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SPECIAL REPORT: TRANSPORT & INFRASTRUCTURE High Speed Rail to Heathrow The national debates dictating the region’s economic future Answers amid uncertainty Key North East issues from road upgrades to bus route politics Oilng the wheels of progress Business success stories and positive investments


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CONTENTS

CONTACTS

04 news

room501 ltd Christopher March Managing Director e: chris@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk George Cheung e: george@room501.co.uk Euan Underwood e: euan@room501.co.uk

Latest headlines from the transport and infrastructure sector

12 at a crossroads Focus on the key issues affecting the North East’s transport systems

18 bright outlook Fergusons Transport’s Alan Ferguson looks to the future optimistically

22 rail track revamp Behind the scenes of the Tyne & Wear Metro upgrade project

28 bumpy ride The inside track on the region’s battle for bus route clarity

36 port’s promise Port of Tyne looks back on a period of marked success and development

40 flighty ambitions Newcastle International Airport’s skyhigh plans for growth

44 driving ahead Executive chauffering boss talks to BQ about its recent successes

growing at a rate of knots

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SPECIAL REPORT:

TRANSPORT & INFRASTRUCTURE

WELCOME Transport and infrastructure are hot topics. Debate rages over the questions of High Speed Rail and whether or not Heathrow should have a third runway – both of which incidentally are matters of concern to the North East. More directly affecting us are the perennial question of the upgrading of the A1 – to motorway in the south of the region and, more modestly, to dual carriageway in Northumberland. The Metro system is undergoing huge investment at the moment and there is fierce debate over the way in which the bus services in Tyne and Wear are run. In this issue of BQ2 we examine these questions as they relate to the region as well as profiling some of the key businesses and organisations in the sector and taking a look at the issues and challenges they face. We hope this issue of BQ2 will stimulate debate on our transport and infrastructure needs and focus minds. The importance of the questions raised cannot be understated, for what American Civil War general Nathan Bedford Forrest said about war, is perhaps just as true about business: it’s all a question of “getting there the firstest with the mostest’’.

EditorIAL Peter Jackson e: p.jackson77@btinternet.com Andrew Mernin e: andrewm@room501.co.uk Design & production room501 e: studio@room501.co.uk Photography Chris Auld e: chris@chrisauldphotography.com Kevin Gibson e: info@kgphotography.co.uk advertising For advertising call 0191 537 5720 or email sales@bq-magazine.co.uk

room501 Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2012 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, November 2012. room501 publishing Ltd is part of Business & Enterprise Group, the UK’s market leading business improvement specialist. www.business-enterprise.net

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BQ Magazine is published quarterly by room501 Ltd.

SPECIAL REPORT | AUTUMN 12


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Motorbike business gets revved up, Essex firm heads north, time to drive down costs, campaign launched amid civil unrest, home improvements for Pacifica, and people’s champion named

New backing: From left, Stephen Slater of RMT, Natalia Blagburn of Rivers, and Andrew Richardson and Zoe Farrington of REALRIDER

>> Biker firm accelerates An online networking platform aimed at the UK’s 1.5m motorbike riders and enthusiasts is fully revved up after securing a substantial six-figure investment in support of its development and launch. REALRIDER is a dedicated motorcycle community with safety features that provides an exclusive web and mobile network where riders can meet other riders, explore new routes, and share experiences through videos, photos and chat in real-time and by location. Users will be able to instantly share things they’ve witnessed while out riding, such as potential road hazards or traffic conditions on their favourite routes, and will also have access to an emergency location finding service that uses GPS and WiFi technology to help find riders in distress. The concept has been developed by Newcastle-based management team Andrew Richardson and Zoe Farrington, who have  produced award-winning road safety, education, training and publicity work for clients in and around the motorcycle industry for over a decade. Richardson and Farrington worked closely for more than a year with Stephen Slater, director at RMT Accountants & Business Advisors, to refine the REALRIDER business

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model and prepare the new service for its launch. They report that one of the industry’s leading names has now signed up to REALRIDER, and other big name manufacturers are showing strong interest at this early stage. Organisations such as the British Motorcycle Federation, Motorcycle Industry Association and the Highways Agency are showing support, and more are expected to follow suit soon. To help prepare for and carry out its launch, REALRIDER has completed a £285,000 Angel-led seed investment round with the support of Rivers Capital Partners, which manages the £7.5m Finance For Business North East Angel Fund. Each REALRIDER member will have their own online ‘garage’ in which they can add their current bike or a timeline of bikes they’ve owned. REALRIDER then adds manufacturers’ product information, images, videos and instruction manuals creating a collection of nostalgic memorabilia or simply useful bike-related information. The service is designed for motorcyclists of every description, from scooter riders to Harley Davidson enthusiasts and everything in between. Richardson said: “We had the idea for REALRIDER many years ago, and now that technology has caught up with what we wanted to do, we’re ready to launch what will be the motorcycling industry’s most comprehensive and interactive community. “We carried out more than 18 months’ research within the biker community before starting to look for outside investment to ensure that the concept would live up to what riders said they were looking for. “We’re confident that we’ve delivered something that’s going to be immensely appealing to a very wide audience.”

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>> Wearside welcome A thriving engineering company is turning to Sunderland as it gears up for growth, in a move that could bring up to 60 jobs to the city. AJ Woods Engineering, headquartered in Essex, specialises in complex offshore structures for the renewable, oil and gas industries. The company has announced that it will set up offices, stores and workshops at a facility in the Port of Sunderland, allowing it to tap into the high demand from both existing clients and companies looking for services in the North East. The decision to have a presence in Sunderland was made after the business spotted opportunities to be part of the construction and maintenance supply chain linked to the offshore renewable energy sector. AJ Woods Engineering, which is currently carrying out its main operations from a temporary site in Durham, and a workshop and offices at the Port of Sunderland is now able to carry out large scale ship mobilisations. The company has the ability to carry out mobilisations on all types of vessels ranging from small wind farm support vessels to cable laying ships and large jack up barges. Robert Day, business development manager at AJ Woods Engineering, said the addition of their Sunderland facility represented an important step forward for the company. He said: “The company is pleased to be associated with the Port of Sunderland, who together with Sunderland City Council, have been extremely helpful - we are looking forward to a mutually beneficial long term working relationship, with what we consider to be a very forward-thinking city. “The area is ideally situated for our expansion plans, due to its strategic location and I’ve had the pleasure of being able to see firsthand the highly skilled pool of local labour available in the North East, which means the choice to employ locally is not only an easy decision but it’s an exciting and rewarding prospect.” The expansion at Port of Sunderland will allow

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AJ Woods Engineering to develop its plans to offer a full package service to the marine and energy service and to work in close proximity of both existing and new clients in the North East, with the hope of employing some 60 members of staff as the business grows.

>> Driving down costs Inefficient driving costs UK motorists almost £7bn in wasted fuel every year – with those in the North East paying £284m of that, new research from the Energy Saving Trust has found. Drivers could save an average of £270 each, or 20p of every litre spent on petrol and diesel, by simply following a range of simple smarter driving tips. The fuel saved in the North East alone would fill the largest cargo ship in the world more than twice over, or 517 Olympic swimming pools. Energy Saving Trust has launched Fuel Your Passion, a three-month campaign to inspire drivers to save money behind the wheel and cut the amount of carbon dioxide their vehicle emits. A new online app will accompany the campaign, and show the goodies motorists could buy with the cash they will be saving. Tim Anderson, senior knowledge manager - transport, of the Energy Saving Trust, said: “Smarter driving techniques are easy to adopt, but can make a huge difference at the pumps – which is more important than ever in these tough economic times. “Anticipating road conditions and driving more smoothly, shifting up gears early and turning off a car’s engine at traffic lights all make a massive difference. In fact, if every driver in the North East adopted the Energy Saving Trust’s tactics they could save around £270 a year. “Motorists who take simple steps to change the way they drive will soon see a return on their investment. They can use the money they save to buy designer jeans, pay for a trip to the cinema or even save towards a holiday – which everyone would agree are far better uses for the cash in their wallet.

TRANSPORT & INFRASTRUCTURE

Energy Saving Trust’s top smarter driving tips include: • Drive smoothly – avoid heavy acceleration and braking. • Slow down – travelling at 70mph instead of 85mph on the motorway can save around £20 a year. • Shift up gears early, between 2,000 and 2,500rpm. • Keep tyres correctly inflated – could save around £31 a year.zzzz• Turn air conditioning off – could save around £77 a year. • Turn off your engine if you expect to be stopped for more than a minute. • Remove roof racks and roof boxes to cut drag – could save around £3 a year. • Avoid carrying dead weight – remove unnecessary clutter from your car.

>> Action amid civil unrest The North East’s civil engineering industry is mounting a campaign to have the decline of infrastructure in the region reversed by “more realistic” state investment. Members of the industry’s three bodies have the support of Iain Wright the Shadow Minister for Competitiveness and Enterprise, and MP for Hartlepool. He said: “If the Government is serious about rebalancing the UK economy towards manufacturing it must have the North East at its centre. “And to realise our huge potential, investment in infrastructure must be an urgent priority.” He recalls how civil engineering was at the heart of the North East’s outstanding contribution to the nation’s development in Victorian times. Even in 1966, he says, when England’s footballers won the World Cup, the North East was an above national average net contributor to the economy in gross value added. “Now the North East economy constitutes only four fifths of the UK average with only Wales worse. I don’t think it has to be like this. I strongly believe we’ve a great future, and civil engineers must be at the heart of both the regional and the national economy,” he said. He was keynote speaker at a seminar recently held in Billingham by the Civil Engineering

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Contractors’ Association (North East) – CECA (NE) - the Institution of Civil Engineers, and the Association of Consultancy and Engineering. While he accepted that infrastructure’s emphasis will be on areas of high population density and higher wages, he pointed out: “Whereas some 80% of capital spend on transport infrastructure is going to London and the South East, only 6% is earmarked for the North. The North South divide widens. Our competitiveness slips away.” Without a re-apportionment of public funds by the Government, he feared the North East would be hurt even more at the sharp end of spending cuts proposed: 41% on rail, 38% on neighbourhoods and regeneration, 18% plus on roads, and 16% on further education. He said the North East’s position was ironic given its leading part presently in giving Britain competitive advantage as being the regional pacemaker in exporting. Even higher exporting, he suggested, would require better transport communication for speed of delivery.

Royal honours: David Robinson, Group CEO, awarding Denis Murphy, Security Manager, an Elizabeth II Diamond Jubilee Medal

>> Harbour medal haul Nine Harbour Police serving the Ports of Teesport and Hartlepool have been awarded the Queen Elizabeth II Diamond Jubilee Medal. The commemorative medal, created to mark the 60th anniversary of the accession to the throne of HM the Queen, was presented to the Harbour Police by PD Ports’ chief executive Officer, David Robinson, in July. The Harbour Police presented with the award included: PD Ports’ security >>

SPECIAL REPORT | AUTUMN 12


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manager, Denis Murphy, Sergeants Jim Bone, Paul Grainge and Mark Hardy, and Constables Mick Robinson, Dave Scott, Tom Taylor, Stuart Bradley, Kath Sykes, Sharon Lewis and Tony Parkes. During the presentation ceremony, which took place at PD Ports’ Middlesbrough based headquarters, Mr Robinson expressed his appreciation for the hard work and dedication of the Harbour Police. He said: “Our Harbour Police Force plays a vital role in making sure the port environment and all our personnel and visitors are as safe and secure as possible. I am delighted to present the team with the Diamond Jubilee medal to mark the 60th anniversary of Her Majesty the Queen.” All Harbour Police officers in paid service on 6 February 2012, who had completed five full calendar years’ service, and were properly attested on or prior to 7 February 2007 were eligible to receive the HM Diamond Jubilee Medal.

>> Forging new links Flights to Europe’s leading oil centre, Aberdeen, are being expanded from Newcastle Airport with Eastern Airways introducing more flights to meet the needs of business travellers and the offshore industry. The UK regional airline, which has provided services to Aberdeen from Newcastle since 2003, is increasing weekday services from four to five flights a day. During the week a 50 seat Embraer 145 jet will also be introduced to peak flights.  Eastern Airways’ additional flights will mean an extra 1,700 seats a month on the route.  From Newcastle after the 6.45am departure for Aberdeen, there will be a new 8.30am departure northbound Monday to Wednesday along with 5pm and 7.10pm services leaving Newcastle Wednesday to Friday. Departing from Aberdeen there will now be a new 5.45pm departure from Monday to Friday and additional 3.45pm and 4.45pm departures on Thursdays, which is traditionally one of the busiest days for southbound flights to Newcastle. This allows for hourly Thursday departures from mid afternoon to early evening. 

