The government’s transport adviser has conducted a study into Britain’s long-term transport needs. Could this mark the start of a golden age for the construction industry?

Sir Rod Eddington is due to present the government with a report into Britain’s transport system in two months’ time. It could prove to be the most significant set of road, rail and aviation proposals for the next 30 years and, as a happy consequnce, it will ensure a steady, long-term flow of work for the construction industry. Its importance may have been lost in the melee of other stories in the news at the moment, but Building has looked into its possible recommendations and their implications for the industry.

What is the Eddington Transport Study?

The 2005 Budget announced that Eddington would “work with the Department for Transport and the Treasury to advise on the long-term impact of transport decisions on the UK’s productivity, stability and growth”. The study would offer recommendations about the policy options the government should take to develop the nation’s transport infrastructure to 2035. It would also look into the planning system, because it was believed that this was a potential hindrance to the development of major schemes.

Malcolm Taylor, rail director at engineering consultant Faber Maunsell, says: “What was interesting was that the study was not canvassing for views on specific terms and schemes, rather it was looking at things in a broad sense, painting a backcloth.”

Who is Sir Rod Eddington?

The Australia-born, Oxford-educated Eddington was managing director of Cathay Pacific and executive chairman of Ansett Airlines, before landing the chief executive job at British Airways in 2000. He gained a reputation for either efficiency or ruthlessness, depending on your point of view – he made 14,000 people redundant and cut debt the company’s debt by about 60%. He retired last year. In his farewell speech he controversially attacked American Airlines for “distorting competition” with low-cost flights that do not even cover their costs. He said: “America, the land of the free, is turning itself into the land of the free ride.”

It is likely that Sir Rod Eddington will support a London-to-Scotland high-speed rail link
It is likely that Sir Rod Eddington will support a London-to-Scotland high-speed rail link

What was interesting was that the study looked at things in a broad sense, painting a backcloth

Malcolm Taylor, Faber Maunsell

The study went out to industry for consultation (see key questions below). What responses did it receive?

Taylor says Faber Maunsell advised spending more money on the rail system, emphasising that this was a matter of environmental importance. He says: “We looked at sustainability through improved rail links. There are more benefits with rail, more than just building more motorways.”

In its response, the Railway Forum complained that Eddington was too narrowly focused on financial and economic factors, rather than environmental and social issues. It suggested the need for “a high-speed rail network linking conurbations across Britain” and warned that increased rail construction was vital as there was a “capacity deficit”, and demand for services would far outstrip supply. It said: “In the shorter term we need a drive to rebalance the deficit.”

The forum also said there was a simplistic approach to capital expenditure on rail infrastructure – the cost seems to be higher than it is, as the spend takes place over a short investment period. However, it should be considered that the infrastructure’s lifespan is far longer than that.

The Local Government Association echoed this point when it complained that “a lack of consistency and clarity between national and local governments is exemplified by the long-running arguments over the affordability of large transport projects, some of which have seen green lights withdrawn on the basis of escalating costs”. It said this showed that large schemes’ economic advantages were not weighed correctly against their initial costs. The LGA added that any planning reform needed to ensure that councils could assess economic impacts when making decisions on transport schemes.

The Sustainable Development Commission recommended that developers build at least 50 dwellings per hectare so that there was a large enough population to ensure the construction of good transport links was economically viable.

The Construction Products Association suggested building more bypasses to improve traffic flow and developing ports to increase capacity. As for rail, it recommended that firm government commitments be made on projects such as Crossrail and Thameslink 2000. To improve product distribution, it argued for upgrades to freight routes to accommodate distribution from Europe and support for new railheads. The association added that the apparent abandonment of the 10 Year Transport Plan had had “a damaging impact” on the construction sector’s ability to build key infrastructure cost-effectively. As a result, it recommended that government capital expenditure become less volatile.

Sir Rod has had to wait, but at least this will show joined-up thinking between the DfT and the study

Industry source

Costain was one of 12 companies from across industry – others included BMW and Honda – that made recommendations to Eddington at a CBI workshop last November. The contractor suggested that firms bidding for projects should be allowed to talk to councils to help resolve planning problems before a preferred bidder was appointed. This would help avoid litigious, time-consuming planning disputes at a later stage. Stephen Wells, Costain’s business development director, says: “We were talking about getting more agility into the planning process.”

Why was the report delayed?

Eddington was supposed to hand over his report to the government this summer, but it will now be announced in November at the same time as Gordon Brown’s Pre-Budget Report. Last month, transport secretary Douglas Alexander said in a written statement to the House of Commons:

“Sir Rod advised that he would like to undertake further work on some substantive matters before submitting his advice.”

The transport department is working on its own rail strategy for the next 30 years. While this is likely to be more detailed than Eddington’s proposals, there is thought to have been a feeling that the two reviews should not contradict each other’s broad ideas. An industry source says: “Eddington has had to wait, but at least this will show joined-up thinking between the department and the study that it commissioned him to produce.”

Eddington is likely to praise Heathrow’s Terminal 5 as an exemplary model for transport growth
Eddington is likely to praise Heathrow’s Terminal 5 as an exemplary model for transport growth

What are the likely recommendations of the study?

A lack of consistency and clarity is exemplified by the long-running disputes over affordability

Local Government Association

Industry sources believe that for rail, Eddington will recommend that the government commits itself to building a high-speed rail link between London and Scotland. Trains would run at about 200 miles per hour and the journey would take about two-and-a-half hours. Like the Channel Tunnel Rail Link, speed would be maximised by having as few stops as possible, although one in Birmingham would be considered. According to a leading rail figure, this would involve hundreds of miles of new track, as “there is little existing infrastructure to take that kind of service”.

Eddington is also likely to suggest that the likes of Railtrack have been obsessed by station developments, and have not taken enough care to analyse how bus, Tube, overground and trams interact for long journeys. He is likely to call for transport bodies to design better links between these modes of transport, essentially modelled on the approach taken by Transport for London.

With the focus on rail and environmental issues, it could well be that road building is not recommended, and there are even suggestions that he might support tolling to relieve congestion. There could also be more technology put in place, including variable speed controls on motorways.

For aviation, Eddington might recommend the construction of more regional airports to support the growth of air travel. He would call for the early announcements of schemes so that councils would better plan their budgets. A sixth terminal at Heathrow could be supported, but it might be that Eddington decides not to cross this political minefield and simply praise Terminal 5 as a model of good transport growth.

The broad thrust of his planning system suggestions will be to streamline the process so that it takes less time for consent to be granted. His suggestions will have a knock-on effect for energy proposals, such as nuclear stations, because, if accepted by the government, they will speed up all new major schemes.

Will the government support Eddington’s proposals?

This seems highly likely. Brown, who will almost certainly be the next prime minister, publicly supported Eddington at a speech to business leaders in June. He said: “Following the infrastructure review headed by Sir Rod Eddington, we will work with you to agree long-term transport and infrastructure reforms both for London and the whole of the UK and bring public and private sectors together to deliver them.”