In message
-septe
mber.org, at 08:21:07 on Tue, 26 Apr 2016, Recliner
remarked:
No, if you take the money given to Network Rail to subsidise the
maintenance and new "investment" in the system (used by these TOCs) as a
whole, then the fares do cover it.

Last year it might be rebuilding Kings Cross, next year Cambridge North.
15yrs ago it was re-laying much of the ECML because of Hatfield.

That's maintenance and renewal, not new building. I'm talking about
acquiring land and building new lines, nit just fixing what's already
there.

There's not a great deal of that happening in the territory of the TOCs
who are making an overall net contribution, after all infrastructure
costs have been included.

As you say, the cost of the wiring in the late 70's was paid for years
ago, although the ongoing maintenance costs undoubtedly swamp any
notional interest payments on the construction cost.

For example, do you really think the Tube fares cover the full costs of
extending the Piccadilly line to Heathrow, including the three stations?

The TOCs I'm talking about are not operating on that particular line.
But on the other hand the fares on that bit of the Piccadilly Line over
the years will be quite a handsome sum.

But that sum (remember, unlike HEx, there's no premium on the Tube fare to
Heathrow, and it's included in daily caps and Freedom Passes) won't have
covered the cost of the tunnelling and station building.

I think you'll have to produce some figures to back that up. I wonder
how many airport workers and business travellers have Freedom Passes,
which post-date the line being extended to Heathrow by quite a lot. And
of course all the tourist traffic from outside London don't have them at
all. As someone from outside London, the existence of the Piccadilly
line is likely to make me pay for the entire trip to the airport by
public transport, rather than drive.

Hopefully, it at least covered the cost of buying extra trains and
operating them over the extended line.

--
Roland Perry

Roland Perry wrote:
In message
-septe
mber.org, at 08:21:07 on Tue, 26 Apr 2016, Recliner
remarked:
No, if you take the money given to Network Rail to subsidise the
maintenance and new "investment" in the system (used by these TOCs) as a
whole, then the fares do cover it.

Last year it might be rebuilding Kings Cross, next year Cambridge North.
15yrs ago it was re-laying much of the ECML because of Hatfield.

That's maintenance and renewal, not new building. I'm talking about
acquiring land and building new lines, nit just fixing what's already
there.

There's not a great deal of that happening in the territory of the TOCs
who are making an overall net contribution, after all infrastructure
costs have been included.

As you say, the cost of the wiring in the late 70's was paid for years
ago, although the ongoing maintenance costs undoubtedly swamp any
notional interest payments on the construction cost.

For example, do you really think the Tube fares cover the full costs of
extending the Piccadilly line to Heathrow, including the three stations?

The TOCs I'm talking about are not operating on that particular line.
But on the other hand the fares on that bit of the Piccadilly Line over
the years will be quite a handsome sum.

But that sum (remember, unlike HEx, there's no premium on the Tube fare to
Heathrow, and it's included in daily caps and Freedom Passes) won't have
covered the cost of the tunnelling and station building.

I think you'll have to produce some figures to back that up.

See
https://tfl.gov.uk/corporate/about-t...-we-are-funded

As you can see, despite how high they are, fares only provide 40% of TfL's
funding. The local and central government grant provides 23% of the
funding.


This paper shows that LU fares cover 125% of the operating costs, which is
fairly typical. As the paper points out, that's not the same as making a
bottom line profit.

"You often hear people talking of railways making a profit. What they are
actually referring to is that the railway takes in more fare revenue than
it spends on operating costs. People ignore the value of the
infrastructure, they ignore interest payments, they ignore repayment of
loans and they forget future renewals. A railway company may choose to
ignore renewals too, knowing that the government will be too afraid
politically to let the system collapse for want of new trains or rebuilt
track. Government will therefore pay for them. Even so, in spite of
removing the renewal and financing costs of the railway, few railways are
able to cover all their operating costs from farebox revenue."

From
http://www.railway-technical.com/finance.shtml

On 25/04/2016 09:52, Graeme Wall wrote:
On 25/04/2016 09:37, Recliner wrote:
Graeme Wall wrote:
On 25/04/2016 09:14, Recliner wrote:
Graeme Wall wrote:
On 25/04/2016 09:00, Recliner wrote:
From
http://www.telegraph.co.uk/business/...rt-for-london/


Quote:

Heathrow's controversial proposal to build a third runway would
place a
£16bn burden on Transport for London, the agency has said, as it
would
require upgrades to the road and railway networks that service the
airport.

TfL said Heathrow had "substantially underestimated" the impact of
the
extra runway, as it released a figure eight times higher than the
£2.2bn
that the airport had calculated.

The transport authority instead estimates that the development,
which could
lead to heavier congestion on London's roads, buses and trains,
will have a
£18.4bn price tag.

Heathrow has previously promised that £1.2bn would be raised
through public
contributions, with the airport spending another £1bn, leaving a
shortfall
of more than £16bn.