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The North East has had strong connections with Aberdeen, which is regarded as Europe’s energy capital within the buoyant offshore oil industry. “We’ve played a major role supporting the North Sea offshore industry with vital transport links for many years,” said Kay Ryan, Eastern Airways’ commercial director. “Our latest expansion of services from Newcastle demonstrates our continued commitment to providing the best business schedules for North East offshore workers and business commuters heading to Aberdeen. “The level of high frequency services at convenient times offers superb flexibility, while our 50 seat jet will also operate on peak flights during the week.” Joanne Leng MBE, deputy chief executive, NOF Energy, said: “It’s fantastic news that Eastern Airways is increasing the frequency of their flights from Newcastle to Aberdeen. “I am sure those involved in the oil and gas sector in both regions will find the additional routes of benefit.  “Both Aberdeen and North East England are key hubs for the UK oil and gas market and it is essential that we make moving between the two centres as easy as possible. “In the long term it benefits both regional economies and ensures that supply chain companies continue to have access to new business opportunities by being able to reach and service their client base quickly.” Services to Birmingham, Cardiff and Stavanger in Norway are also provided by Eastern Airways from Newcastle Airport and supported by its team of 50 locally based pilots, engineers and cabin crew.   The airline has a fleet of 30 aircraft flying from 21 airports across the UK, Norway, Belgium and France.

>> Port sales boost A family business is shipshape, after enjoying a year of increased sales at a North East port. Gibbons International, a 91 year old business, has seen sales soar since bosses at the Port of Sunderland started work on attracting new and renewables firms to the

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site. The company, which last year saw its turnover increase by more than 35% to £2.5m, is expected to maintain its strong sales performance this year. Ian Gibbons, chief executive of the company and the third generation of his family to take the reins, said that the upsurge in business had been a real boost, and he praised the leadership team at the port for their hard work in growing Sunderland’s reputation among firms in the new and renewables sector, particularly offshore wind companies. He said: “Five or six years ago, seeing large cargo ships stopping off at the port would have been something of a novelty. “Nowadays, we’re seeing an increasing number of marine vessels stopping off at Corporation Quay and this has meant that ad hoc orders have significantly increased. Within the last year, our business has seen the biggest supply order in its history, and we’ve been able to really see off the competition – we’re now the only shipping chandler in the North East, with no competitors anywhere north of Hull.” The business - which currently employs a team of 14 - supplies food, hardware and duty-free products to shipping vessels in the North East as well as Aberdeen and the South coast. The recent surge in business is something Gibbons expects to continue. Recent developments, including work by Subsea Seven - a multi-national offshore exploration and cable laying company - to demobilise its large cable and pipe laying vessels at the port, has helped Gibbons International to secure major orders which have provided a welcome boost to the firm’s bottom line. Gibbons added: “We’ve seen a real increase in traffic at the port and our business is benefitting from the growing number of firms operating in the offshore field that are choosing Port of Sunderland as a base. “It’s a really exciting prospect for us. “There really is a feeling of genuine change at the port, and that can only be positive for a business like ours.”

TRANSPORT & INFRASTRUCTURE


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The Team Oman, a cable installation vessel available for use in the offshore wind industry, is one of the recent visitors to the port, which is hoping to capitalise on its natural assets as well as its strong location for the Round Three Offshore Wind Development Zones.

>> Home improvements Electrical repair, warranty and servicing company Pacifica Group has preserved almost 60 jobs and expanded the size of its operations with the acquisition of a home delivery specialist. County Durham-based Pacifica has bought West Yorkshire’s Hi Way Express Home Delivery from the administrators of Hi Group which will help the North East company towards its £20m annual turnover target for this year. Pacifica Group already operates a nationwide electrical appliance repair service under the 0800 Repair banner, as well as a series of support services including warranty and servicing. The company was named Fastest Growing Company of the Year in the Fastest 50 Awards in the North East in 2011 for its rapid and sustained expansion. The acquisition of Normanton-based Hi Way Express Home Delivery will enable Pacifica to add next-day appliance delivery to its services supplied to appliance manufacturers, retailers and online sellers. It also preserves the jobs of 56 staff directly employed by Hi Way Express Home Delivery and another 120 to 130 sub-contractors who carry out deliveries for the business. Kevin Brown, managing director of Pacifica Group, said: “This is a great acquisition for our business as it complements the services we currently offer and gives us nationwide, sevendays-a-week coverage.” Hi Way Express Home Delivery currently operates a fleet of 55 home delivery vehicles which make a total of between 700 and 800 deliveries a day. The company’s current clients include a range of manufacturers, retailers and e-commerce businesses supplying goods ranging from domestic electrical appliances to nursery equipment. Pacifica, which is based in Chesterle-Street, says the acquisition of >>

SPECIAL REPORT | AUTUMN 12

City leader: Councillor Paul Watson

>> Expansion ahead for regional port A North East port is hoping to expand following developments to its secondary river berth allowing it to broaden its service offer and add to its operational capacity. Port of Sunderland has invested in improvements to Greenwells Quay, its 220m river berth, to make it suitable for more activities, including offshore renewable energy, subsea, conventional and project cargo handling. The improvements to Greenwells Quay have included work to its road infrastructure allowing it to be used for activities meaning it can now be used for other activities than vessel lay-by. It is hoped that the developments to the port’s facilities could help further increase the number of commercial vessels coming into its docks. Councillor Paul Watson, leader of Sunderland City Council and chair of Port of Sunderland’s board, said: “Port of Sunderland implemented growth plans as part of the city’s economic masterplan in 2010, and, with the backing of the city council, we have seen significant investment that is already heralding results. The improvements we have made to the Greenwell’s Quay berth will, we believe, significantly increase the port’s earning potential, opening up more commercial opportunities and really maximising its natural assets. “Developments such as this, and of course the investment we made earlier this year in a £500,000 Liebherr crane for cargo handling, are helping us to build a really compelling case for the city, making it more attractive to businesses looking for a forward-thinking and highly capable port. “Work at Greenwells Quay will allow us to significantly increase both our berthing and cargo handling capacity and better serve our growing customer base. “Located just five minutes from open sea, and now offering a roll-out ‘ro-ro’ ramp, heavy lift crane pad and a load out quay for heavy lifts, it really does represent an exciting step forward for Port of Sunderland.” It is expected that, with added capacity for bulk cargo handling, the port will be able to further grow its customer-base. Already, there has been a significant increase in the number of commercial vessels using Port of Sunderland, with 450 vessels berthed at the port between April 1 2011 and March 31 2012, representing an 84% increase compared with 245 the year before. Coun. Watson added: “The increased business we are already beginning to see at Port of Sunderland is very encouraging, and we are confident that, with the improvements made to Greenwells Quay, we can build upon this and further cement Sunderland’s reputation as a progressive and responsive port.”

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Hi Way Express Home Delivery will enable the group to provide a complete after-sales service to clients. Kevin Brown said: “We can now offer everything from the moment a customer places an order – delivery to their door, warranty and service and repair should the appliance break down. Law firm Ward Hadaway provided legal advice to Pacifica on the acquisition. Partner Mark Whitehead said: “We are delighted to have helped Pacifica on this important strategic acquisition for the group. “Kevin and the team at Pacifica have built up a fantastic business which is already growing at a rapid rate and the addition of Hi Way Express Home Delivery looks set to accelerate this still further.”

The graduates: Darren Coleman and Anthony Paxton

>> Hard work pays off PD Ports’ employees, Anthony Paxton and Darren Coleman, have achieved first class honours in specialist engineering degrees at Teesside University. Paxton and Coleman, both based at PD Ports’ North East locations, have been working for four years on a part time basis to gain the qualification. Both joined PD Ports as apprentices some eight years ago and have continued to study within their chosen field of engineering throughout. Paxton works as engineering mobile plant superintendant at Teesport, the second largest container port in the North of the UK, and Coleman has been recently promoted to project engineer electrical working within the projects office at

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Vulcan Street, Middlesbrough. They are planning the next step in their chosen careers and begin the progression towards achieving full chartered engineering status as a member of IMechE (Institute of Mechanical Engineers) and IET (Institute of Engineering and Technology) respectively. Russ McCallion, PD Ports’ group human resources director, said: “We are delighted to see Anthony and Darren achieve first class honours in their degrees. At PD Ports we see the ongoing training and development of our people as critical to our long term success. Offering employees the opportunity to further their skills and knowledge base not only helps raise aspirations and increase motivation but it also ensures that our business is backed by a highly skilled and happy workforce. “Anthony and Darren have demonstrated how this commitment to training is embraced by our employees and achieving first class honours is a clear reflection of the hard work and dedication Anthony and Darren have given to their studies. Congratulations to them both.”

>> Onyx joins the jet set Edinburgh Airport has outsourced the management of its IT to Onyx Group in a five year, multi-million pound deal. In a first for the airport, Onyx Group will operate and manage its mission critical IT infrastructure, acting as an extension of the airport’s own IT team. Onyx will provide the full range of outsourced IT services including dual datacentre services, high speed resilient connectivity and cloud solutions. A key service that Onyx will also provide is 24/7 IT support. The 24/7 support provision is a key differentiator for the Group and is one of the reasons that helped it to win the contract. Providing a dual datacentre service was also a fundamental factor in being selected as the geographic diversity of Onyx Group’s network of data centres will add resilience to Edinburgh Airport’s IT infrastructure. “Securing the contract with Edinburgh Airport, Scotland’s busiest airport, is great news as it is a high profile client in the UK and also our first

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in the aviation market,” said Neil Stephenson, chief executive Onyx Group. “Scotland has been key to our growth strategy and it remains central to our plans as we continue to expand our Scotland-based clients across a range of industries.” “Outsourcing IT is becoming increasingly popular as companies across all industries realise the benefits it can provide. It’s cost effective, as there’s no need to worry about having the appropriate expertise and infrastructure in house, it’s secure and resilient so companies can focus on business objectives and not worry about IT and it provides flexibility as outsourced IT services can be scaled up or down to support the changing needs of businesses.” Graeme Agnew, head of IT at Edinburgh Airport, said: “This is an important announcement for Edinburgh Airport and represents the first of a number of major capital investments under new ownership. It is vital for us to have the IT capacity to support business growth, and the ability to implement the best technological solutions and quality of service for our passengers and airlines. We also wanted to place our IT systems in an Edinburgh facility. Onyx allows us to do all this and we’re excited to be working with them as we begin to change and improve technology services across our airport.”

Winner: PD Ports Group chief executive David Robinson (centre) accepts the Development of People award from CILT president Graham Inglis (left) and managing director & president of GKN Freight Services John M Gillam (right)

>> People’s champion The PD Ports Group has won the Development of People award from transport industry organisation the Chartered Institute of Logistics

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and Transport, CILT. The ports and logistics company was announced as the winner of the award at a ceremony held recently at the London Marriot Hotel. The award was presented to David Robinson, chief executive of PD Ports Group, by managing director and president of GKN Freight Services John M Gillam. Robinson said: “To win this prestigious award is a real honour. “We pride ourselves on our group wide training and development programmes, so are delighted that our efforts are being recognised by such a well respected organisation. “The programmes we have implemented over the last few years are designed to provide employment opportunities to the Teesside community, give everyone in the organisation the opportunity to develop and progress within the company and ensure our team have the tools they need to offer our customers the industry leading services they require. “PD Ports will continue to invest in its people to develop an industry leading team across its business platform to develop not only on Teesside but across its operational bases in the UK.”

>> Port offers helping hand The Port of Tyne is giving a £2,500 helping hand to a charity shop with a difference. The donation to Re-design 4 U, based in Fowler Street, South Shields, comes from the Port of Tyne Fund operated through the Community Foundation. Re-design 4 U offers person centred learning opportunities for people with learning difficulties to promote a sense of achievement and improve self esteem. Many of the items that are donated are up-cycled by a team of volunteers, creating products of better quality or a higher value. The proceeds generated by the sale of all items are put back into the enterprise and continue to make a positive impact by reducing waste and recycling unwanted clothing, ornaments and furniture. Rebecca James, trustee at Re-design 4 U, said:

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“The Port’s donation is a massive help to us as this money will help us to encourage adults with special needs to engage in a range of different activities from woodwork to arts and crafts.” Representing the Port of Tyne Community Foundation Fund Committee, Alasdair Kerr, commercial manager, said: “This is a really worthwhile project that helps a lot of people learn new skills and gain confidence in a working environment they wouldn’t otherwise

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have. It’s an innovative idea to use recycling to create new products for the shop – and it helps the environment as well, so it meets the Port of Tyne’s aims to enhance people’s chances to learn skills, find employment and to improve the environment.” For more information please visit www.redesign4u.co.uk And for more information on the Community Foundation please visit www.communityfoundation.org.uk

Going green with new fleet: Terry Appleyard, fleet and business specialist at Simon Bailes Peugeot in Stockton , hands over the keys to Dan Robinson, company chairman at Gus Robinson Developments

>> Cleaning up their act Two Teesside companies are working together to reduce fuel costs and CO2 emissions. Simon Bailes Peugeot in Stockton has supplied Hartlepool-based Gus Robinson Developments with 10 eco-friendly Peugeot Bipper vans which help to reduce fuel consumption. Fleet experts at Simon Bailes Peugeot worked closely with managers at Gus Robinson Developments to understand their fleet requirements and identify the most effective solution. Managers at Gus Robinson chose the Peugeot Bipper for its low running and maintenance costs, as well as lower emissions thanks to the use of ‘stop and start’ technology. This means that, when stationery, the van automatically switches off its engine, saving on fuel by up to 15%. Dan Robinson, company chairman at Gus Robinson Developments, said: “Our new vehicles will significantly reduce both our carbon footprint and our running costs.” Simon Bailes said: “Our fleet team worked with Gus Robinson Developments to assess exactly what was required to help them reduce their CO2 emissions in line with their environmental policy. It’s very encouraging to see high profile companies, like them, being so pro-active in their stance towards eco-driving and it was great to work with their team on finding the perfect solution which will offer reductions in both fuel consumption and harmful emissions.”

