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SEPTEMBER 2019 Developing the case for the West Orbital (WLO)

Presentation to the Transport Economists Group

1 Outline of presentation

• Background/context • What is the ? • Challenges/opportunities along the route • How we have developed the business case Background & Context London is growing

• The Mayor’s Transport Strategy sets out a target for 80% of trips to be made by walking, cycling or public transport by 2041, whilst the draft new London Plan identifies a need for 66,000 additional homes per year • To achieve these targets there is a need for an 85% increase in public transport capacity to support a city of over 10.6 million residents by 2041 • Some of this public transport capacity needs to be delivered through major schemes – incremental upgrades to existing services are not sufficient • In addition to funded and committed schemes, a package of major transport interventions is required to support growth in the capital – Currently, these proposals are not fully funded

4 TfL is investigating the feasibility of a number of major schemes

5 6 What is the West London Orbital? The WLO proposal • ~11miles of route with services between / & Hounslow/Kew Bridge • Service is proposed to open in 2 phases • Phase 1 (4 tph: West Hampstead ->Hounslow) in 2026 • Phase 2 (4 tph: Hendon – Kew Bridge) in 2029 • 15 stations including 4 new stations • • • OOC Victoria Road station • Lionel Road

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The scheme • Existing infrastructure owned by . • West are collectively promoting the scheme • Current services include: • Current freight only line () • Busy passenger/ Freight corridor (NLL) • Busy passenger corridor (Hounslow loop) • Scheme is estimated to cost £273m (2017 prices)

10 The WLO scheme is included in the Mayor’s Transport Strategy (MTS) • Initial scheme development work was borough-led

• After strong stakeholder support, the MTS was amended to reflect WLO

Proposal 88:

‘The Mayor, through TfL, the West London Alliance boroughs and Network Rail, will work towards the delivery of a new ‘West London Orbital’ line connecting Hounslow with and Hendon via Old Oak, Neasden and ’

11 12 Project Delivery Overview – Indicative timescales

Stage 1 - (FY 2018/19) Completed Review and Update existing work, confirm desired outcomes. https://tfl.gov.uk/corporate/publications-and-reports/west-london-orbital

Stage 2A and Stage 2B - Stage 2A currently underway (18-24 months) Further Design work (GRIP 2), Business Case development and public consultation

Stage 3 - Future Phase (18-24 months) Scheme development to single preferred option (GRIP 3 & 4) and more public consultation

Stage 4 - Future Phase (12-18 months) Transport & Works Act Order (or similar) preparation and submission

12 Transport Challenges & opportunities along the route LB Brent, LB Ealing, LB Hammersmith & Fulham, LB Harrow, LB Hillingdon, LB Hounslow and LB Barnet West & north west London is the most significant economic region outside the Central Activities Zone • The region contributing 20% to London’s GDP and having the highest productivity per worker out of any London sub-region.

• Its employment clusters are home to agglomerations of major industries, including transport, logistics, pharmaceutical and media. • The region acts as the UK’s global gateway through Heathrow and will become London’s gateway to the north via HS2 at • The /A40/Heathrow corridor has high demand for industrial land use, driven by warehousing and logistics, and airport related activities.

• LB Brent and LB Ealing have some of the highest levels of net demand for industrial land in London • These boroughs have a high concentration of Strategic Industrial Locations (SIL) critical for effective functioning to London’s economy as it can accommodate by virtue of their scale, noise, odours, dust, emissions, hours of operation, etc.

14 West and north west London is also a region with significant growth potential • Some of London’s most significant Opportunity Areas (OAs) which would experience transformational change over the next decade are located in the region. • In total, 8 of London’s opportunity areas are located in the region – Total of over 80,000 homes and 100,000 jobs • These characteristics mean the area will play a critical role in delivering new homes and jobs London needs over the next 25years.

