Review of Lower Thames Crossing Options: Final Review Report
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April 2013 Review of Lower Thames Crossing Options: Final Review Report Prepared by: .................................................. Checked by: ........................................................... Andrew Currall, Senior Consultant Mark Dazeley, Associate Director Graham Powell, Regional Director Ian Burrows, Regional Director Jameel Hayat, Principal Consultant Mark Dazeley, Associate Director Approved by: .................................................. Paul Hanson, Regional Director Review of Lower Thames Crossing Options: Rev Comments Checked Approved Date No by by 1 Initial draft for comment MJD PAH 2012-11-14 2 Revised draft with updates following initial feedback MJD PAH 2012-11-21 3 As v2 with corrupt tables corrected MJD PAH 2012-11-22 4 Revisions following formal DfT feedback MJD PAH 2012-12-19 5 Further revisions following DfT feedback IB PAH 2013-02-22 6 Further revisions following DfT feedback IB PAH 2013-03-22 7 Further revisions following DfT feedback IB PAH 2013-04-25 8 Draft Issue for publication IB PAH 2013-05-10 9 Issue for publication IB PAH 2013-05-20 AECOM House, 63-77 Victoria Street, St Albans, Hertfordshire, AL1 3ER Telephone: 01727 535,000 Website: http://www.aecom.com Job No 60249197 Reference 09 Reports Date Created April 2013 This document has been prepared by AECOM Limited for the sole use of our client (the “Client”) and in accordance with generally accepted consultancy principles, the budget for fees and the terms of Reference agreed between AECOM Limited and the Client. Any information provided by third parties and referred to herein has not been checked or verified by AECOM Limited, unless otherwise expressly stated in the document. No third party may rely upon this document without the prior and express written agreement of AECOM Limited. Although this report was commissioned by the Department for Transport (DfT), the findings and recommendations are those of the authors and do not necessarily represent the views of the DfT. The information or guidance in this document (including third party information, products and services), is provided by DfT on an 'as is' basis, without any representation or endorsement made and without warranty of any kind whether express or implied. p:\uksta1-tp-planning\projects\transport planning - review of lower thames crossing capacity options\09 - reports\output 4-5\130509 ltc review report.docx AECOM Review of Lower Thames Crossing Options: Final Review Report Table of Contents 1 Introduction..................................................................................................................................... 1 1.1 Purpose of this Report........................................................................................................... 1 1.2 Context .................................................................................................................................. 1 1.3 Scope of the Review.............................................................................................................. 2 1.4 Approach ............................................................................................................................... 4 1.5 Report Structure .................................................................................................................... 5 2 Review Methodology...................................................................................................................... 6 2.1 Purpose of Chapter ............................................................................................................... 6 2.2 Business Case Development ................................................................................................ 6 2.3 Specifying the Evidence Requirements................................................................................. 7 2.4 Overview of Developing the Evidence................................................................................... 8 2.5 Identifying Constraints........................................................................................................... 8 2.6 Costing and Engineering Feasibility ...................................................................................... 9 2.7 Development of Demand Forecasting Tools ....................................................................... 10 2.8 Development of Demand Forecasts.................................................................................... 12 2.9 Summary of Chapter ........................................................................................................... 13 3 The Strategic Case ....................................................................................................................... 14 3.1 Purpose of Chapter ............................................................................................................. 14 3.2 Business Strategy ...............................................................................................................14 3.3 The Need for Change.......................................................................................................... 15 3.4 Short to Medium Term Improvements................................................................................. 17 3.5 Objectives............................................................................................................................ 18 3.6 Measures of Success .......................................................................................................... 19 3.7 Scope of a Future Scheme.................................................................................................. 19 3.8 Other Considerations........................................................................................................... 19 3.9 Stakeholders’ Views ............................................................................................................ 21 3.10 Summary ............................................................................................................................. 22 4 The Economic Case ..................................................................................................................... 23 4.1 Purpose of Chapter ............................................................................................................. 23 4.2 Assumptions and Context ................................................................................................... 23 4.3 The Base Case.................................................................................................................... 24 4.4 Direct Impact of New Crossings at Location Options .......................................................... 26 4.5 Appraisal Summary Tables ................................................................................................. 34 4.6 Summary of impacts of all options....................................................................................... 39 4.7 Value for Money Assessments............................................................................................ 45 4.8 Value for Money Assessment: Option A.............................................................................. 46 4.9 Value for Money Assessment: Option B.............................................................................. 48 4.10 Value for Money Assessment: Option C.............................................................................. 49 4.11 Value for Money Assessment: Option Cvariant................................................................... 51 4.12 Comparison of Value for Money Assessments.................................................................... 52 4.13 Summary ............................................................................................................................. 53 5 The Commercial Case .................................................................................................................. 54 AECOM Review of Lower Thames Crossing Options: Final Review Report 5.1 Purpose of Chapter ............................................................................................................. 54 5.2 The Department for Transport’s experience of delivering project using private finance...... 54 5.3 Commercial Risks................................................................................................................54 5.4 Commercial Models............................................................................................................. 57 5.5 Update on the long-term debt funding market – April 2013................................................. 59 5.6 Summary of Key Findings ................................................................................................... 61 6 The Financial Case ....................................................................................................................... 63 6.1 Purpose of Chapter ............................................................................................................. 63 6.2 Methodology........................................................................................................................ 63 6.3 Revenue Collection Assumptions........................................................................................ 63 6.4 Balance Sheet Treatment of the Lower Thames Crossing.................................................. 64 6.5 Summary points on each of the Commercial Models.........................................................