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OVERVIEW

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OVERVIEW

waiting at the crossroads While several major transport sector investments into the region will bring much needed jobs and wealth, a number of underlying uncertainties exist around our infrastructure, writes Peter Jackson Transport infrastructure is seldom out of the news at the moment. Whether it’s a debate about HS2, airport capacity in the South East or the price of fuel, questions about how we move ourselves and our goods about are fiercely debated. It has probably been the case since the Romans built the first roads but there is an urgency and intensity about the issue now that we are in particularly difficult economic times. An efficient and comprehensive transport system helps keep prices down and therefore makes the UK more competitive, hence the calls from business leaders and business organisations for investment in transport infrastructure. The recession also intensifies the issue because investment in transport is also seen as an ideal way of stimulating the economy. It has been calculated that every pound invested in infrastructure can deliver £4 in return, providing jobs as well as increasing competitiveness. The government’s economic policy and its public spending cuts will have a particularly severe impact on the North East where the public sector accounts for an unusually large share of the regional economy. While the manufacturing and exporting

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sectors in the region are performing relatively well, this rebalancing is bound to be a slow process and, in the short to medium term, is unlikely to be enough to counter the decline in the public sector. This is why a number of projects have been announced over the past couple of years and the North East region is benefiting from three of them. It was announced towards the end of 2011 by the Department for Transport that it would be backing Sunderland City Council’s £85.2m bid for a new bridge over the River Wear. This will link the Wessington Way, A1231 at Castletown on the north bank of the river with the European Way, B1405, at Pallion on the south bank. This will be an iconic landmark for the city as well as opening up key sites on the south bank for regeneration and will provide a vital link in the Sunderland Strategic Transport Corridor. It is estimated that it will bring 6,000 permanent and temporary jobs during and after construction. Then came the news that Hitachi was to locate its train manufacturing facility at Amazon Park, Newton Aycliffe. This followed the government’s announcement that it is to proceed with the Intercity Express

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Project and awarding IEP to the Hitachi-led Agility Trains consortium has been hailed as the most significant investment in the region since Nissan. At Amazon, a 450,000sq ft train assembly facility will be built on 31.5 acres. According to some estimates, the £4.4bn IEP contract will support nearly 4,000 jobs among direct suppliers with perhaps 3,000 more indirectly. It certainly means that the North East will become a centre of international importance for two of the major forms of transport – road and rail. A third major transport investment in the region – as we report elsewhere in this issue – is Metro: All Change, an 11-year £385m programme to renew and refurbish the entire Tyne Metro system, including the track, the structures, bridges, three viaducts, tunnels, stations and the trains. However, welcome though these projects undeniably are, they cannot alone compensate for the effects of credit crunch and recession. As things stand, by next year when the region’s construction output will have fallen four years running, we will have seen a 20% drop in jobs in the sector since 2008 – double the UK rate. The North East did not experience the 7% >>

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OVERVIEW

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recovery enjoyed by the industry as a whole during 2010. Rather it has seen a 41% year on year drop in orders, with a further decline of 9% or 10% expected over the next two years in its construction output. Meanwhile the South is reaping the benefits of The London Gateway ports and Thames Waterway projects, and the Thames Link and Crossrail railway developments. The latter alone at peak should generate up to £1.2bn worth of output, perhaps five or six times more than the North East’s entire current infrastructure figure. It is estimated that the North East’s investment on transport is only 70% of the UK average. An IPPR North think tank report has indicated that the government planned to spend £2,700 a head a year on infrastructure projects in London, compared with just £5 a head in the North. Even this includes the new motorway stretch between Leeming and Barton which has been claimed at government level as a North East investment although it’s in North Yorkshire. Some national transport and infrastructure investment would benefit the North East. In our interview with David Laws he makes it clear that more airport capacity in the South East would benefit regional airports such as Newcastle International. It would also be of obvious benefit to the region if HS2 were to go ahead, particularly as far as Newcastle.

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Unless we shout and shout loud, and our shouting is heard and acted upon, we will not survive

Finally, it remains a scandal that for much of its course through Northumberland the A1 remains single carriageway. Dualling the A1 seems unlikely to go ahead only on a basis of accident rates but if the Scots reject Alex Salmond’s siren calls to vote to leave the UK Westminster may well look for ways to knit England and Scotland together again. Road building could be the means. At the moment there is only one motorway into Scotland and that is on the west side. This seems a strong argument for dualling the A1 all the way to the Scottish border, especially as Scotland is already dualling it southwards, and particularly as Teesport is increasingly becoming the landing point for imports into the North and much of Scotland. A charge sometimes laid against the North East – not least by North Easterners themselves – is that the region too often plays the supplicant, going cap-in-hand to central government. There is very little merit in that argument and it is particularly nonsensical when looking at infrastructure, as

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the some of the figures quoted demonstrate. The projects that need to be undertaken may be in the region but they are national projects and need national support. They would contribute to national prosperity and are vital to the North East economy. In the words of Douglas Kell, director, Civil Engineering Contractors’ Association (North East): “The North East Region urgently needs its fair share of investment for infrastructure when government monies are allocated. It is not looking for more, just a fair share. “CECA (NE) believes this has not been the case for some time. If the situation does not change the North East industry will condense even further - to such a level it would be unable to meet demands if, at a later date, funding was forthcoming. “The labour force has reduced by 30% over the last few years with potentially a further reduction soon. It sounds bleak. But it is, and unless we shout and shout loud, and our shouting is heard and acted upon, we will not survive.” n

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GET SMART

Why go smarter to work makes business sense Businesses across Tyne and Wear are set for a boost after the Government announced it was investing £5m in the North East to make journeys to and from work easier and greener, following a successful funding bid from the Tyne and Wear Integrated Transport Authority (IT The funding, from the Department for Transport’s Local Sustainable Transport Fund, aims to remove potential barriers to employment, support economic growth and protect the environment across Tyne and Wear. The money will pay for a package of sustainable transport options targeted on employment areas near the A1 Western Bypass, the region’s most congested road, and will focus on Newcastle, Gateshead, Washington, Team Valley as well as the MetroCentre. The project will be called Go Smarter to Work and will complement an existing suite of measures aimed at parents, carers and young people called Go Smarter to School which is designed to cut congestion caused by the ‘school run’. Go Smarter to School recently celebrated its first anniversary and during that time has made a real difference to the daily journeys of hundreds of children, parents and carers through a range of projects including walk to school competitions or funding for new bike sheds. The projects’ high-profile backers include David Miliband MP and Olympic Gold Medalist Jonathan Edwards. Congestion has a negative effect on the region’s economy – productivity suffers when deliveries or workers are late because they are stuck in traffic - and the Government funded these business-related projects after the ITA demonstrated that straight-forward, sustainable measures can have a real economic pay-off during a time of recession. ITA Chair Cllr David Wood said: “This is great news for the travelling public and we can’t wait to begin our programme of simple and effective measures that will improve the lives

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of thousands of workers and their families. By making commuting easier we help improve productivity and will grow our economy and create jobs. “The Department for Transport recognised this bid’s strengths and saw that it will make a real impact on one of our region’s biggest problems. We are already making a difference to the ‘school run’, it’s now time to turn our attention to commuter congestion.”   Proposals include: • Improved infrastructure including bus priority lanes, pedestrian routes and cycle parking at Metro stations • Funding for smart phone applications and websites that provide reliable and up to date information about bus and Metro • Helping job seekers to pay for public transport and supporting scooter hire projects One company set to benefit from some of the £5m funding is teamvalleylinks.com Community Interest Company (CIC) which provides a personal travel planning service for

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those who travel to Team Valley. Peter Wignall, Project Director teamvalleylinks. com CIC, said: “It’s great Tyne and Wear ITA has got this money from central Government. It will mean the CIC can increase the scale of its current work, which involves helping as many people as possible get to Team Valley easily and emphasising to companies what a great place Team Valley is to do business in. All those who work, learn, visit or shop here will feel real benefits.” In addition to its work with commuters, employers and schools, the ITA is also currently working on a Better Bus Area Fund project to address delays to buses and to improve all aspects of the journey experience along key corridors across Tyne and Wear. At the time of the Transport minister Norman Baker said: “The scheme we are funding will improve life for people in Tyne and Wear and show that cutting carbon and boosting economic growth and opportunity can go hand in hand.” n To find out more about the Go Smarter project go to www.gosmarter.co.uk

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COMPANY PROFILE

AUTUMN 12

North East charged up to lead the way with Low Carbon Vehicles North East England and low carbon vehicles have become synonymous in recent years, with more than £250 million being invested in developing the region’s world-leading expertise. With one in three of the UK’s conventional cars currently being produced in the North East, a number of manufacturers, organisations and stakeholders have now stepped up to the mark to lead the transition to LCVs. Dr Colin Herron, managing director of Zero Carbon Futures, the organisation set up to oversee the growth of the LCV industry in North East England, explains why it’s so important for the region to be at the forefront of this pioneering sector: “There is a clear need for society to reduce carbon

BUSINESS QUARTER | AUTUMN 12

emissions, and the car and home are key in terms of how the public can play an active role in this.  Electric vehicles are not only vital for the environment, they’re also cheap to run - factors which are contributing to predictions that tens of thousands of new low carbon vehicles will be on the roads in the next few years.” Dr Herron says that this shift towards LCVs creates a clear opportunity for the North East to maximise the many assets that it already boasts – an automotive sector and a well-established supply chain worth £1 billion that is set to increase over the coming years in line with the demand for low carbon vehicles. “As home to Nissan’s Sunderland Plant, Sevcon and Smith Electric Vehicles, it is no wonder that

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the North East was recently named as the place in which people are most likely to consider owning an electric vehicle.” The region’s firm commitment to the introduction and adoption of electric vehicles (EVs) is already manifesting itself in a number of different ways.  The North East now has in place a comprehensive package that comprises manufacturing and battery development, the UK’s most integrated EV charge point infrastructure, R&D and training facilities, and a leading supply chain.  The sector is set to create new jobs and develop new skills and knowledge in the region and will underpin the North East’s current position as a major force in the low carbon industrial economy.

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The EV spotlight will be well and truly focused on North East England from 2013 when the Nissan LEAF goes into production, after the Sunderland plant secured investment to become one of only three sites worldwide to manufacture this revolutionary vehicle. In addition, the manufacturer is building an on-site battery plant

COMPANY PROFILE

to support the next generation of electric vehicles.  Dr Colin Herron adds: “All of the exciting developments that are coming to fruition now are the result of a huge amount of planning and partnership work that goes back several years. We believe that the North East has prepared and positioned itself to be a genuine international

leader in the low carbon vehicle economy. We are building relevant knowledge and skills within the workforce, the charging infrastructure is maturing nicely and we will soon be manufacturing the Nissan LEAF here. These are very exciting times for the region, in a sustainable and growing industry sector.”

Make EVs your business Once the realm of the tech savvy and environmentally conscious electric vehicles (EVs) are increasingly seen as an everyday mode of transport, offering many benefits to businesses and individuals alike. And as the industry grows, so do the benefits of utilising low carbon modes of transport. Leading car manufacturers including Nissan, Peugeot, Toyota, Vauxhall, Mitsubishi and Renault have all launched EVs. This growing market means that the cost of EVs is being driven down making purchasing or leasing these vehicles an even more attractive proposition with models on the market from around £13,000. Switching to EV, and therefore reducing CO2 emissions, brings with it significant benefit-inkind tax advantages for businesses. All EVs are exempt from company car tax for five years and businesses switching their fleet to EV can also benefit from 100% first-year capital allowance. Other tax benefits include road tax and fuel duty exemption. But it is the running costs that really speak for themselves. The cost of fully charging an EV is just £2.30 per 90 miles compared to fuelling a standard petrol or diesel engine car for the same journey at around £15.00. With a range of around 90 miles EVs are wellequipped to deal with the day-to-day transport needs of the majority of businesses, and since the North East is now home to almost 500 charging points in place at prime locations, EV drivers are never too far away from a charging post. Josey Wardle, project manager for Charge your Car, the organisation overseeing the development of a full EV charging network, says that the growing network is enhancing confidence in EV use by businesses and individuals alike: “Thanks to the fast growing network of charging points, more people than ever are able to both commute to and from work and conduct day to day

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Graham Baines of Unipres and Josey Wardle of Charge your Car

The North East is now home to almost 500 charging points in place at prime locations, EV drivers are never too far away from a charging post business in an electric vehicle.” One business that is already experiencing these benefits is Washington based Unipres, a car parts giant which produces steel components used to form the internal structure of cars made by leading automotive firms Nissan and Honda, including for the Nissan LEAF. As well as installing five charging posts at its premises, the company is currently trialling a fleet of five electric cars. Graham Baines, finance director at Unipres, said: “As a business that is part of the automotive supply chain, we have a vested interest in the success of the vehicles our customers are producing, and that increasingly includes EVs. We’re keen to not only show our support as a business, but also to encourage others to try EVs, and

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the trials currently underway at Unipres have been extremely positive. We’re committed, as a business, to reducing our carbon footprint and the work we’re doing with Charge your Car is allowing us to do just that.” Grants are currently available towards the installation of electric vehicle charge points at homes and premises through Charge your Car, the region’s Plugged in Places scheme. The project is funded by the Office for Low Emission Vehicles and regional partners.

