§ Mr. Neil Thorne
asked the Secretary of State for Transport whether there are any plans to extend the London docklands light railway; and if he will make a statement.
§ Mr. Ridley
London Regional Transport has today with my consent presented a Bill to provide powers to extend to the City the docklands light railway, now under construction. This extension would link the railway to LTR's Bank underground station. The extension would be mostly below ground.
My right hon. Friend the Secretary of State for the Environment and I have been considering ways to involve the private sector in ownership and operation of the docklands light railway. The consortium which plans to develop Canary wharf on the Isle of Dogs and which comprises companies associated with and backed by Credit Suisse First Boston, Morgan Stanley International and First Boston International has told me that it regards the extension to the Bank as essential for its project. An understanding has now been reached with it that it will contribute £30 million towards the construction of the extension and, unless others come forward, secure underwriting of an agreed privatisation scheme. My right hon. Friend and I have endorsed this understanding. The consortium is bearing LRT's costs in the Bill.
There will be opportunity for other people who are interested in owning and operating the extended railway to put forward alternatives to the consortium's proposals.
The railway, at present under construction, is being financed by the Government through London Regional Transport and the London Docklands Development Corporation at a capital cost of £77 million. The prime purpose is to facilitate the development of docklands. It is not expected to generate a financial return on the capital invested and the Government therefore intend to offer it to any appropriate person who is prepared to construct the City extension, on terms that the Government retain a shareholding representing its investment, which will be remunerated if profits from the combined railway reach a sufficient level. The railway will revert to the ownership of LRT if, for any reason, the City extension fails to be completed.
The arrangements that I have described represent a sufficient understanding for the Bill to be deposited by the date specified by the Standing Orders. They are subject to final agreement between LRT and the consortium on the detailed design and costs of the City extension, and on the particulars of the privatisation scheme, and to the completion of a master building agreement between the consortium and the LDDC on the Canary wharf development, as well as to the consent of Parliament to the Bill.566W
Work will now proceed to settle the detailed design and forecast costs of the Bank extension before Second Reading of the Bill. Meanwhile, I am delightd that there is now a real prospect for the successful involvement of the private sector in a major piece of rail infrastructure in our capital city.