10 December 2008

Statement & Subject Debate: Strategic Transport Projects Review

Scottish Parliament

Wednesday 10 December 2008

[THE PRESIDING OFFICER opened the meeting at 14:00]

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Strategic Transport Projects Review


The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):

I am pleased to announce today the conclusions of the strategic transport projects review, which sets out the future investment programme for transport in Scotland over the next 20 years—the most structured and ambitious Scottish transport plan ever published.

I bring this nationwide programme to Parliament at a time when we are seeing turbulence affecting major economies and global markets. Scotland is not immune to that. The Government's central purpose of increasing sustainable economic growth is well articulated in "The Government Economic Strategy" and we are absolutely clear about the importance of infrastructure in delivering that growth.

I am, nonetheless, clear that vision and ambition are not enough. It is good government to construct a clear and sustainable pathway to the future, it is good government to make that journey as smooth as possible, and it is good government to ensure that we take everyone with us. That is what we are doing through sound and efficient governance and a prudent approach to investment of finite resources to ensure that we get the optimum return for every pound that is invested.

This Government continues to invest in transport, with announcements just last week of additional capital spending in the current year to deliver projects including the A96 Fochabers bypass and key interventions on the A9, including improvements at Moy, Carrbridge and Bankfoot. Further funding will be brought forward in 2009-10 to ensure that those projects are carried through. However, as John Swinney made clear, there will be a corresponding reduction in the budget for 2010-11. Our current capital plans support record levels of investment in our railways, which includes work on the delivery of the Borders railway and the Glasgow airport rail link. The plans that I will set out today clearly identify where we as a Government see the priorities for investment against the background of increasing pressure on our budget.

Our continuing investment in major transport projects is helping our hard-pressed construction industry now by creating hundreds of much-needed construction jobs. After decades of waiting and years of uncertainty, it is this Administration that is delivering completion of the M74. After generations of Labour, Liberal Democrat and Conservative government in Scotland, the difference is clear: they talked, we are delivering. [Applause.]

The Government already has an ambitious programme of transport projects, including the Airdrie to Bathgate rail improvements, the recently opened Clackmannanshire bridge, M74 completion, the Glasgow airport rail link and our continuing support for the Borders railway. We are also making progress on other projects, including the Aberdeen western peripheral route, and we will shortly announce the second national planning framework, which will set out the national schemes that will contribute to our purpose.

Transport Scotland's current investment programme is delivering more than 40 major projects to enhance and improve the national strategic road network serving our cities, communities and centres of economic activity throughout Scotland. In addition to those that I have already set out, the programme includes projects such as Pulpit Rock on the A82, the Raith interchange on the M74 and dualling of the A90 from Balmedie to Tipperty.

The strategic transport projects review is the first nationwide multimodal evidence-based appraisal of Scotland's transport system as it stands and as it is forecast to develop over the next 20 years. It is at the leading edge of transport planning at national level and undertakes an orderly assessment of the strategic transport corridors that cover Scotland. It considers predicted changes in areas such as land-use, population, economic performance and emissions in order to address our objectives of improving journey times and journey reliability and quality, and of reducing carbon emissions in line with our climate change objectives. The challenge that faces Scotland's strategic transport networks over the coming years is to adapt to those competing pressures within a finite budget, while improving the levels of service that we expect of a dynamic and modern country that is focused on growth.

The STPR has considered many options to address those nationally significant issues, including many projects that are promoted by stakeholders across Scotland. On proposals that will contribute to our objectives at regional or local level, the STPR has identified those that should be owned and promoted by the Government, and has made it clear where other delivery partners such as local authorities and regional transport partnerships are best placed to lead. In some cases, we will work with local partners to deliver the schemes.

The programme complements the Scottish Government's current and continuing investment in maintaining the trunk road network and in ensuring that train services are further developed by means of the high-level output specification.

The package of schemes that are recommended by the STPR covers all Scotland, from improvements on the A75 and A77 to the Loch Ryan ports, via railway enhancements across the network and safety improvements in the north of Scotland. The schemes include significant projects such as the Forth replacement crossing and railway improvements between Edinburgh and Glasgow, on the Highland main line and for Aberdeen and Inverness.

In total, 29 schemes are recommended within a hierarchy of, firstly, maintaining and safely operating our transport network; secondly, optimising the use of those networks; and, finally, where there are identified gaps, considering targeted infrastructure improvements. The hierarchy emerges from the national transport strategy that was put in place by our predecessors in 2006.