For further information about electric vehicles and EV charging in North East England, visit www.whynotelectric.com

BUSINESS QUARTER | AUTUMN 12


INTERVIEW

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INTERVIEW

Hope on the horizon Road haulage is a barometer for the economy and has had a torrid time, but there are encouraging signs as Peter Jackson finds talking to Alan Ferguson It’s a mixed picture for the haulage industry, depending in which sector it operates according to Alan Ferguson, executive chairman of Fergusons Transport. Fortunately for his company, it is a major supplier for the region’s automotive sector, which is one area of the UK economy which is thriving, with increased investment and

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burgeoning overseas sales. During the downturn the company saw its annual turnover fall from £25m to £20m and profits have fallen from £1m to £100,000 over the past four years. But it has bought a 100,000sq ft unit in Washington to cope with Nissan’s growing inter-site deliveries and `just in time’ >>

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INTERVIEW

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and sequential delivery demands. It expects to handle more components for the Japanese manufacturer as it begins production of its new Juke model and the start of production of electric vehicles in 2013. On the back of the booming car sector Fergusons hopes to grow its 300-strong workforce by a tenth in the next 12 months. “The automotive sector seems to be one sector that’s doing okay,’’ says Ferguson. “The construction sector is more difficult. We work in both but more in the automotive. We are all just very nervous about Europe. “The main thing is that we have remained profitable throughout [the downturn] and that’s much more important than turnover, you need to have a bottom line.’’ Fergusons Transport was established by Matthew Ferguson in Blyth in 1926. Since then it has grown to be a national company with strategically placed depots, traffic and warehousing around the UK with a portfolio of regional, national and international customers. Over the years it has diversified into warehousing, logistics, removals, contract hire and business unit rentals. It has about 120 vehicles and 300 staff. It is looking to develop its £20m property portfolio, which includes Northumberland Business Park West where its HQ is based, as well as 50-acre and 15-acre sites in Sleekburn. It has also opened a 50-truck lock up off the A19 in Cramlington and a £3m investment in its self-storage arm. In these difficult economic times Ferguson welcomes a recent government move – an announcement by newly appointed Transport Secretary Patrick McLoughlin of a new annual charge for all trucks driving on British roads. While UK drivers will also pay this levy they will receive a corresponding road tax cut which will leave them no worse off so ending the disparity whereby UK hauliers paid to use roads on the Continent while their European competitors enjoyed free use of the UK’s highways network. “It’s something we have been asking for for some years just to level the playing field a bit,’’ says Ferguson. “What we were really asking for was some form of road user charge which is effectively

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The government should recognise the benefit we bring to the country by keeping goods moving and keeping the economy going rather than just trying to get money out of us

what they are trying to put in.’’ He points to the French system where motorway use is charged but fuel taxed less heavily. I think that’s a much fairer way of doing it,’’ he says. Fuel prices and duty still remain a big problem for the haulage industry. With lorries achieving perhaps nine or 10 miles to the gallon the cost of running a fleet can be millions of pounds a year. The problem is worse in the North East which is further from the larger markets in the South and the North East Chamber of Commerce has estimated the region has an extra £85 fuel tax burden. Fuel accounts for about 41.5% of Fergusons’ total costs. “In Europe diesel is recognised as being essential for business and there has just been a report out saying how much less damage diesel does to the environment than petrol. Wherever you go on the Continent diesel is cheaper than petrol and that’s purely a taxation issue. “My suggestion would be to put up the VAT on fuel and reduce the duty so the price at the pump would be the same for the general public but business users could reclaim the VAT,’’ Ferguson adds. He resents the fact that the duty paid by truck users in the UK more than covers the building and maintenance of roads. “They collect an awful lot of money out of people using the roads and we’d like to see

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a bit more spent on the roads and I think it’s absolutely scandalous that there still isn’t a motorway connecting London to Edinburgh, our two capital cities. “For some reason, once they get to Newcastle they think the world has come to a stop. “Even if they said they were going to do it over the next 20 years, they could do a little bit at a time. “At the moment we don’t even have a dual carriageway.’’ There is, however, a simpler and cheaper move the government could also make to assist his industry, he believes. “On the single carriageway of the A1 and every other single carriageway in the UK all trucks legally are only supposed to do 40mph. The technology and braking and everything else has come on leaps and bounds in the decades since that law was set and that should be lifted to 50mph. “Then every car stuck behind a truck on the road would be burning less fuel than if it was doing 40mph so it would be positively beneficial for the environment and there would be fewer accidents from people not overtaking when they shouldn’t. “It’s a no-brainer and it would be zero cost for the government but of great benefit to the country,” he says. “The government should recognise the benefit we bring to the country by keeping goods moving and keeping the economy going. Rather than trying to get money out of us they should be trying to help us.’’ n

Step change: Alan Ferguson believes the government’s approach to haulage needs a re-think

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INSIGHT

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INSIGHT

rail track revolution Nexus is rolling out smart ticket travel on the Tyne and Wear Metro – a project which could transform public transport throughout the region, as Peter Jackson finds out talking to Tobyn Hughes In tandem with a huge programme of capital renewal, Tyne & Wear’s public transport is poised for major changes in the way travellers pay. Nexus, the Passenger Transport Executive which owns and manages the Tyne and Wear Metro has started to roll out a new ticketing system which, it hopes, will change the way we think of travel. Tobyn Hughes, Nexus’ director of customer services, says: “It’s a very exciting time, it

will transform the way people view public transport ticketing.’’ The new system, a smart card, will eventually replace the old paper ticket system. For Nexus, which is funded by the Tyne and Wear Integrated Transport Authority, making travel easier to buy ties in with the Go Smarter for Business project the ITA is running to encourage commuters to think again about how they get to work, as well as capital

schemes to improve the road and Metro rail network. The aim is a single smart card that can be used not just on Metro but right across public transport, from the Tees Valley to the Scottish border. “The old Metro ticketing system has been around since the system opened,’’ says Hughes. “It’s very efficient at collecting coins and spitting out the ticket, but it’s old fashioned in that the old machines don’t >>

Ticket to ride: Tobyn Hughes, director of customer services at Nexus, which is currently overseeing a major transformation of the Tyne and Wear Metro system

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Ready to roll: (Left to right) Paul Durkin of Newcastle University, Brenda Greenup of Brewen and Bernard Garner, director general of Nexus at Haymarket Metro Station for launch of the new Corporate Pop Card give change and don’t accept card payment. The world has moved on.’’ Increasing numbers of people have been to London and experienced the capital’s Oyster Card and customer feedback indicated a desire to see improvements to ticket machines including them accepting bank notes and card payments. This coincided with Nexus’ own desire to improve security on the system by increasing the numbers of staff at certain stations and to reduce travelling without a ticket. That led to a government-funded

project to modernise ticketing. “But we also turned to customers’ wider desires, to get new ways to pay, for us to learn best practice from public transport systems elsewhere. We also decided to expand that project to implement a smart card system,’’ says Hughes. That process, which has taken some two and half years, has given birth to the Pop Card, a plastic smart card with a chip which is stored on a customer’s travel ticket. “It’s technology is compliant to a standard

It’s really important that the public transport system is there to support staff and make sure people can travel around accessing employment opportunities to engage in economic activity

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known as ITSO (Integrated Transport Smartcard Organisation), a way for different transport and other smart products to communicate with each other using a common language, across the UK. “That means we can have ticket machines, automatic gates at Metro stations, we can have bus ticket machines, we can have internet sites and different types of payment devices, all of which can communicate with each other using that common language about the user’s electronic ticket.’’ The first group of customers to receive the Pop Card are corporate clients, people who work at businesses which buy tickets directly from Nexus, benefitting from discounts and easy payment terms as a result. These are organisations such as Newcastle University, health care trusts and the DSS. Pop cards were also introduced to students in university freshers week. The first smart ticket transaction on the system occurred this autumn when a customer entered a Nexus Travelshop, bought a ticket

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and, instead of receiving a piece of paper and a photo card, they were asked for their Pop Card which was uploaded with their electronic ticket. When asked to show their ticket by a Metro sinspector the details on their ticket can be checked by a hand-held electronic reader. When the ticket runs out the customer can go to a station ticket machine to renew it, and in the near future do so online. More than two thirds of Metro stations are equipped with new ticket machines and 1,000 corporate customers will have Pop Cards by the end of October. This first phase is transferring season ticket holders onto the Pop Card. The next – Touch In Day - is scheduled for about half way through 2013. On that day automatic ticket gates installed at the 13 busiest Metro stations will become active and will only be opened by a Pop Card or traditional paper ticket. “The reasons we are introducing Touch-In Day is more than just getting people to go through barriers. The magic of that day is that we are introducing a new product which is called Pop Credits,’’ says Hughes. Pop Credits will be a pay-as-you-go system similar to that used with the Oyster Card. The customer will put whatever sum of money they want onto their card which they will use to pay for travel as they go. On exiting the Metro system the customer will either go through another gate or touch their card against a validator, which will allow the fare to be calculated and the relevant sum removed from the card. It will be cheaper to travel with pay-as-you-go compared to a paper ticket. Ticket machines and a website will inform people of the balance on their Pop Card and allow them to top up. “The real beauty of it is you can travel as much as you like on any given day and you’ll never pay more than what we call the price cap. We’ll have a daily price cap and the system, as you travel round will calculate how much you have spent and once you have hit this price cap it will stop taking money off your card and the rest of your journeys will be free.’’ The price cap will be set at the level of the most expensive Metro day ticket, currently £5, but the Integrated Transport Authority, which sets ticket prices as a public body, is

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also expected to introduce a discount for Pop Credits compared to buying paper tickets.. Pop Credits will also be available for use on the bus system. Agreement has been reached through a parallel project called Nesti, North East Smart Ticketing Initiative. Nesti is a collaboration between the North East’s 12 local authorities, each of which has contributed to a £10m fund to develop a smart ticketing network that covers the region from Saltburn to the Scottish border and from Hartlepool to Hexham. The objective to ensure that smart payment is available whatever public transport you choose to use, as well as in other public services. Under the Nesti agreement the Pop Credits will be acceptable on buses from Touch-In Day. The daily price cap will, however, only apply to Metro travel. Also through Nesti there will be a retail network where people can top up their Pop Credits close to home.

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“I can’t at this point say who the supplier is because we are going through the procurement process but we have got a preferred supplier and it’s somebody who works with small shops and local suppliers.’’ Nexus is eager to work with as many companies and public bodies as possible to ensure smart ticketing is fully integrated with customers’ everyday needs and activities. It is, for example, working closely with Newcastle University through the Nesti project to allow students to use the same smart card to access university buildings as well as to travel on the Metro. Similarly, sixth formers in Gateshead have begun using Pop Cards to access school facilities and register attendance, as well as travel to school by bus. “These are examples of what could, over time, become lots wider uses. You can see council leisure centres being part of this and library systems. You can see sports clubs wanting to combine travel tickets with access systems >>

Metro plan remains on track Modernisation of Metro through Nexus’ ‘All Change’ programme is delivering results in terms of reliability and the passenger experience. Metro: All Change is an 11-year programme worth £385m to renew and refurbish the entire Metro system, including the track, the structures, bridges, three viaducts, tunnels, stations and the trains. It builds on the earlier refurbishment and rebuilding of the city gateway stations at Haymarket and Sunderland. Tobyn Hughes says: “While Metro is excellent and operates very efficiently and punctually, it is nevertheless, in large part, an ageing Victorian asset which was inherited from the old British Rail system in the late 1970s when Metro was created. “Although it has been maintained well through the years all assets have their shelf life and a point at which they need deep maintenance or renewal.’’ By the end of the first three years, in which work has been concentrated between Newcastle and North Shields, a total of 18.5km of track and track bed has been relaid, 10 of the 60 stations will have been refurbished or be in the process of, and 14 Metrocar carriages refurbished. Embankments are being shored up and bridges – some of which are more than 170 years old – and tunnel linings are being repaired and renewed. This has meant some closure of parts of the system while the work is being done. Haymarket Station has been renewed and that will be repeated in other stations over the 11 years. North Shields Station has effectively been rebuilt. Trains are receiving an interior refurbishment with better lighting, new upholstery and better storage for wheelchairs. All the Metro cars will be refurbished by the end of 2015. Hughes says: “The feedback we are getting from customers who are on the new Metro cars is very positive. They think it’s a much brighter, more comfortable environment so we are very pleased with the results we have got so far.’’

