REGIONAL GROWTH FUND

Application form Part 1

Department for Business, Innovation and Skills Department for Communities and Local Government HM Treasury Department for Transport Department for Food, Environment And Rural Affairs

Regional Growth Fund / Application form Part 1

Application Form Part 1

General Guidance notes
The Regional Growth Fund (RGF) application form consists of two parts. Part 1 (this document) contains 30 questions related to the project and its costs and benefits. Part 2 (the Financial Annex) is an Excel spreadsheet for the key financials of the project and should be used as a tool to complete the indicated Part 1 questions. Both Part 1 and Part 2 of the application form should be completed as fully as possible. Bids are invited for projects that will directly create jobs through private sector enterprise and growth, and from projects that will enable or unlock future private sector jobs growth, particularly in those areas and communities that are currently dependent on the public sector. We are using one application form for all types of bids - if a question does not apply to a specific bid, please mark the answer form N/A. In the application form the word project is used to describe both single Projects and Packages of Projects. Applicants for Packages should make sure that each response adequately covers every individual component (sub-project) in the Package. Please read the accompanying guidance notes carefully when completing the form to ensure you include the full set of information required.

Regional Growth Fund / Application form Part 1

Record keeping and Freedom of Information

In order to meet the requirements of the Freedom of Information Act 2000 reasons for decisions about applications and claims must be recorded properly on file at all stages. This record keeping will also ensure that there is a clear audit trail for all applications. Administrative records will be maintained for all applications irrespective of whether they were successful. Applicants should be aware that information provided in confidence is likely to be exempt information under the terms of Section 41 of the Freedom of Information Act 2000, and that the operating department will respect its confidentiality.

Applicant Information
Applicant name (including title): Company / Organisation: Mr Charles Buchanan Mr Paul Crick Infratil Airports Europe Ltd Kent County Council

Position in Company / Chief Executive Officer, Manston Airport Organisation: Interim Director of Integrated Strategy and Planning Address: Manston Airport (PO Box 500) Manston Kent CT12 5BL Telephone: Mobile: Email: Website: 01843 824825 07767 293832 Paul.Crick@kent.gov.uk www.manstonairport.com www.kent.gov.uk Invicta House Maidstone Kent ME14 1XX 01622 221615 07595 090574

charles.buchanan@manstonairport.com

Regional Growth Fund / Application form Part 1

Section A: Project Description

This section of the application form is designed to identify private and public sector partners involved in the project and seeks basic information about the nature of the project. 1. What is the project title? The project title is Access to East Kent. With one of the countrys highest proportion of public sector jobs (in the top 20% of districts) and some of the South Easts highest levels of deprivation, the East Kent area is at risk of losing nearly 3,000 jobs from public sector retrenchment over the course of the current spending period. The delivery of the Access to East Kent project will have a transformational impact on the local economy by enabling a fundamental relocation of Thanet from its presently peripheral, end-of-the-line position to one of the best-connected locations in the UK. The project will position Thanet on a par with Brighton, Oxford and Cambridge in terms of rail connectivity to London, and significantly enhance the attractiveness of the area as a place to live, work and invest by maximising the benefits of Britains first high speed rail link. It will provide a critical boost to Manston (Kent International) Airport in pursuing its ambitious expansion plans, which strongly accord with the Governments emerging strategy for South East airports, and unlock thousands of new jobs at the Airport itself, in surrounding business parks and in the local retail, hospitality and leisure sectors. 2. What is the post code location(s) of the project? Manston (Kent International) Airport CT12 5BL Thanet Parkway Station (proposed location) CT12 5JL 3 What good(s) or service(s) will be offered to the market directly and indirectly as a result of the project? Where possible and applicable, please provide the relevant SIC code (see application form guidance). (a) goods and services directly offered to the market by the project partners as a direct result of this investment? Twice-daily direct air services, operated Manston (Kent International) Airport and SIC code 5110/1. between

