Date : 10 OCTOBER 2006
Title : BRIEFING NOTE – COWES FERRY
REPORT OF
THE STRATEGIC DIRECTOR FOR ECONOMIC DEVELOPMENT AND REGENERATION
Rowing
boats provided the only opportunity to cross the River Medina until 1859 when
the first ferry service was provided. The current chain ferry entered into
service in January 1976 and cost £280000 when new.
Tolls
had been levied throughout at various levels for vehicles and pedestrians until
Members freed the passenger and bicycle tolls in 1992.
When
freeing the pedestrian toll, Members also took the opportunity to raise the
vehicle toll from 75 pence to £1.25 per single crossing. The removal of the
cost of collecting the pedestrian toll provided useful savings, but compared
with the total value of the pedestrian toll revenue foregone and income
shrinkage resulting from the very significant resistance to the increased
vehicle toll as manifest in a large reduction in vehicle usage of the ferry, overall
the new arrangements did not either increase income or vehicular use of the
ferry.
However,
in the interim, Members have subsequently consistently rejected the opportunity
to re-introduce a pedestrian toll, and a fabian approach to toll increases for vehicles
has ensued in an attempt to increase usage.
Following
the increase of the car toll from 75 pence to £1.25, the effect was that by the end of 1992-93, vehicle crossings had
slumped from almost 300000 to less than 210000. Over the years since, against a
backdrop of rising motoring costs and increased congestion in and around
Newport, the ferry toll for cars, and the ferry’s typical queuing and crossing
time, has become more attractive than the road route for many people.
Such
has currently become the popularity of the ferry, that by 2005-06, the ferry’s
capacity for conveyance of vehicles has become stretched close to its limits
from 8.00 am to 6.00 pm daily as the total number of vehicles conveyed annually
has now risen to 450000.
Officers
recommended a 10 pence per vehicle crossing toll increase for 2006-07, which
was agreed by Members, but vehicle numbers appear not to have been affected and
a continuing small increase in vehicle numbers is also evident. Additionally in
2006-07, a new large van toll category was successfully introduced at a premium
above car and car-derived van rates.
The ferry operates from 0530
to 0030 daily throughout the year and remains manned overnight so that it can
be repositioned in the river according to tidal variances and to permit the
passage of large vessels using the river.
The
ferry is operated by the Transport Section of Engineering Services, and is
locally managed by the Fleet Manager and a Supervisor who split their
managerial time and overheads 50/50 between the Cowes Ferry and Council vehicle
fleet management. The ferry also employs one maintenance engineer and a part
time admin assistant as well as 9 full time operational staff.
The principal direct
controllable operating costs of the ferry, and their typical relative
proportions, are in respect of the following:
Premises 2%
Insurance 6%
Recharges 6%
Additionally
each year substantial and variable non-controllable costs (indirect overheads)
are added to the service in relation to depreciation, capital financing and
BVACOP
There
has historically been an operating deficit in respect of the chain ferry dating
back many years. The deficit in terms of the controllable costs has shown long
term reduction subject to minor annual variance. The latest figures available
are:
2004-05
(actual) deficit £50,179
2005-06
(actual) deficit £56,809
2006-07
(budget forecast) deficit £20,129
Actual
income levels to date in 2006-07, combined with costs in line with those
anticipated, indicate that the ferry may in fact show a small surplus in income
over controllable costs in the current year.
However
when non-controllable indirect costs are factored in then the following
emerges:
2003-04 (actual) deficit £211,000
2004-05 (actual) deficit £103,000
2005-06 (actual) deficit £128,000
2006-07 (budget forecast) deficit
£ 49,619
In
summary, over a period of years an historic annual deficit in direct operating
costs has been steadily eroded and it would seem likely, that given a prudent
approach to future toll increases, the ferry should emerge into operational
surplus so far as controllable costs are concerned either in the current year
or in the next financial year and should be capable of sustaining that surplus.
Accounting for ongoing depreciation and similar non-controllable
charges will however delay an emergence into overall surplus .
Tolls
Vehicle Tolls
Vehicle tolls represent the principal, but not sole, opportunity for
income generation.
Vehicle toll revenue can be increased from 2007-08 onwards by the
following means:
-
Raising the current tolls
annually in line by index-linked inflation.