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or loyalty cards. The possibilities are endless as we map out that development.’’ Nexus believes the Pop Card has much to offer employers. “The benefit to the employer is that many have an obligation to make sure their staff can get to work as sustainably as possible, either because they are in areas with constrained parking space or because they are in organisations where perhaps there is a group of staff with low car ownership or because they have adopted sustainable travel policies. Public transport is also the key to a flexible workforce and recruiting as widely as possible’’ Some big employers – public as well as private – already run schemes whereby they buy annual tickets from Nexus for their staff and recover the cost through monthly payroll deductions. “Part of our role is to help grow the economy and get as many people into jobs as possible. So we will do anything we can do in terms of developing the accessibility of public transport through ticketing and through understanding customers’ needs so we can connect people with jobs and employers with workforce.’’ The benefit of the new system for customers is that they will have new ways to pay for their travel, new outlets at which they can pay and a cheaper fare. They will also have greater security, in that a lost or stolen card can be blocked and replaced. “They will also get a heap of extra improvements as time goes on: new ways to monitor their travel and usage of public transport and how it affects their finances; ways to buy tickets to download onto their smart card at home. We will also be developing a system of incentives for loyalty and frequent use of the system.’’ Nexus has three aims in introducing the Pop Card. It wants to increase use of the Metro by making the systems as convenient as possible; it wants to maximise its revenues and minimise public subsidy; and it wants to transform the customers’ experience to achieve the first two aims. “The possibilities of completely different ways to pay are there and we will continue to look at them but we’ve also got to ensure that customers continue to use the system in a way they feel comfortable with.

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“At the moment it’s a question of expanding our product range to make it easier while at the same time giving the discounts for long term season ticket holders that are already there.’’ Nexus’ business case for the new system is based on a reduction in ticketless travel. Each passenger without a ticket costs the business at least the price of a single fair and – while such fraud is relatively rare – it is still estimated to account for several hundred thousand journeys each year. Converting a reasonable percentage of those to ticket sales will produce an overall revenue gain. Nexus believes the Pop Card will appeal to a new market segment – people who would otherwise travel occasionally but feel it’s too expensive or inconvenient to buy a ticket and use their cars. “Our aim is to capture that market by saying you have got the card in your pocket, you’ve already got money on it, if the decision today was between driving and getting Metro, it’s actually as easy to get Metro because you haven’t got the worry about change, you haven’t got to worry about where you get your ticket, it’s already there.’’ Further benefit for Nexus is having less cash to handle and more and better information on where and how the system is being used allowing better planning of services. It will also free personnel to increase staff presence elsewhere on the network. Will the system be future-proof and able to cope with future developments such as paying by smart phone. “It is. The key thing is moving from paperbased system to an electronic based system. Once the information about ticketing is held in

a central electronic place you can then move with the technology. You are quite right, the next step is highly likely to be mobile phones. “The plastic credit card sized card isn’t the important bit. “The important bit is the chip with a little aerial which emits a signal which is read by the device in the Metro station. You can do that with a wrist band, with a mobile phone, with a key fob and any number of different devices. As we move further into the future the ways to pay will change as well.’’ The introduction of the new system is not happening in isolation, but has gone hand-in-hand with Metro: All Change, a £385m programme of capital investment in the system. Hughes says: “These are clearly challenging times for the local economy in Tyne and Wear, these are tough times for employers but they are also tough times for their staff. “It’s really important that the public transport system is there to support them and make sure that people can travel around accessing employment and opportunities to engage in economic activity during this period. “On Metro we have seen the effects of the local economic challenges, we have seen some declines in ridership during off-peak periods when people would engage in leisure activities but we are pleased to see that at the moment the peak travel appears to be holding up fairly well. That said, across public transport as a whole there are declines in ridership which we think are related to the local economy. It’s very important that public transport providers and businesses continue to work closely together to make sure the system is there to support economic growth.’’ n

We’ve seen the effects of the local economic challenges but we are pleased to see that peak travel at the moment is holding up fairly well

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London King’s Cross railway station – gateway to the Capital National Rail reports on the benefits for North East businesspeople of using its improved offering when heading to London

Mixing the old and the new: The departures concourse at Kings Cross station in London An estimated 70% of railway journeys start, finish, or go through London. From our two independent railway stations at Chester-leStreet, opened in 1999, and our new station at Eaglescliffe, London is also an important destination. There is a wide range of fares, and most people have no idea that the cheapest London fares are 1/13 of the most expensive full fare first class flexible return. This is why we encourage business customers, and leisure customers, who really want to save some money to talk to us. But whichever fare you travel on, you will arrive in London at station code KGX, King’s Cross, which is on the northern side of the city centre and well served by six underground lines plus Thameslink and Eurostar from St. Pancras, just across the road. Taken together, the two main-line stations and the associated underground station form one of Britain's biggest transport hubs. There are twelve platforms, numbered 0 to 11, and around 26 million people use the station

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every year. Opened in 1852, King's Cross was built as the London hub of the Great Northern Railway and terminus of the East Coast main line. It took its name from the King's Cross area of London, named after a monument to King George IV that was demolished in 1845. The station has changed ownership a number of times: firstly the Great Northern Railway (GNR) (1852-1923), then the London and North Eastern Railway (LNER) (1923-1948), then following nationalisation British Railways (1948-1996), then upon privatisation Railtrack, then Network Rail. It is known in fact for being the southern terminus of the Flying Scotsman, and in fiction for the Hogwarts Express from mythical platform 9 3/4. It is possible to find a luggage trolley half disappeared into the wall in the departures concourse. In 1972, a single-storey extension designed inhouse by British Rail was built on to the front of the station to contain the main passenger concourse and ticket office. Although intended to be temporary, it still obscures the

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Grade I listed facade of the original station. The extension is currently being demolished, to reveal a new public square, opening next year. Since 19 March of this year, regular rail users have been using the new semi-circular departures concourse, built on to the west of the station, behind the Great Northern Hotel (which after several years of closure during construction work, is to be reopened as a boutique hotel). Departing passengers use the new concourse; arriving passengers exit the station from the old concourse on Euston Road. The semi-circular building has a radius of 54 metres and over 2000 triangular roof panels, half of which are glass. If you habitually use the plane to London, try out train for a change. It’s just as quick city centre to city centre from Newcastle to London, and there’s no air service these days from Durham Tees Valley. Incredibly some people still insist on driving to London which, apart from being environmentally very unfriendly, loses the opportunity to do some serious work on the train now that virtually all East Coast and Grand Central trains have WiFi as standard. Eaglescliffe has five London services on weekdays from early December, up from four, and on the East Coast main line there’s a train every half hour from Newcastle and Darlington. You can book on our website www.nationalrail.com or call our staff teams at Chester-le-Street or Eaglescliffe to get the best option for you. If you telephone us we can send your tickets out by post. Stationmaster Alex Nelson regularly gives talks to local and business groups on how to save money on rail tickets and is happy to help with group travel. Take advantage of the expertise of Chester-leTrack which has been around for longer than all the current train operators! n www.nationalrail.com

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bumpy ride for bus routes Bus services in Tyne & Wear are set for a major shake-up amid a political row as Peter Jackson discovers talking to Coun David Wood Coun David Wood seems remarkably unruffled for a man who is at the eye of a storm in the politics of buses. He is chairman of the Tyne & Wear Integrated Transport Authority, made up of delegates from Tyne and Wear’s five local authorities with the task of delivering public transport across the area. At the moment, through the passenger transport executive Nexus, it is embroiled with the bus companies in discussions over the vexed question of quality contracts. Before explaining these, Coun Wood is anxious to explain the background. “The members of the ITA were a bit concerned about the decline in patronage on buses and lots of complaints about bus routes being taken away by the operators at short notice and it was becoming more and more difficult for the ITA through Nexus to support these bus services with public money.’’ He adds: “The perception is that buses are infrequent and they are expensive.’’ He points out that in Tyne & Wear a levy to fund concessionary travel goes to swell the profits of the bus companies and questions whether that is right. Against this background in November 2011 the ITA asked Nexus to draw up proposals for

In the eye of a storm: Coun David Wood, chairman of the Tyne & Wear Integrated Transport Authority

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quality contracts as allowed under current legislation. In a nutshell, such contracts would see the authority, through Nexus, taking back direct control of routes times and prices and contracting with the operators to provide a specified service on each route with common ticketing. Each route would have a built in profit margin and any extra profit would be ploughed back into the bus services. Under the enabling legislation such quality contracts would be exclusive.

“What we are looking for is a scheme that will make it easier for the travelling public to be able to get on a bus and where people live within 400 metres of a bus stop. Some of the isolated areas are becoming more isolated because buses go off at 6pm. “The ITA is not about taking over bus services we want to work with bus operators and that’s what happening in London at the moment, they are running on a franchise system and the same operators we are talking to >>

View from behind the driver’s wheel Coun Wood’s vision is a simple one – that the Tyne & Wear public transport system should be regarded as a viable alternative to taking the car, giving comfortable journeys which are affordable and reliable. Real integration will be one element in achieving that end. “Anybody who lives in London has a tremendous service,’’ he says. “A couple of years ago I was fortunate enough to visit Perth in Australia and I spent a day with the transport people. The Perth local authority is in charge of the buses and the light rail system, not unlike Tyne & Wear. There you would have a bus turning up for a train arriving and the time table was linked so if a train was going to be late the bus would wait.’’ For the future the ITA will be looking at extensions to the Metro and guided bus systems. “It would depend on the business case. An extension to the Metro might work for one particular area but a guided bus system might be better for another area,’’ he says. In the 1980s pre-deregulation Tyne & Wear was accepted to have one of the best transport systems in the country outside of London with a new Metro system and a bus system built around it. “Maybe it was a bit too prescriptive and I have no wish to go back to those days. Times have changed and more people have cars for one thing.’’ He would like to see more park and ride schemes with dedicated bus lanes which are properly enforced perhaps with cameras on buses. “We are not anti car, I drive a car.’’

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are operating under the same conditions there.’’ The bus operators have reacted angrily to these proposals and indeed, in the case of Stagecoach, one might say furiously, comparing Nexus to Marx, Lenin and Trotsky and threatening that if the ITA and Nexus went ahead with quality contracts it would close its depots, lay off its staff and remove its buses. Operators have also raised the prospect of going to court to challenge quality contracts. Also currently on the table, however, are quality partnerships. Coun Wood says: “Alongside of that [quality contracts] we were conscious of the fact that the bus operators are there so could we enter into a partnership agreement which would bring about the same if not better services that a quality contract would bring.’’ Partnership

agreements could involve integrating bus and Metro timetables, changing routes to give access to less profitable ones for socially disadvantaged areas. ITA will receive proposals for quality contracts and partnerships and it will reach a decision on which it favours by the end of November or beginning of December. Quality partnerships could be implemented quickly whereas quality contracts would take up to two years to implement. “We’ll probably have a special meeting on this because it is so important. “One option will be balanced against another and then the decision will be taken. Personally I’m waiting to see what evidence is on the table but whatever I go with will be, in my view, what will best suit the travelling public, not the ITA or the operators.’’ n

Whatever I go with will be what will best suit the travelling public, not the ITA or the operators

Tunnel proves instant problem solver The New Tyne Crossing opened last November, following four years of work and it has had a dramatic impact on reducing congestion and saving travel time. The new tunnel, built as part of the £260m New Tyne Crossing project, overseen by the ITA, was commissioned for use in February 2011 and the original 1967-built tunnel was closed for refurbishment, allowing a dedicated escape passage to be built and state-of-the-art fire safety technology to be installed. The completed four-lane crossing became fully operational in November 2011. Before that the Tyne Tunnel had been identified as the fourth worst traffic hotspot in the UK and the only UK A road to feature in the list of top ten busiest traffic sites. The old tunnel saw an average of 38,000 vehicles a day, which declined in recent years with the economic downturn to between 36,000 and 37,000 a day. Since the new crossing became operational numbers have been up to 42,000 to 43,000. The capacity of the crossing is about 78,000 vehicles a day. “Immediately when the tunnel opened, it solved the congestion problem,’’ says Coun Wood. “It stopped it overnight. And it was built to budget and to time. The old tunnel was operating at 140% capacity and you had upwards of 45 minutes queue every morning and it was on the news every morning but it doesn’t get a mention now. People come from all over the world to look at it.’’