... continues


Haven't they put off the announcement yet again?


The government has deferred its announcement till after the
referendum. And
perhaps it will find some other reason after that.

But assuming that it will eventually have no choice but to stop
dithering,
the chances are that it will turn out that both LHR and LGW have
allowed
for only modest contributions to the public transport improvements
outside
their perimeters. They've almost certainly assumed that most of the
expensive enhancements to the local roads and railways will be paid
for by
the government, not the airports. And this could be the sticking
point with
both proposals.


Costs at LGW, whoever pays, are going to be a lot less than at LHR. Not
sure what the relative political cost will be. No leading politician
has nailed himself to the mast of opposing Gatwick expansion so you will
mainly be dealing with the usual nimbies, many of whom will moan but
carry on voting tory anyway so they can effectively be ignored.


The political costs will be less at Gatwick, but the transport costs
may be
even more than Heathrow. Doubling the number of airport passengers will
probably require some major, and very expensive railway and motorway
upgrades, including to the Brighton main line, M23 and M25.


Have you seen the cost of moving the M25 underground? As for the rail
links, wherever you put the runway it is going to be a major headache
trying to add extra services into London, there isn't a major terminal
that isn't nearing saturation point. The best option is to
build it at Birmingham and use HS2 to get the passengers to and from
London.

Speke (John Lennon) would only need a new terminal building, an
improvement on A561/A562 (leading to A533/M57/M62/M6) and a rail spur
connection to the nearby Liverpool-Crewe main line.

On 25/04/2016 11:00, Roland Perry wrote:
In message
-sept
ember.org, at 09:04:53 on Mon, 25 Apr 2016, Recliner
remarked:

The transport authority instead estimates that the development,
which could
lead to heavier congestion on London's roads, buses and trains,
will have a
£18.4bn price tag.

Is that figure net or gross of the fares the extra passengers will be
paying?

It's a capital cost, not an operating cost. And most road users
don't pay
fares.

But how much of the £18bn is new roads, let alone ones TfL will be
responsible for?


The article goes on to say:

The Airports Commission estimated that the cost of Heathrow expansion to
TfL would be £5.7bn in its publication about the future of airport
expansion released last summer. The money, it said, would be spent on
renovations such as widening the M4 or creating an M25 tunnel that
would go
underneath the runway.

I always thought the Highways Agency was in charge of those motorways,
not TfL; but putting that to one side it does look as if the majority of
the money will be going on public transport, which will then pay much of
it back through fares.

TaL is well-known not to have any say over motorways (thank God).

In message
-sept
ember.org, at 15:02:02 on Tue, 26 Apr 2016, Recliner
remarked:
Those numbers still don't show what the profitability overall of the
Heathrow extension is. It's pretty busy, which would tend to skew its
fare basket towards the more profitable end. From TfL figures 13.7
million trips a year. If each trip "generates" say £2 more in fares than
if it didn't exist, factor by 40% to account for maintenance etc, that's
£11m a year.

The original extension apparently [Flight International 1969] cost £26m
(about half of which was works east of the extension to cope with the
additional train/passenger traffic).

Even allowing for inflation, that sounds incredibly low. As the line
opened in 1977, and has been extended twice since then (to T4 and then
T5), I suspect the real cost was many times higher than an
astonishingly low 1969 estimate.

For the whole system, yes. But more than half the revenue comes from
T123 station, and it's been rolling in for almost 40yrs.

The T5 revenue will be rolling in for the next 40yrs.

Sure, but the fares revenue will never repay the construction cost.

You don't think (taking inflation into account) that £11m for 40rs is
capable of repaying a £26m build cost?

If we average it around the half-way point, which is 1992 in inflation
terms, the cost then would be £78m and the fares revenue (downgraded by
40% and with a £2 contribution as above) £5.5m a year. That's still a
very useful 7% return on investment.
--
Roland Perry

On Tue, 26 Apr 2016 16:51:12 +0100, JNugent
wrote:

On 25/04/2016 11:00, Roland Perry wrote:
In message
-sept
ember.org, at 09:04:53 on Mon, 25 Apr 2016, Recliner
remarked:

The transport authority instead estimates that the development,
which could
lead to heavier congestion on London's roads, buses and trains,
will have a
£18.4bn price tag.

Is that figure net or gross of the fares the extra passengers will be
paying?

It's a capital cost, not an operating cost. And most road users
don't pay
fares.

But how much of the £18bn is new roads, let alone ones TfL will be
responsible for?


The article goes on to say:

The Airports Commission estimated that the cost of Heathrow expansion to
TfL would be £5.7bn in its publication about the future of airport
expansion released last summer. The money, it said, would be spent on
renovations such as widening the M4 or creating an M25 tunnel that
would go
underneath the runway.

I always thought the Highways Agency was in charge of those motorways,
not TfL; but putting that to one side it does look as if the majority of
the money will be going on public transport, which will then pay much of
it back through fares.