Our high-level modelling suggests that, taken together, the overall package of schemes could—compared with business as usual—cut between 100,000 and 150,000 tonnes of CO2 equivalent per year, which would help us to meet our climate change commitments. By focusing on the hierarchy for delivery, and with the emphasis on public transport, we are leading the way in making sustainable transport more attractive.

The financial climate in which we are working has materially changed. External factors that are outwith the Government's control will have an impact on how and when we can deliver on the infrastructure investment that the country needs. There is continuing uncertainty in the financial markets, and the cost of borrowing and the availability of funds are fluctuating daily.

We now have to deal with the practical implications for budgeting of changes in United Kingdom Government accounting practices, which will have a significant impact on the capital cover that is available for our major transport investments. Our investments will all be undertaken in an environment in which the Government accounts will conform to the international financial reporting standards. That will mean that almost all infrastructure projects—including private finance initiative and public-private partnership schemes—will come on balance sheet.

Following the Chancellor of the Exchequer's pre-budget report on 24 November, there are projected cuts in future budgets—approximately £1 billion of cuts to Scotland's budget in 2010-11 and 2011-12. For the sake of the people and public services of Scotland, all members in the chamber should unite in resisting those Westminster cuts.

Given the urgency of timing and its central importance to the economic wellbeing of the whole nation, the Forth replacement crossing will, until it is open in 2016, dominate our investment programme. We have approached the Treasury about mechanisms to secure budgetary cover for the unique investment of the Forth replacement crossing by reprofiling our capital budget over the next 20 years. Such cover would not mean that the Treasury would pay for the new crossing, but that there would be an increased capital budget during the years in which we will be paying for the crossing so that other important investments can proceed at the same time. Capital budgets in later years would be correspondingly reduced.

In circumstances in which capital investment is at a premium, it becomes even more important that we secure maximum value for the public purse from the resources that are available. That underlines the importance of the Scottish Futures Trust as a centre of expertise and project collaboration in helping the Government to maximise the value and effectiveness of our infrastructure spending by releasing every year up to £150 million of extra investment in the fabric of Scotland's public services.

The STPR is about providing a robust framework of schemes, the delivery of which will be prioritised in each spending review. I will, of course, keep Parliament updated on progress. Members might wish to reflect on how much more satisfactory it would be if this Parliament had full financial and borrowing powers so that we could make these decisions for ourselves, in the best interests of Scotland.

Improving rail connections between Edinburgh and Glasgow will provide more and faster services that will run more frequently and will have increased capacity. By 2016, services will have increased from five or six per hour to 13 per hour. In addition, a new suite of services will be defined by significantly quicker journey times between Edinburgh and Glasgow; the journey time between the two cities will be reduced by about 30 per cent to around 35 minutes. Transport Scotland is progressing the programme through working with Network Rail and First ScotRail. Feasibility studies are complete and contracts to take the project through to design development are on schedule to be in place by the end of this month.

In addition to service improvements, the project will involve the construction of a new railway station that will be designed to integrate with the Edinburgh tram network, which will provide onward connection for passengers who use Edinburgh airport. That facility will provide a much-needed improvement in public transport access to the airport and the surrounding areas. The station will be situated on the Fife railway line to the north of the A8 Gyle roundabout. Outline design is under way, and it is planned that the station will be completed in time for the opening of the Edinburgh tram network in 2011. Transport Scotland is working closely with the tram project team to produce the best possible link for passengers between the railway and the tram network, which will provide an easy and effective interchange for passengers.

However, our investment in rail is not limited to the central belt—we are committed to improving connections across Scotland for business, commuters and leisure travellers alike. Feasibility work for the Highland main line is under way, with the aim of providing a faster and more frequent service between Inverness and Glasgow and Edinburgh, via Perth, by reducing existing journey times by up to 30 minutes.

Transport Scotland continues to invest in our rail network through the high-level output specification. Work is already under way to develop the HLOS for the next period—2014 to 2019—and the STPR's recommendations will play an important role in that.

When there is investment in rail projects, not only are we moving on our climate change commitments, but the use of the regulated asset base allows us to keep that investment within the overall scope of our payment to Network Rail and off the Government's balance sheet.