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Bus companies operating in Tyne and Wear dispute the case for quality contracts. We look at their arguments North East Bus Operators Association, Neboa, challenges the claim of the ITA that quality contracts have been operating in London for some years. It says London’s bus services were never properly privatised but remained subject to regulation and now fares are heavily subsidised from congestion charge revenues. Neboa says the only part of the UK which is regulated is Northern Ireland and there the transport authority has run out of money and for the next few years there will be no investment in new buses. Tom Dodds, secretary of Neboa, says: “The bus operators in the region firmly believe that a partnership is the best option for Tyne and Wear. It would provide immediate benefits for bus passengers in Tyne and Wear. New bus-tobus tickets will dramatically reduce costs for people who need to use more than one bus operator, and a new fare offering for 16 to 18 year-olds will provide a better fare option for more young people, whether they are in education or not.’’ He claims that partnerships provide immediate benefits for local tax payers and that Neboa has identified bus services that are currently paid for by Nexus that bus operators would take on commercially. “These benefits could start as early as next April; a quality contract could not be implemented for more than another two years,’’ he says. Moving to a quality contract would transfer a considerable amount of risk from the private to the public sector. At the moment, council tax payers in Tyne and Wear put about £10m a year into buses, of which about a third is

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for vital services such as school buses and the remainder pays for very early morning and late evening services and a handful of bus services that carry very few people.’’ Dodds argues that under a quality contract, local authorities would effectively underwrite buses in Tyne and Wear, with local councillors becoming responsible for any losses that their

network incurs – the difference between fares and costs. He adds: “Nexus has claimed that there’s huge profit being made in the bus network, but that’s not the case – two of the three big operators make single-digit profits, and while one operator makes double-digit profits, it does so while having the cheapest fares.

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“It must be remembered that, under ITA and Nexus control, Metro makes huge losses. It costs £60m a year to run and collects £40m in fares, costing the people of Tyne and Wear £20m a year – yet it only serves about a fifth of the population of the area. On the other hand, 93% of Tyne and Wear’s buses are provided commercially. n

Partnership approach is the best destination for bus networks

Kevin Carr, managing director of Go North East and chairman of the North East Bus Operators’ Association argues the case for a partnership approach It’s time to put the rhetoric and the politics to one side and to assess calmly the offerings on the table, weigh up the risks and make the right decision. While a quality contract scheme is one option for Tyne and Wear’s buses, I believe that a binding partnership agreement provides all the benefits without the risks. But first, let’s dismiss the myths. Bus companies don’t receive subsidies - we get paid for providing services. Successive governments have agreed that elderly and disabled people should have free bus travel, funded by the government. Bus companies provide this at a discount, at about half price – a great deal for the taxpayer. Next, the government rebates about 64% of the fuel tax bus companies pay, not just in Tyne and Wear, but across the country. This national policy helps keep fares low. Finally, Nexus buys bus services that few people use but that are thought socially necessary. The current financial exposure of Tyne and Wear’s council tax payers is only £10m for those socially necessary services. Unless policies change, the costs of concessionary travel and socially necessary services won’t disappear under a quality contract. There is no evidence anywhere in Europe to suggest that placing buses under central control reduces costs and increases ridership. If anything, the reverse is true. From 1969 to 1986, nationalisation and local authority ownership of most of the UK bus industry saw a period of dramatic

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entrenchment and decline. Demands for support from local authorities far outstripped available funding. Today we’re fortunate to have a stable network of bus services, largely provided commercially – 93% of the cost of running the county’s buses is met from fares and reasonable reimbursement for concessionary travel. But that doesn’t mean we’re complacent quite the opposite. Go North East is the region’s largest bus operator. In the last six years, the number of journeys made on our buses has risen by three and a half million a year, to reach almost 72 million. In the face of the recession and when fuel price rises have continually driven up fares for our loyal customers, we’ve achieved this by making bus travel attractive. Clear branding makes routes easy to identify;

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simple fares and ticketing mean that there’s a ticket to suit every pocket for almost every conceivable journey; investment in new vehicles means that we have some of the most comfortable buses ever offered to the travelling public; and we’ve embraced Facebook, Twitter, mobile phone technology and the internet to provide accurate and meaningful passenger information. There’s more to do. Bus operators are working closely with Nexus to improve the partnership offer. New bus-to-bus tickets will make journeys involving two bus operators cheaper; improved fares for older teenagers will provide new opportunities for travel to colleges, universities and employment; and a commitment to providing services when people want to travel at affordable fares means that council tax payers won’t have to pick up the bill and local jobs on the buses will be secured. All this can be provided through a binding partnership agreement, brokered by Nexus, just as is being done in South Yorkshire. Conversely, quality contract schemes move the financial risk of bus operations into the public sector. A seven-year contract scheme would make local councils vulnerable to underwriting buses to the tune of £1bn – the largest financial commitment ever placed upon the ITA. Buses are vital to the economy of our region, carrying more people to work, to shop and to leisure activities than any other form of public transport. Let’s build on that in an atmosphere of trust through a meaningful and binding partnership agreement.

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County Durham’s 2030 plan gathers pace A major spatial plan to transform the transport and infrastructure of County Durham has reached a crucial stage in its journey. Here Durham County Council’s Peter Ollivere explains how its blueprint for the future of the county could bring huge economic opportunities to the region. For the first time since the widespread changes made to local governmental structure in recent years, Durham County Council has been able to align all of its policy strategies into one. As a result, it has drawn up a plan of action that promises to deliver considerable economic benefits to the county it serves. The County Durham Plan (CDP) outlines a number of measures which aim to bring employment growth to the region and attract new companies into the area, particularly from the private sector. Ultimately the plan will seek to provide long term and sustainable job opportunities for the County’s residents. It will also target growth in the tourist economy which the council believes has huge, untapped potential. Within the CDP framework are targets to create 30,000 new jobs, develop 30,000 new houses as well as 300 hectares of general and specific use employment land and 29,750 sqm (gross) of new retail space. Crucially, the plan aims to get the right land uses in the right places. The CDP will be submitted for inspection next year, with a public inquiry expected in the summer of 2014. In the meantime Durham County Council is keen to garner support and involvement from businesses in the area as the plan takes shape. Transport underpins most forms of economic activity and we understand that economic growth cannot continue in a sustainable way unless transport and land use planning are integrated. Harnessing County Durham’s pulling power The CDP shifts the emphasis from previous strategies to investing in opportunities rather than resolving weaknesses. This is seen as the only way to secure economic growth going forward. Investing in and around DurhamGate, the Hitachi train assembly project and maximising Durham City’s potential are examples of this.

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Artist’s impression of how the new DurhamGate development in Spennymoor will look

Transport underpins most forms of economic activity and we understand that economic growth cannot continue in a sustainable way unless transport and land use planning are integrated The CDP positions Durham City as a key location for attracting new business and our vision is that key sites in Durham City and a new business park at Aykley Heads will help facilitate private sector-led employment. The location is attractive to businesses which can capitalise on being in close proximity to the city centre, views of the World Heritage Site and having links to one of the country’s finest universities. The East Coast Main Line and the A1M are also major selling points but we need to be sure that the rest of the transport network within the city works. Traffic on the roads in and around Durham City should flow in a way that will satisfy the expectation of local residents, commuters,

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businesses, bus companies, emergency services and visitors. Aykley Heads could attract 6,000 new jobs over the plan period, balancing the current high level of public sector jobs in the town with more private sector investment. The plan also states that the city must take advantage of its prime location in the North East and proposes investing £81m in building two relief roads to the west and the north of the city, taking out unnecessary traffic going through the city centre, creating new capacity to facilitate new jobs. Creating a more sustainable transport market County Durham has a dispersed settlement pattern which makes sustainable transport a challenge

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to plan for. However, we have been making some positive steps to promote sustainable travel around the county including working with schools and employers. The council is also working with bus operators through the Transit 15 project to provide better accessibility through bus priority and service improvements. The project is centred on seven key travel corridors into Durham City including routes from Birtley, Bishop Auckland, Consett, Coxhoe, Crook, Sherburn and Stanley. The project includes implementation of over 20 individual schemes where congestion and delay adversely affect journey times. But sustainable travel doesn’t necessarily mean that people have to leave their cars at home. The plan requests that all car parks have 15% car sharing bays as well as electric car charging bays. Meanwhile, our cycling strategy promotes the creation of cycling ‘super routes’ around the county. These routes will be focused on direct commuter routes in and between our main 12 towns, enabling cycling to become a realistic alternative. We also recently received £2m of Local Sustainable Transport Fund (LSTF) backing to be spent on changing people’s travel behaviour in the South of Durham. The funding is being spent on employing rangers to promote sustainable travel to individuals and build on the successful work done in the ‘Local Motion’ project in Darlington. We are also investing around £1m of our own capital to improve cycling this year including the Shildon to Aycliffe cycling corridor. Improving major rail services Since County Durham is the birthplace of the railways, it is perhaps fitting that they are an important part of the CDP. Durham station is well situated on the East Coast Main Line and boasts a sub three-hour service to London. The station also has strong intra-regional links and is adjacent to our proposed Strategic Employment site at Aykley Heads. However, although there is a good service here, we are lobbying to create a 15-minute ‘turn up and go’ service between Durham and Newcastle and between Durham, Darlington and York, removing the need for travellers to reference a timetable for these journeys. Secondary lines are also key A new rail station at Horden Sea view near Peterlee on the Durham Coast Line is also a council priority and is moving a step closer, with a total of £3.5m

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COMPANY PROFILE

Map showing the proposed Northern and Western Relief Roads, the park and ride sites and Leamside Line

being invested in a new station. It is estimated that 40,000 journeys will be facilitated as a result of bringing new investment and housing opportunities to this part of the County. The Bishop Auckland to Darlington railway is also seeing major investment and has a promising future. We recognise that it is a key asset for both employment and tourism growth. The line runs through a core economic area which has just received a major boost with the news that Hitachi train assembly plant at Heighington will be coming to County Durham which provides a significant opportunity for growing passenger and freight movements on that line and beyond. We are also investing £1m in the rail station at Bishop Auckland that has potential tourism benefits, especially as it connects to the Weardale Heritage Line. We also believe the Leamside Line, which was mothballed in 1992, could also be revived to become a significant and regionally important piece of transport infrastructure. With the East Coast Main Line now at full capacity, it could relieve the route between Northallerton and Newcastle, particularly for freight and goods trains, as well as easing congestion on the A1 Western By-pass around Gateshead.

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Freight facilities We’re also proposing two freight interchanges in the area, one of which will be close to the new Hitachi plant at Newton Aycliffe. The ability to transport freight from road to rail could provide a major boost to many businesses in the area – and is already having a positive impact in attracting employers from out outside the region into County Durham. A major step change This integrated new direction in strategy positions County Durham with a clear growth projection and seems to bode well at a time where economic uncertainty is the order of the day.

03000 261915 peter.ollivere@durham.gov.uk www.durham.gov.uk/cdp

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ENTREPRENEUR

AUTUMN 12

Growing at a rate of knots

SPECIAL REPORT | AUTUMN 12

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ENTREPRENEUR

In a sector populated by age-old firms with long histories, one young shipping company has fast emerged as a major challenger to the established fleet, as Andrew Mernin reports

When Tim Finley first set up his freight forwarding business five years ago, it didn’t take long for him to realise the huge international potential he was tapping into. Within 18 months he was already racing past the £1m-a-year turnover mark and, amid a global clamour for his services, he is now close to posting £6.5m in yearly sales. TF Shipping, based in Boldon, was launched after Finley spent almost two decades working in freight forwarding and related roles. His initial aim was to develop a sustainable business within two years but, after seeing strong demand in the sector for firms offering a more personal service than larger operators, the business quickly grew. Finley later decided to diversify the business, enabling it to continue its rapid development, and the move certainly paid off with the firm’s exports forwarding service quickly growing to become a major part of its earnings. While the firm has retained many of its imports forwarding customers, exports now make up 75% of the group’s business. “The majority of what we do goes to Africa, which is an economy that’s developing at a rapid rate and has had a lot of investment recently,” says Finley. “We send a lot of trucks and cars over there and it’s probably a market that makes up about 50% of our business. On any given month we could do maybe 100+ tractor units into various ports in Africa and we deal with anything from an individual sending their car there to orders from truck manufacturers. “It’s a broad range but our success stems from the fact that we offer the same rate, package and service to everybody, instead of offering tiers of rates to different people.” Unusually – and perhaps enviably for many

cash-strapped business leaders – the company has had to invest minimal resources in its sales function to maintain year-on-year growth. “Over the last few years we’ve found that around 75% of new business has come from personal recommendations from our customers,” he says. We don’t employ salespeople; there’s just myself and the staff in the office who look after customers and that helps us get a lot of recommendations, so people are coming to us instead of us cold-calling them. “There are other firms that have been around for hundreds of years offering similar services to us but it’s the way we do it and handle our customers that makes a difference. A lot of bigger agents treat clients as a number but we deal with customers more as an individual. We might send one car to Africa or have a customer who sends 1,000 containers of scrap metal to China every year. We treat them all the same and if there’s a problem, we’ll stand by and sort it out.” In terms of emerging markets for the company, Finley says: “We do a lot of work with waste products, such as exporting scrap metal and plastics to China, India and Pakistan. It’s a fast growing market which we seemed to get into at the right time and it’s snowballed ever since. “We import a lot of garments from China and Bangladesh and we’re also getting more involved with manufacturing as well as foodstuffs and animal feed.” The business is also currently thriving in the retail market, working with clients who supply to major high street brands and supermarkets. “Clothing sold in supermarkets is an area that is particularly growing which hasn’t been affected by the recession in the same way as