TaL is well-known not to have any say over motorways (thank God).

Not having direct control is not the same as not having a say. Also,
TfL inherited at least two motorways (A102(M) and M41) but these were
immediately re-classified as non-motorway special roads.

Roland Perry wrote:
In message
-sept
ember.org, at 15:02:02 on Tue, 26 Apr 2016, Recliner
remarked:
Those numbers still don't show what the profitability overall of the
Heathrow extension is. It's pretty busy, which would tend to skew its
fare basket towards the more profitable end. From TfL figures 13.7
million trips a year. If each trip "generates" say £2 more in fares than
if it didn't exist, factor by 40% to account for maintenance etc, that's
£11m a year.

The original extension apparently [Flight International 1969] cost £26m
(about half of which was works east of the extension to cope with the
additional train/passenger traffic).

Even allowing for inflation, that sounds incredibly low. As the line
opened in 1977, and has been extended twice since then (to T4 and then
T5), I suspect the real cost was many times higher than an
astonishingly low 1969 estimate.

For the whole system, yes. But more than half the revenue comes from
T123 station, and it's been rolling in for almost 40yrs.

The T5 revenue will be rolling in for the next 40yrs.

Sure, but the fares revenue will never repay the construction cost.

You don't think (taking inflation into account) that £11m for 40rs is
capable of repaying a £26m build cost?

If we average it around the half-way point, which is 1992 in inflation
terms, the cost then would be £78m and the fares revenue (downgraded by
40% and with a £2 contribution as above) £5.5m a year. That's still a
very useful 7% return on investment.

I don't believe that absurdly low cost figure. In 1992 terms, the cost of
the full Piccadilly line extension, including the four stations, was
probably well over £250m, maybe closer to £500m.

In today's money terms, it would have been well over £1bn, probably over
£2bn. For example, the much shorter (2 miles), simpler current Northern
Line Battersea extension (with two stations) is costing about £1bn. On that
basis, if constructed today, the Piccadilly line Heathrow extension would
cost well over £2bn.

See
http://www.wandsworth.gov.uk/news/ar...line_extension

The somewhat longer (10 miles) JLE cost £3.5bn, or £350m per mile. That
again suggests a cost in the region of £1.5bn in 2000 money terms for the
full Piccadilly Heathrow extension, which is almost half the length. That's
consistent with the almost £2bn I estimate in current money terms.

I agree with you that the Heathrow extension is busier, with higher average
fares, than other lines, so let's assume that fares revenue covers 150% or
even an exceptional 200% of the operating costs, rather than the more
typical 125%. Would that surplus even pay the interest on the loans to
build the line, let alone repay any of the capital cost?

Charles Ellson wrote:
On Tue, 26 Apr 2016 16:51:12 +0100, JNugent
wrote:



I always thought the Highways Agency was in charge of those motorways,
not TfL; but putting that to one side it does look as if the majority of
the money will be going on public transport, which will then pay much of
it back through fares.

TaL is well-known not to have any say over motorways (thank God).

Not having direct control is not the same as not having a say. Also,
TfL inherited at least two motorways (A102(M) and M41) but these were
immediately re-classified as non-motorway special roads.


Was the Westway under TfL's (or its predecessor's) control when it was
still a motorway? There was a time when I commuted to work on it most
days.

On 26/04/2016 21:27, Recliner wrote:
I don't believe that absurdly low cost figure. In 1992 terms, the cost of
the full Piccadilly line extension, including the four stations, was
probably well over £250m, maybe closer to £500m.

In today's money terms, it would have been well over £1bn, probably over
£2bn. For example, the much shorter (2 miles), simpler current Northern
Line Battersea extension (with two stations) is costing about £1bn. On that
basis, if constructed today, the Piccadilly line Heathrow extension would
cost well over £2bn.

See
http://www.wandsworth.gov.uk/news/ar...line_extension

The somewhat longer (10 miles) JLE cost £3.5bn, or £350m per mile. That
again suggests a cost in the region of £1.5bn in 2000 money terms for the
full Piccadilly Heathrow extension, which is almost half the length. That's
consistent with the almost £2bn I estimate in current money terms.


Who says that we're getting equivalent value on each different piece of
work? Anecdotally the cost of building railways seems to be going up,
and that's before you take into account the stupidly over-engineered
stations and so on of the JLE.

In message
-sept
ember.org, at 20:27:59 on Tue, 26 Apr 2016, Recliner
remarked:

I don't believe that absurdly low cost figure. In 1992 terms, the cost of
the full Piccadilly line extension, including the four stations, was
probably well over £250m, maybe closer to £500m.

If you don't accept the contemporaneous figure of £26m build cost when
it opened, then other discussion is futile. Can you come up with a
better figure from the archives - if you do we can resume talking about
the return on investment.
--
Roland Perry