The Cabinet Secretary for Finance and Sustainable Growth announced last year our plans for securing the future of cross-Forth travel and undertook to set out during 2008 how we would promote and fund the new crossing. The condition of the existing bridge continues to deteriorate. Inspections continue on the cables and although the existing bridge, which opened in 1964, may be deteriorating less rapidly than was previously thought, it is clearly not certain that it will provide a reliable and resilient crossing for the current weight of traffic. Safeguarding that vital connection in Scotland's transport network remains absolutely essential to the nation's economy, so providing alternatives to car use for travellers across the Forth has been central to our strategy for the replacement crossing.

Updated findings from the Forth Estuary Transport Authority have allowed us to consider the future of the existing bridge. We have concluded that it can be retained, alongside the new bridge, as a dedicated public-transport crossing as part of a managed crossing strategy. Sustainable public transport will be given priority on a dedicated public transport corridor across the existing bridge, with the option in the future to convert the existing bridge for light rapid transit, trams or guided buses. The existing bridge will continue to provide access for pedestrians and cyclists.

A narrower design for the replacement crossing is therefore possible, which will help to reduce the carbon footprint of its construction. Implementation of that strategy will provide an immediate boost to public transport infrastructure, but with less environmental impact and at significantly less cost. It will protect and enhance the economies of Fife, Edinburgh and the east coast of Scotland as it will create new opportunities for sustainable economic growth.

The Government set the project team a challenging and demanding target of designing a scheme that will provide value for money, realise savings wherever possible and make the most efficient use of existing resources. The strategy that I have set out today delivers against each of those elements. I am delighted to announce a saving of around £1.7 billion in the project cost estimate, which is now between £1.72 billion and £2.34 billion. Of course, included in that cost is £100 million to £200 million that will be handed over to the UK Exchequer as VAT.

Work throughout 2008 to assess possible financial and procurement routes to deliver this huge project has been thorough and comprehensive, and has been set against the reality of the new international financial reporting standards, which bring infrastructure contracts on balance sheet. Officials have worked with experienced advisors on contract strategies, and that work has pointed us to the best form of contract for the project. To explore the opportunity for off-balance-sheet treatment, we have examined contract strategies ranging from conventional design and build contracts, through non-profit-distributing design, build, finance and operate concessions, to innovative long-term leasing options. As a consequence of that work and that reality, the Forth replacement crossing will be publicly funded and will be procured through a conventional design and build contract. That will deliver best value for money and the certainty of delivering the replacement crossing by 2016.

The Forth replacement crossing will be promoted through a parliamentary bill that will be introduced to Parliament late next year. I can also announce to Parliament that, under an SNP Government, the new Forth bridge will be toll-free.

I understand the keen interest in the design of the replacement crossing, and my officials continue to work closely with Architecture and Design Scotland to develop a bridge that will not only improve operational flexibility and provide greater reliability for all, but will enhance what is an iconic vista. Continuing our commitment to engage with local communities, we have arranged a full programme of supporting public information exhibitions for the new year.

The project is of a scale that is unprecedented in recent times in Scotland and will form a massive part of our infrastructure programme. Our strategy, which is economically sound and provides value for money, meets every requirement and maximises use of our existing assets. We remain on target both to achieve the 2016 opening date that we are committed to, and to deliver the substantial cost savings that I have reported today.

I have set out our immediate priorities for transport, which balance investment between road and rail. The whole of Scotland will benefit from nationwide packages that will enhance the road and rail networks for all travellers and users. Schemes include reconfiguration of our national rail timetable and measures to improve the attractiveness of public transport by, for example, introducing a strategy of park-and-choose sites serving the following: Aberdeen at Dyce and Charleston; Dundee; Edinburgh at Pitreavie and Halbeath; and Glasgow at Bargeddie, Fullarton and Bannockburn.

We have made clear our belief that providing quality public transport alternatives to the private car encourages responsible modal choice. To further that aim, we will bring forward schemes to build on the Edinburgh to Glasgow rail improvements, including detailed signalling changes to manage the network better and changes to junctions in order to improve capacity. Rail services between Edinburgh and West Calder, Newcraighall, Dunbar, Cowdenbeath and Kirkcaldy will be improved, the Haymarket interchange will be upgraded, and a national integrated ticketing scheme will be introduced to support services.