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high street stores have.” Invariably, as with any business, there are challenges which threaten TF Shipping’s growth. Among them are the increasing environmental pressures which continue to squeeze many of the company’s clients. The group handles the movement of a lot of goods through London, bringing the Low Emissions Zone costs into play, although Finley is a vehement supporter of such environmentally friendly measures. But much of the company’s ability to overcome such challenges and remain globally competitive can be attributed to the region’s ever-improving port facilities. “Using the Port of Tyne and Teesport facilities has had a massive impact on what we can offer our customers and minimised the impact of the environment costs down to a level where, in the North East, we can be as competitive as the guys based down close to Southampton and Felixstowe because the rates are just as good.” “Most shipping lines will now bring cargo into the North East on feeder vessels whereas, when we first started, we had to try to persuade them to come here,” he adds. n

The majority of what we do goes to Africa, which is an economy developing at a rapid rate

Buoyant market: Tim Finley’s shipping firm has quickly expanded since its launch

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port’s promise In these economic hard times Port of Tyne is thriving through diversification and finding new markets, as Peter Jackson reports

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Port of Tyne is on course for another year of increased revenues and profits, despite the global downturn. Chief executive Andrew Moffat says: “We have budget assumptions which are indicating financial growth of somewhere between 20% and 25% and at the moment, with eight months of the year gone, we are looking on target.’’ And this comes on top of a decade of growth. Last year the recorded turnover was £59.2m and pre-tax profits of £9m compared to 2002 revenues of £20.7m and pre-tax profits of £3.6m. This has been on the back of a considerable growth in activity. Last year more than £10bn worth of goods were handled by Port of Tyne. There were record cargo volumes – an >>

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increase of 66% in all areas, a 63% increase in cargo turnover, container volumes up by a quarter and car volumes up by a fifth to 667,000 vehicles. In fact the year saw Port of Tyne become the UK’s leading car exporting port, also rising from 7th to 5th position in Europe, and it became the 4th largest coal port. Cruise ship calls also rose to a record level, up from 20 to 37. “It’s a combination of the broad portfolio of interests that we have performing quite well,’’ says Moffat. “Also, against that, when we do see things moving in the opposite direction we have such a broad base that allows us to more than compensate for that.’’ The health of the port is of major importance to the region. Not only does it directly employ 440 people, it is estimated that it supports about 9,500 additional jobs and contributes an estimared £467m gross value added, GVA, to the North East economy. Yet 10 years ago the prospects for Port of Tyne looked very different. It was reliant on coal and, with the decline of that industry, there was a need to reinvent and diversify, or risk turning into a local port unable to compete against international competition. At a time of the decline of the region’s other major traditional industries reinvestment and reinvention became even more important. The Port undertook a programme of commercialisation and culture change and sought out new markets. It incorporated these into a five year strategic business plan which is reviewed every year. This focuses on the future, reviewing the current economic trends and markets, and forecasts where the main areas of the business might be over that time. It has also made significant capital investments. The river channel and main operational berths were dredged to their deepest ever depths in 2010, in an investment programme of more £5m, enabling today’s largest cargo vessels to berth at the Port. Another £5m was been invested in quay strengthening, buying new bulk cargo hoppers, and major engineering works. £1.1m on constructing a new plough dredger

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and a major upgrade to a section of rail track at the Port ‘The Boldon Curve’ has also helped to increase efficiencies at the port’s three rail terminals. A further £23m was invested in the construction of Europe’s biggest wood pellet handling facility. Over the last 10 years, £30m has been invested in the port’s three car terminals. In 2012 the port placed a £6m order for a second gantry crane in response to continued growth of the port’s logistics operations. The port has made a number of strategic land acquisitions to increase its land holdings in a position near the mouth of the river. Deepening the river has allowed more imports of the port’s traditional cargo of coal with bigger vessels being able to enter the port making it more economical for customers. Improvements to the car handling facilities allows cars to be brought to the port and stored for transshipment to their final market. “We have had a huge transformational programme of cultural change over these last few years,’’ says Moffat. “In 2010 the port launched a profit share scheme for all employees based on the John Lewis Partnership principles and, in 2010, the associated investment was £212,000. This first award, made in respect of 2010 business performance was equivalent of 2% of individual employee remuneration, and for 2011 the total award was 4%. “I’m a big admirer of John Lewis and we spent a lot of time with people from John Lewis,’’ says Moffat. “Once the profits after tax are announced, we look into our investment plans, see what’s left and distribute it as we can to our employees. Last year that equated to about an extra two weeks pay. “We have focused on Investors in People and we are now accredited. The business needed the discipline that it provides. We are talking about transparency of performance. We are trying to be as open as we can and get people to contribute to the preparation of budgets, plans and forecasts, so there’s a whole communication issue there.’’ He adds: “We are not just going to stop there because there are various grades within an IIP and we are moving along the path.’’ Enhanced communications at supervisory and corporate levels have included team briefings,

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in-house Tyne Crier magazine and Insight presentation events. The port also prints and circulates key business information every quarter. A process of personal development reviews was rolled out over five months and more than 90% of the staff said it was a good experience which they were looking forward to again next year. A significant area of diversification for Port of Tyne has been into wood pellet handling. In autumn 2010 its £23m biomass handling facility opened, which, with an annual capacity of 1.5m tonnes of material made from wood pellets, is the largest in Europe. In just the first two months of operation, it handled 153,000 tonnes of the material, which is transported by train twice a day to the Drax power station in North Yorkshire, which opted to use Port of Tyne over closer ports, and it is forecast to handle 1m tonnes this year. The port believes Drax biomass volumes have the potential to increase to around 2.5 tonnes a year and it is talking to at least two major new customers which, if successful, could see the operation treble in size during the next 18 months. The port is therefore planning a multimillion pound capital investment over the next three years to expand the facility and its capacity. It is confident this will consolidate the European lead it has established as a key hub in the new biomass infrastructure. It is forecast biomass will contribute £5.5m to turnover in 2012. The port had to overcome significant technical and environmental challenges on biomass. The pellets are a volatile cargo and the port pioneered new technologies and systems to handle the massive quantities that are forwarded to Drax, via a section of rail line reinstated for the purpose. It has also invested heavily in training employees to handle the new cargo. “This will be our second full year of operation in wood pellet handling,’’ says Moffat. “There is significant investment behind that which allows us to be more robust and produce stronger financials going forward.’’ Offshore wind energy also figures in the port’s plans. Since the announcement of the Round 3 offshore wind farm development, the port

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has been working on the opportunities and is in discussion with large inward investors on locating wind turbine manufacturing on the Tyne. Round 3 will also open up opportunities in pre-development survey work, supply chain establishment, assembly and installation and ongoing operations and maintenance. About 30% of the new Enterprise Zone for low carbon enterprises lies within the port’s land. It believes this is attractive to inward investors in wind turbines, particularly given its proximity to other EZ sites such as the old Swan Hunter and Neptune Yards and Newcastle College’s Energy Academy. The port has made – and says it will continue to make - strategic land acquisitions such as the recent agreement to acquire 10 acres of land adjacent to Tyne Dock which adds 250m of operational quayside to the 750m the Port already has. But the port sees itself as more than a commercial operation. It is a trust port and, as such, has a dual responsibility. On the one hand, it must operate as a commercial organisation and gain a market return on its investments and assets, but it also has wider responsibilities – some statutory - to the community. For one thing, this means the port’s commitment to the environment has to go beyond purely considerations of the effect on the bottom line. It has a dedicated environment officer to ensure its continued compliance with environmental legislation and requirements through the implementation of its Environmental Management System (EMS). The port boasts its EMS was only the third in Europe to achieve the PERS (Port Environmental Review System) Certification, an accreditation scheme developed by the European Sea Ports Organisation and EcoPorts. The port has also maintained the ISO 14001 standard for best environmental practice. This demonstrates an effective environmental management system and verifying compliance with all relevant environmental legislation. It also denotes a commitment to the prevention of pollution and implementation of a programme of continual improvement and environmental monitoring. Its trust status also leads Port of Tyne to

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INSIGHT

We’ve had a huge transformational programme of cultural change over these last few years

dedicate time and resources to corporate social responsibility and to the local community. In 2010 it made direct investments in stakeholder benefit worth £700,000, on causes ranging from supporting the North Shields Fish Quay Company to sponsoring South Shields Football Club and Durham County Cricket Club’s shirts. The Port of Tyne Fund has supported more than 50 local initiatives in the past 50 years, contributing grant funding of £150,000. “We are unique as we are a trust port. We are not a charitable trust, we operate on a commercial basis, but what that allows us to do is reinvest all the profits we make for the benefit of our stakeholders,’’ says Moffat. “We classify our stakeholders as our employees, customers, business community, the local community and the government.

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“So we are very much focused on providing a return for all of those areas.’’ Whether green shoots of recovery survive and grow or not, Port of Tyne is aware that there are challenges ahead. “When you are growing a business you don’t want to stop growing. Growth clearly puts stresses and strains on the business and the volumes of growth we have experienced does put some strains on the organisation,” says Moffat. It’s also challenging and what comes with that is increased profile and visibility as well as pride. “Looking forward, we want to continue to grow. We have some fantastic opportunities associated with renewable energy and for significant volume growth. It will put some strains on the business but they are good strains to have.” n

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INTERVIEW

AUTUMN 12

On the runway: Dave Laws , chief executive of Newcastle International Airport

flighty ambitions Newcastle International Airport has had a successful year and looks forward to more growth as chief executive Dave Laws tells Peter Jackson World markets may be turbulent but Newcastle International Airport is able to report a pretty solid performance. Over the past four months it has seen year-onyear growth of just over 2% with more than 2 million passengers using the airport between June and September and that comes on the back of being able to add 12 new destinations in the past year. Easyjet recently announced twice weekly flights to Jersey and, earlier in the year introduced a regular Amsterdam service. The year has also seen the opening of the Doubletree by Hilton and Emirates introduction of the Boeing 777 on the Dubai service which brings a 50% increase in capacity. Overall this year we have to be well satisfied with how things have gone,’’ says chief executive Dave Laws. “I’m also quite buoyant about what 2013 will bring. I don’t think we’ll have 12 new routes but I think we’ll be able to hold our own.’’ Increased business and patronage has gone hand-in-hand with some £3.2m of capital investment. “2012 has also seen us invest in the airport in a significant way,’’ says Laws. “When you’re providing services it’s always difficult to fully please everybody but what we have tried to do is to listen to what the customer wanted.’’ One significant area of investment has been security, which is an area few travellers enjoy. “Some people will say it’s not a pleasant experience so we have worked on it in the last 12 to 15 months and I’m not saying we

SPECIAL REPORT | AUTUMN 12

are the finished article by any means but we have tried to adopt a new approach to our search area, both for people and the actual infrastructure. We have invested in our people in terms of training to treat customers in the way we want customers to be treated. It is serious because passenger safety is of paramount importance but we want to try to make the experience in there as enjoyable as it can be. “At the same time we decided to substantially increase the security search area. More importantly for the passenger we have put in some additional lanes to try to make the process as quick as possible. At the moment our records show that for 88% of passengers so far this year have been processed in under six minutes. That’s a standard we want to keep and we want to try to improve on it. “We are just about to put in some additional screening equipment which will allow us to increase up to 10 lanes in busy periods and at peak times. For obvious economic reasons we can’t man 10 plus lanes all of the time but certainly we can predict what the peaks are and we will endeavour to make sure that we give the customer the best possible experience and that they spend as little time as possible in there. There’s a much better ambience up there, it’s a lot cooler because some people feel pressurised when they are in there, it has got fantastic natural daylight.’’ The airport has also installed 50% more desks in immigration. We want people to use Newcastle Airport

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as their airport of choice,’’ says Laws. “Sometimes you come off a long flight, it could be in the early hours of the morning, you’ve got young children and the last thing you want is to spend an hour or an hour and half in immigration. We have increased it by 50% but it’s an area we will have to revisit in the next couple of years. We want the inbound process to be as slick as the outbound, so people can get through immigration, get their bags, get in their car and get home and say that didn’t hurt at all. “We have also invested heavily in baggage reclaims. By the end of this year there will have been £500,000 spent just on baggage belts to make sure that as we take these larger aircraft that the belts are capable of taking the additional baggage. “Again, it’s just part of making the journey seamless and giving the customer the experience that they want. I think, in the main, we are providing that. We have been recognised by the airport operators association and Newcastle has been voted as the best airport under 6 million passengers for the last four years. We are getting some of it right but it’s not the finished article and we will continue to work to ensure that everything the customer wants we try to give them.’’ Car parking is also earmarked for expansion and the airport has plans to introduce electronic number plate recognition for business travellers. That will allow the traveller to register their number plate which is recognised automatically by the barrier lifts eliminating the need to queue at the ticket machine and they will be electronically billed. Laws sees next year as a period of preparation for 2014 when air side services will be totally revamped with new restaurants and retail. “Between now and then we want to get to our customer and find out what they want.