15 The opening of the Elizabeth line will bring a step change between west London and the CAZ • The new Elizabeth line will improve radial connectivity between west London and the CAZ & Isle of Dogs • Associated changes to the bus network would provide some improvement in radial connectivity to stations • However, north-south connectivity between town centres in the north of the region e.g. and Brent Cross; and those south e.g. Hounslow, would not benefit in a significant way. Change in PT journey time at Harlesden (2016 – 2031). Source: WebCAT • Comparing current & forecast journey times with committed improvements show that the north- south corridor sees little improvement at either end.

16 Poor orbital connectivity is a constraint on mode shift in west London

17 These challenges informed our scheme objectives

Objective A

Enable the delivery of new Objective B homes and jobs in west London Enhance orbital public in line with the principles of Good transport connectivity to and Growth (MTS Policy 21) between major trip attractors (e.g. town centres and Opportunity Areas at Old Oak, Brent Cross and the Great West Corridor) in west Objective C London to support mode shift towards active, efficient and Enhance public transport sustainable modes, and west capacity in west London to London’s continued economic relieve pressure on existing growth corridors and ensure resilience of the public transport network as population grows

18 How we developed the business case Business Case Development

• The Strategic Outline Business Case (SOBC) is the first of a 3 stage decision making process (DfT approach)

• SOBC developed using the five case model approach – Strategic case: supported by a robust case for change – Economic case: demonstrates value for money – Commercial case: commercially viable – Financial case: affordable – Management case: scheme is manageable • This presentation focuses on the strategic & economic cases

20 A number of work streams informed the development of the business case

Strategic modelling What is the overall Technical Development impact of the scheme Capacity Study on the PT network? operations How many homes & assessment jobs can the scheme Are there any technical unlock? show-stoppers at a high level?

Funding study WLO Consents What are the funding strategy opportunities? Business case Can we operate Transport & Works development Act Order without subsidies?

21 Development Capacity study Methodology & assumptions

Stage 1: Understanding the Stage 2: Identify sites & define the potential context

Identify existing development sites in Identification of catchment – SHLAA data Scenario 1: station catchment – without Impact areas Confirm current status – to identify scheme which will come forward development

Identify sites that could be unlocked by Constraints Understand WLO Scenario 2: assessment on context for WLO development development dependent potential potential Apply assumptions regarding level of scenario growth

Identify sites that could be unlocked by Area WLO with a more flexible planning characterisation Scenario 3: approach Max development Apply assumptions regarding level of scenario growth 23 The Development capacity study considered 3 scenarios

• Acts as a baseline to measure development potential • Considers sites with a high degree of certainty – Scenario 1 ‘Approval’, ‘Allocated’ and ‘Potential Development’ “without scheme” • Sites sifted out include ‘Excluded’, ‘to be deleted’, ‘Unsuitable’ and ‘Low Probability’

•Development that could potentially be unlocked as a result of the WLO •Approved sites – no uplift as a result of WLO Scenario 2 •Allocated and Potential Development sites •Phase 3 – scope for uplift as a result of the WLO. Density “WLO dependent” applied assumes a PTAL uplift of 1 resulting in increased density •No change to housing levels for SHLAA Phase 1 & 2

• More flexible approach to planning. Still London Plan Scenario 3 compliant Maximum • Sites identified in scenario 2 are taken forward development • Sites identified as ‘Unsuitable’ in the SHLAA e.g. SIL, LSIS potential • Assumes there is no net loss of employment space • Assumes medium level of intensification

24 Development Capacity study - Key findings (residential) • Under the WLO-dependent WLO dependent Max scenario, the study development identified an additional Station 8,800 residential units Additional units Additional units to baseline to baseline unlocked by the WLO scheme in the area Acton Central 500 3,200 Brent Cross West 0 2,900 • The max-development Brentford 300 1,200 scenario identified up to an Cricklewood 1,600 2,000 Harlesden 100 100 additional 29,300 units. Hendon 550 1,500 Hounslow 350 300 • Significant development Isleworth 200 1,400 (up to 6,000 units Kew Bridge 0 1,700 Lionel Road 0 700 combined) identified Neasden 2,100 5,900 around: OOC Victoria Road 0 - • Cricklewood South Acton 2,400 4,000 • Neasden Syon Lane 100 2,500 • South Acton West Hampstead 600 1,900 Total 8,800 29,300 25 Strategic modelling We modelled 2 service patterns for the economic appraisal • 8tph option