In the west of Scotland, there will be a step change in strategic rail enhancements not only to meet predicted future demand and capacity constraints within Glasgow, but to increase public transport access to areas of economic activity and key public services such as the new Southern general hospital. Those enhancements, which include the possible development of a metro or light rapid transit network across Glasgow, will also allow improved rail connections with Ayrshire and Inverclyde through additional platform capacity in Glasgow and additional parking at stations including Ayr, Prestwick, Troon, Glengarnock and Kilwinning. Links to the Loch Ryan ports will continue to attract investment along the A75 and the A77 and, for key freight routes across Scotland, there will be specific measures on the west coast main line to lengthen passing loops, improve the loading gauge and increase freight terminal capacity.

In the central belt, the continued growth and success of the cities of Glasgow, Edinburgh, Perth and Dundee will be supported by intelligent transport systems on the M8, the M90, the A720 and the motorway approaches to Glasgow, and by active traffic management to manage pressures on the links between these cities. Improved access to the port of Grangemouth will include the upgrade of the A801 between the M9 and M8.

Allied to all that is the ability to make significant economic progress by reducing journey times between all of our cities. Although for Dundee, Aberdeen and Inverness, work towards that aim will be led by investment in the rail network, it will be complemented by road safety improvements in targeted locations.

Moreover, after years of talk and no action under previous Administrations, and for the first time in any Scottish transport strategy, we have included in the STPR our intention to improve the A9 to dual-carriageway standard between Perth and Inverness. Improvements to the A96 will include upgrading the road to dual carriageway between the A9 and Nairn, with a new connection between the A9 and the A96 to provide relief for the Raigmore interchange. Other improvements to the A96 will include a long-overdue new Inveramsay bridge.

Promotion of solidarity and cohesion—key roles within our economic strategy—will be delivered by route improvements and safety measures, where required, across the west and north of the country on strategic routes including the A82, A835, A9, A90, A96 and A830. Targeted road congestion-relief measures will also be introduced, including upgrading the A77 to dual carriageway around Ayr, introducing bypasses at communities such as Dalry and Nairn, and junction improvements at key points such as Sheriffhall. Together, those schemes will make a major contribution to the principle of providing "sustainable, integrated and cost effective public transport alternatives to the private car, connecting people, places and work, across Scotland".

Since coming to power last year, we have applied the greatest possible impetus to progressing the Forth replacement crossing. Even with that effort, building on planning that commenced in 2005, construction will start only in 2011, which illustrates the time that is needed to deliver major transport projects from inception to construction.

The STPR has been developed in close consultation between officials, recognising the key links between transport, planning and climate change. That has ensured that a common strategic agenda has been found across the national planning framework and the STPR, and that the recommendations that have been made are mindful of our commitment to reducing emissions. I anticipate that, after consideration by Parliament, the national planning framework will be approved by Scottish ministers and published in spring 2009. To ensure effective delivery, the STPR and NPF teams will take forward an action programme with key delivery bodies in the new year.

We are keenly aware of the challenge that is posed by climate change and of the need to reduce emissions from Scotland. Our ambition to play a leading role internationally is reflected in our Climate Change (Scotland) Bill, which was introduced to Parliament last week. The bill represents the most ambitious climate change legislation anywhere in the world. The targets that it sets will drive new thinking, new solutions and new technologies, and will put Scotland at the forefront of international action to move the world along the path to a sustainable low-carbon economy.

The imperative of reducing emissions has featured large in the consideration that has been given to the options for crossing the Forth, and to the package of interventions that have arisen from the STPR. The carbon emissions that will be associated with construction of the Forth crossing strategy are now significantly less than those for the earlier option.

In the case of the STPR, the majority of the interventions involve improvements to the public transport infrastructure, thereby facilitating the shift from car-based travel to bus and rail. Although those outcomes are welcome—with the potential to reduce emissions by more than 100,000 tonnes—we acknowledge that much more needs to be done. In particular, we shall continue to give early priority to interventions that improve safety.

We are on track with the delivery of the Forth replacement crossing and, in addition to the investment that we are making in transport in the current programme, the STPR provides the robust evidence base to plan for the future of Scotland.

In the current financial climate, we, as a Government that is committed to delivering for the people of Scotland, must ensure that our approach is ambitious, yet accountable and achievable. As we deliver this ambitious programme, we will take the right decisions for the future of all Scotland.


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