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AUTUMN 12

I don’t want to put a restaurant in that we think is right, we want to know exactly what the customer wants,’’ says Laws. “We have a brand new website to be launched in the next four to six weeks. We are excited by what it can do and how it can reach the customer. As part of that and a roll out in 2013 I would like to look at a loyalty scheme. “What do I get out of it? What I get out of it is that this becomes the airport of choice and people become committed. Nearly 80% of the people in our catchment area are loyal to the airport. We have to stop the other 20% going to another airport.’’ As an example of this Laws cites three of the new routes introduced in 2012 – Rome, Venice and Dubrovnik – came through market research by the airport. For next year Jet2 has announced what Laws describes as teasers – they have picked three destinations - Rekjavik, Marrakesh and St

TRANSPORT & INFRASTRUCTURE

Petersburg - to see how popular they prove. Problems remain, many of which are not of the airport’s making. At the forefront of these is air passenger duty, APD. “We think APD is a blocker to UK business, we think it’s a blocker to tourism. It’s a tax on the industry,’’ says Laws. In 2011 Newcastle Airport’s turnover was £52m from all aspects of its business from airlines, commercial activities and rent. This year it is expected that the government will collect £48.8m in air passenger duty from Newcastle airport alone. On a domestic flight in the UK on average the first £26 of that is APD and on a transatlantic flight for an economy passenger the APD is £70. “I accept the industry has to pay its way,’’ says Laws. “We have challenged the government to do a study on APD and we believe that if it was reduced they would ultimately make more money. We quote the Holland example.

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INTERVIEW

Holland brought in APD, it hit tourism so hard that within six to nine months they scrapped it. Dublin brought APD in, it hit air tourism, hit their bottom line and they reduced it by 50%. “Up to now we’ve had a stubborn resistance from the government in terms of acknowledging it. “An exception has been what’s happened in Belfast where they have been given special dispensation in that their daily service to New York does not attract APD. “We have to press the government to say surely this is the way forward for all. It will bring more tourism into the UK, it will certainly help people leave the UK to pursue business. I think sometimes we forget we’re on an island. We have to get off that island, we have to connect. Everybody in the industry believes that it’s definitely affecting the bottom line.’’ This has an effect on the whole region because of the airport’s economic impact. The value of UK exports shipped via Newcastle Airport is £173.6m of which £150m goes simply on the Emirates flight. The airport supports £402.5m in regional GVA – of which £57m is via tourism – and 1,750 tourism jobs. “In my opinion regional airports are disadvantaged anyway. “We don’t have the strength and depth of businesses in the region that the South East would enjoy, because we have to connect primarily through hub airports. “Other than Emirates which is direct, what we are doing is connecting through hubs so you are paying a double APD whereas businesses in the South East have easy access to Heathrow. We have asked the government to recognise that this is a disproportionate system. We are hopeful but I’m not confident. We need people to exert as much pressure as possible. We need the people to get behind us in the way they got behind the pasty tax.’’ He makes wider points about aviation policy in the UK, pointing out that British business has to gain access to new markets but is being left behind by European competitors where they are expanding their airports such as Frankfurt and Amsterdam. “They don’t seem to have the problems of adding runways that we do in the UK,’’ says Laws “As a result these people are able to offer flights into the emerging >>

SPECIAL REPORT | AUTUMN 12


INTERVIEW

AUTUMN 12

markets but we struggle. Politicians say the UK economy is in trouble, yet here we are, we have private business wanting to invest hundreds and hundreds of millions of pounds in new runways. That would kick start the construction industry and the UK economy and yet here we are another 12 months on and still no further forward. We continue to talk and bicker about it and in the meantime other European airports are becoming stronger at our expense. “Do we need a third runway at Heathrow? Yes. And I think we need another new airport in 10 years time to keep up with what’s going on in Europe so that we can compete in the world market. We need another airport but what we need first of all is that third runway at Heathrow.’’ He adds that potentially the UK might need a second runway at Gatwick. He is sympathetic to the argument that direct flights from regional airports to overseas destinations should be encouraged, but where these might be practical for centres such as Birmingham or Manchester, Newcastle, despite its direct flight to the East and ambitions for a transatlantic serviced lacks the population to support other routes. This means, argues Laws, that the ability of hub airports such as Heathrow to serve those destinations is vital to this region. He adds: “If there was another runway at Heathrow, you can then see them operating to places like Shanghai where our European counterparts can but we can’t because there aren’t enough slots out of Heathrow, whereas a third runway would get rid of that. “It would also protect our existing slots into Heathrow. If we don’t get the third runway, what’s the next move? “BA and other operators out of Heathrow have to get into emerging markets otherwise they will be overtaken by other airlines, so something has to give, so what do they do? Do they start potentially taking slots off other airports? That would be absolutely catastrophic for this region. Heathrow, Amsterdam, Paris – all of these hubs are absolutely vital.’’ The airport continues to press for a regular direct link to New York. “We continue to seek that and talks are ongoing with providers. I’ve had discussions

SPECIAL REPORT | AUTUMN 12

with the LEP about how we can work together and I’ve had discussions with my board. There’s no doubt about it, with the number of American businesses we have in the region, the one flight that everybody asks for is New York. APD is an issue, potentially the price of oil is an issue and the strength of the pound against the dollar is an issue. APD is the biggest factor. “We have made approaches to the government. We’ve said: to help us with a route to New York give us the first two years free of APD or give us 50% off it to generate and stimulate a new route which will ultimately lead to the government getting more revenue. We will continue to go for this as vigorously as we can. I am still hopeful that we will achieve that goal.’’ On broader transport and infrastructure issues he emphasises the importance of the A1 Western Bypass. He says: “One of the key priorities in this region has to be that Western bypass. “If we accept connectivity worldwide is fundamental then access to and from this airport is absolutely crucial. Time is money and as know the Western bypass is an issue and we will say that the priority for this region is to improve the

Western bypass to make links to and from this airport easier, particularly for our colleagues in the southern part of the region. Without a shadow of a doubt it’s head and shoulders above everything else.’’ “I applaud the politicians in doing the second Tyne Tunnel, I think they have done a great job. I would have loved it if the scheme to take out the Silverlink roundabout had been approved, that would have been immense for the region.’’ He also pays tribute to the politicians of the seven local authorities that are majority shareholders in the airport for their support. “They realise how important connectivity is. Without connectivity you will not attract new businesses. This year they have been excellent, they have been fully supportive.’’ Newcastle Airport is currently going through a process of refinancing and that is expected to completed in the coming weeks when it will also have a new 49% shareholder to replace Copenhagen Airport. Laws says: “Those two things will give us the platform to take the airport to another level. I’m really excited because there will be less debt in the company and I also think having a new shareholder on board is just right. That will ensure the airport goes from strength to strength.’’ n

Fact file Newcastle International Airport supports 7,800 jobs There are 3,200 jobs on site and 500 off site jobs through direct effects A further 4,100 jobs are supported across the North East through indirect and induced effects It is estimated that services provided by the airport will bring net economic benefits of £243.2m to the region on the basis of 2012 traffic levels The total of regional GVA and journey time savings is £645.7m A timeline of recent developments are as follows: The development of the newer part of the terminal building which houses the newer departure lounge area, international arrivals, and the Emirates, Thomson, Thomas Cook and other charter tour operator check in desks was built in 1998 and completed in the year 2000 The Fuel Farm was built in 2003 The refurbishment and extension of Level 2 (the location of the security search area) was started in 2003 and completed in 2004 The Emirates Air Traffic Control Tower was built in 2006 and completed in 2007 The Petrol filling station was built in 2009 The Hotel was built 2007 and completed in 2009 The runway was resurfaced in 2009

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TRANSPORT & INFRASTRUCTURE


SPECIAL REPORT | AUTUMN 12

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TRANSPORT & INFRASTRUCTURE


AUTUMN 12

ENTREPRENEUR

driving towards recovery Changes in the transport sector include those within executive chauffering, as Peter Jackson discovers talking to Brian Rudd Parkers Executive Chauffers was named after Lady Penelope’s lugubrious driver in the Thunderbirds TV series. It’s appropriate because although screened in the 1960s, the famous children’s puppet show was set in the future and Parkers’ strategy has been to give a traditional service a modern face in a rapidly changing world. “That’s what attracted us to buy the company because it was a great name association,’’ says managing director Brian Rudd. “There’s almost a subliminal connection when you talk to people, it’s something that connects with them.’’ When he bought the company - which is based on Newcastle’s Quayside – in 1982, Rudd, like Thunderbirds’ creators, had an eye on the future. A native north easterner he had joined The Electricity Board and forged a career in sales

and marketing in London and beyond but had a desire to return to the North East and run a business with his family. He says: “I looked at a number of different things. I wanted something we could develop as a business and that’s when we came across the idea of a chauffer service. When I had been working in London I had used chauffer services myself so I had seen it from the other side as a client. “It was something I had had in mind for quite a while. It wasn’t until we started looking into it seriously and doing the research that we realised that this was something we could really get a hold of and develop.’’ He, with wife Merilyn and sons Simon and James, commissioned a market research company which talked to current and potential clients about their executive car requirements. “From that we gleaned what we should be

doing, the way we set the business up and the services we should provide. Because of that, we felt there was a niche in the market that wasn’t’ really being catered for properly.’’ Buying expensive cars and taking on an office and staff was still something of a gamble. “When you set up any business it’s a big gamble,’’ says Rudd. “But because of the research that we had done we considered it was a reasonable gamble to take and that the investment was going to be worth it in the long term. If you are looking for something to invest in for a couple of years and then get your money out it’s not the business to be in but that’s true of most businesses, you’ve got to view it on a long term basis.’’ Rudd believes it was made less of a gamble by adopting a different business model at Parkers to mark it out from the competition. He explains: “Most of our competitors

We became much more efficient and now that things are on the up again we have become more profitable

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Thunderbirds are go: Brian Rudd’s business takes its name from a 1960s TV puppet

TRANSPORT & INFRASTRUCTURE

SPECIAL REPORT | AUTUMN 12


ENTREPRENEUR operate as owner drivers, one man one car, and, in some instances they group together in groups of three or four and give themselves a business name but they are still individuals who subcontract their services to that brand. “You then have all those individuals wanting to do their own thing, take time off then they want time off and not when the business dictates and it’s very difficult to manage the level of service under those circumstances.’’ Parkers directly employs a core of full time drivers as well as administration and marketing staff. “We can monitor everything and make sure that what we are promising we deliver and that’s where the crucial difference is.’’ It seems to have paid off as the business now offers a range of services including short and long distance private chauffer trips, day hire, group travel and corporate event support across the UK. Clients include British Airways, Emirates and KLM, International Paints, Siemens, Komatsu, Procter & Gamble and Ward Hadaway. Apart from the Rudd family Parkers employs eight and has seven vehicles, including Mercedes S Class, E Class and Viano models. It also uses subcontractor partners. This year the business is forecast to turnover £500,000. Apart from the vehicles the company has also invested in its website and operating system chaufferplanner which has an online booking facility and trackers fitted

SPECIAL REPORT | AUTUMN 12

AUTUMN 12

to the vehicles. “The business has evolved and we now provide transport and logistics planning for large events. Three weeks ago we did the low carbon vehicle conference on behalf of UKTI down in Bedford. Where we come into our own is in the planning and logistics of an event.’’ The company’s management has to keep a close eye on escalating fuel costs which, Rudd calculates, have gone up by 43% in two and a half years. “We are constantly looking at how we do things and we do try to be as efficient as possible,” he says. “We are always looking at the types of vehicles that we operate and we buy brand new vehicles with the very latest technology.’’ Inevitably, the company has been hit by the economic downturn. “In the middle of 2008 it was like somebody had flipped a switch off and we went through

a very difficult 12 month period. From the middle of 2009 there seemed to be a bit of confidence coming back.’’ They reduced the size of the vehicle fleet and laid off a member of staff. “We became much more efficient and now that things are on the up and up again we have become more profitable,’’ says Rudd. Now Rudd has plans for growth. “He says: “At the moment we are negotiating to buy another company. We are looking at expansion geographically.’’ The acquisition, which will be funded by bank borrowing, is expected to be completed before Christmas. It will mark a significant step for the company along the path to its goal of achieving national coverage. Rudd says: “We have specific plans to achieve that and we have engaged a consultant to help us develop the best strategy to do that.” n

We can monitor everything and make sure that what we are promising we deliver and that’s where the crucial difference is

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TRANSPORT & INFRASTRUCTURE


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AUTUMN 12

It’s absolutely scandalous that there still isn’t a motorway connecting London to Edinburgh, our two capital cities Alan ferguson, fergusons transport

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