• 4tph option

• 4- car diesel units. Class 172s. and requirement for a fleet of 15 or 8 units (for the 8tph and 4tph options respectively) • The WLO could address orbital connectivity barriers in west London and improve journey times

OD Pair Journey time without Journey time with Journey time saving WLO WLO Hounslow – Tottenham Court Road 62 mins 50 mins 12 mins

Hounslow – Wembley Central 67 mins 47 mins 20 mins Brent Cross West – Ealing Broadway 55 mins 31 mins 24 mins

27 Funding study We investigated several funding approaches to covering Capital Costs • Capital cost is assumed to be approx. £273m • Due to early nature of this estimate figure is inclusive of 80% risk adjustment • Includes cost for potential changes required to stations, level crossings, track junctions doubling, depot and re-signalling • This does not account for the possible need of electrification that would further increase the cost • Rolling stock is assumed to be covered under operational cost • Assessments to be carried out at the next stage of this project will contribute towards a more refined Capital cost estimate based on a confirmed scope of works.

29 We investigated several funding approaches to covering Capital Costs • Funding from Community Infrastructure Levy (CIL) and public-sector development are within the powers of the boroughs affected by the scheme • However, retention of income from business rates growth by each borough would require the 1km zones of influence around of each station to be designated as an Enterprise Zone by the UK Government for up to 25 years • The majority of scheme costs would be incurred pre-2029, but most of the revenue identified will be available post 2029 • Work on a funding strategy commences shortly to consider additional funding & financing options Funding source WLO – dependent (£m Max development 2017/18) (£m 2017/18)

CIL 45 128

Direct Development 29 35

Business Rates (new & 299 550 incremental)

30 Operating cost and revenue

• The following matters have been considered for the operating costs of the scheme:

• Revenue forecasting: Additional analysis to the revenue forecasts, including different factors, to assess the true impact of fares in the affordability of the operating side of the scheme

• Different levels of services: Analysis of various ways to run the services in order to attempt to keep operating costs affordable

• Other options: Alternative rolling stock options, potential for non-fare box income

• Total operating cost calculated as £26m and 14m (2018/19 prices) respectively for the 8tph and 4tph scenario

• Net revenue was calculated as <£5m

• We are currently considering options and opportunities to close this gap

31 Economic Case The scheme has medium to high value for money

Draft Economic appraisal output

Discounted £m, 2010 values)

33 Next steps 35 Project Delivery Overview – Indicative timescales

Stage 1 - (FY 2018/19) Completed Review and Update existing work, confirm desired outcomes. https://tfl.gov.uk/corporate/publications-and-reports/west-london-orbital

Stage 2A and Stage 2B - Stage 2A currently underway (18-24 months) Further Design work (GRIP 2), Business Case development and public consultation

Stage 3 - Future Phase (18-24 months) Scheme development to single preferred option (GRIP 3 & 4) and more public consultation

Stage 4 - Future Phase (12-18 months) Transport & Works Act Order (or similar) preparation and submission

35 We are now working on progressing the scheme towards GRIP 2 level design • Work split into Phases 2A and 2B, with Phase 2A focusing on potential ‘showstopper’ issues.

WLA Led TfL Led • Funding & Financing study • Rolling Stock Strategy • Economic Development study • Development of operational concept • Development of maintenance concept • Review of existing station capacity Network Rail Led • Signalling feasibility assessment • Timetable Assessment • Acton Wells Junction • Level Crossing Assessment Remodelling Feasibility • Power assessment Assessment

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Contact Seyram Kumapley [email protected]