of the east London sub-region to deliver a substantial proportion of the housing growth forecast for the Capital, with 14 designated OAs (shown on Figure 1-3). Figure 1-3 Location of the 14 Opportunity Areas in east London* *Potential to accommodate development based on Further Alterations to the London Plan (FALP) targets 1.2.15. There are also three key Housing Zones in outer east London (Abbey Wood, Plumstead and Thamesmead (RB Greenwich); Abbey Wood and Thamesmead (LB Bexley) and Rainham and Beam Park (LB Havering)). 1.2.16. Overall, the sub-region is expected to accommodate nearly a third of London’s projected population growth. 7 This planned growth will build on change already underway, helping to tackle areas of deprivation and address wider policy goals 1.2.17. As Figure 1-4 shows, the parts of east London that are within the Thames Gateway corridor are some of the most deprived areas of the UK. By comparison with the rest of the wider South East, more people in the Thames Gateway corridor are unemployed and they have fewer qualifications and skills than the London average.
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