This should not result in a reduction in patronage. This is recommended to
be the minimum action to be taken for 2007-08 onwards
-
Raising the toll significantly
above inflation. This would almost certainly result in a reduction in vehicle
numbers using the ferry and could therefore be counter-productive. It could
also lead to increased traffic flows in Newport.
-
Removal of or lessening
of some current discounts that are available through pre-purchase of books of
toll voucher tickets. These currently offer a saving of up to 50% based on
pre-purchase of 20 tickets. Phased increase of the cost of pre-paid voucher
books by up to 20% per annum from 2007-08 is recommended and will yield
significant financial benefit to the Council and yet will continue to provide a
valuable discount to local residents in the interim. By 2011-12, parity between
inflation linked cash single tolls for vehicles with the unit cost of pre-paid
vouchers will have been attained. Thus the longer term strategy could be to
have a single rate paid by all, with no advance pre-paid vouchers. It may also
be possible in due course to utilise smart-card technology to permit
pre-payment by local residents whether discounted or not.
Pedestrian
tolls were freed in 1992. Undoubtedly re-introduction of a pedestrian toll at
any level would meet with strong local resistance. Moreover, to actually merit
consideration at all, then the cost of toll collection and the level of tolls
imposed would have to be devised so that it would ensure that the net financial
effect to the Council would be beneficial.
On-board
toll collection of pedestrian tolls is not the solution. This is principally
because of volume and time constraints.
Toll
office, or other land based toll collection is likely to be manpower intensive
and would also require fitment and ongoing maintenance of a robust system of
barriers, gates and turnstiles to ensure that by the time the pedestrian
reaches the ferry their toll has been collected. Pre-paid ticket machines could
form part of this arrangement but their previous use at this site was blighted
by frequent machine breakdown and acts of wilful damage.
Mindful
that the ferry is running close to vehicle capacity for much of its operational
time at present, and that the regeneration of the Cowes and East Cowes
waterfront is proceeding apace, then it can be anticipated that the demand by
vehicles to cross the river will increase in the future and that the issue of
the provision of additional vehicle capacity will need to be addressed shortly.
The current ferry, although 30 years old, shows no structural evidence to suggest
that it cannot remain in service for many years to come. The cost of a
replacement ferry with higher vehicle capacity is likely to be in the range of
£4-5 million.
It
would be however be possible to increase the vehicle capacity by 25- 30% if the
passenger compartments were withdrawn or severely restricted. Passengers would
therefore have to be conveyed by other means.
The
means to achieve this is to run a dedicated passenger ferry service separate to
the chain ferry. This is already done when the chain ferry is out of service or
at refit by means of a hired-in launch service that operates from Council
controlled sites close the ferry slipway at either side of the river.
The
passenger ferry should at worst be self financing and at best profitable. To
achieve this, pedestrian tolls would have to be meaningful and not token. A
single crossing toll of 50 pence, based upon a currently estimated 1 million
pedestrian journeys made annually should yield sufficient income for this
purpose.
Segregation
of passengers from vehicles at the ferry site would in its own right be a
valuable benefit.
It
is recommended that detailed examination of the cost and operational
implications of running a separate dedicated passenger ferry be undertaken.
Advertising
Opportunities
from advertising are also available and have already been exploited to varying
degrees.
The
Council has a “paint for advertising” deal with Blake’s Paints that brings free
paint to the ferry in exchange for advertising space on the outer bulkhead.
This arrangement is worth several thousand pounds to the Council annually.
There
is also limited advertising space on the inner bulkheads of the ferry and the
Council generates a modest revenue from that source.
The
ticket receipts issued on the ferry may be capable of bearing advertising but
this has not yet been fully investigated.
It
is recommended that opportunities for continuing existing advertising or for
new areas for advertising be examined and implemented where practicable
If
tolls are set at reasonable levels then there will be a continuing and
increasing demand for passenger and vehicle movements across the River Medina.
There
is considerable potential for increased income generation, as set out above,
but there may be strong local opposition and some tough political decisions to
make within the process.
Contact
Point : Andy Morris, Transport
Manager
DEREK ROWELL
Strategic Director for Economic Development and
Regeneration