Faster rail services, operated by the Integrated Kent Franchise holder (currently Southeastern), from the Thanet Parkway Station to London St Pancras (via High Speed 1), London Charing Cross and London Cannon Street. SIC code 4910. Dedicated bus shuttle service, funded by Infratil Airports Europe Ltd, between the Thanet Parkway Station and Manston (Kent International) Airport. SIC code 4931/9. (b) if the project will create additional market opportunities, these should be listed here. The commencement of twice-daily air services to would provide a catalyst for the wider development of Manston (Kent

Regional Growth Fund / Application form Part 1

International) Airport, which is expected to create up to 2,800 direct and indirect jobs by 2018, rising to 6,000 by 2033. In the short-term, it would trigger the employment and training of 11 Airport Fire and Rescue personnel, 9 Airport Security personnel, and 3 Customer Service personnel on a full-time, permanent basis. This would enable the Airport to expand its operating hours from the current 12 hours per day to 18 hours per day and to handle up to 750,000 passengers per annum and more than double the existing levels of freight, making the best use of its existing facilities. This wider availability of the Airport combined with its direct access to the Thanet Parkway Station will improve its attractiveness to potential operators of both passenger and freight services. Each additional weekly cargo flight would generate between 150,000 and 200,000 in revenue, which is likely to be re-invested in airport infrastructure, staffing and services, thereby further enhancing its capacity to handle larger volumes of flights. The project will increase the attractiveness of East Kent for incoming businesses, who will benefit from improved access to the rest of the South East and to London, greater international connectivity and being able to draw on a larger effective labour market. These improvements will both increase competitiveness of existing businesses within East Kent, by lowering production costs and raising local economic output and incomes, and attract new investments from outside. Our analysis indicates that the sectors most likely to gain are the retail, wholesale and hospitality sectors as well as privately offered consumer services. Overall, the scheme delivers a sustained increase in GVA in East Kent of nearly 10m by 2020. The projects transformative effect on Thanets accessibility to London and Europe will promote development at the Districts two main business parks, Manston and Eurokent, which is expected to create up to 200 jobs by 2014. The high quality light industrial and office accommodation at Eurokent Business Park, which has the capacity to create up to 1,500 jobs, was first made available in April 2010 and is currently 36% full. Although the site is being actively marketed, there remain significant issues for businesses in relation to accessibility. The Thanet Parkway Station would provide the critical access to a key transport interchange for this site, as well as acting as a strategic link for Manston (Kent International) Airport, the Port of Ramsgate and the new East Kent Access road. 4. Set out the main project activities and proposed timescale in which they will be carried out. Include costing for these in Part 2, Section C of the application form. (a) activities carried out by project partners as a direct result of this investment? Kent County Council will develop and procure the proposed Thanet Parkway Station at Cliffsend, in partnership with Infratil Airports Europe Ltd (IAEL), Network Rail and potentially Southeastern (the current Integrated Kent Franchise holder). IAEL will make a 560,000 contribution to the capital cost of the Parkway Station, a further 1.94 million will be funded through borrowing and the remaining 7.7 million is being sought through the Regional Growth Fund. A detailed technical note specifying the preferred station site, detailed design, rail operational issues, and costing is provided in Annex 1. Kent County Council intends to deliver the Thanet Parkway Station by 1st April 2014. A detailed project plan for the implementation of the station is provided in Annex 2. Network Rail will progress the St Pancras to Ramsgate Journey Time Improvement Scheme in partnership with Kent County Council. At present, the Ashford to Ramsgate
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section of route has an overall speed limit of 70mph; however current signalling is designed for 85mph running. If this were combined with improving or eliminating permanent speed restrictions at three locations, the theoretical running time between Ashford and Ramsgate could be reduced from the current 36 minutes to a theoretical minimum of 26 minutes. This would permit a St Pancras to Thanet Parkway journey time of approximately 64 minutes, compared to approximately 74 minutes to this location in the current (December 2010) off-peak timetable. Funding for the first phase of improvements, which will reduce journey times by approximately two minutes at a cost of 2 million, is being sought through the Regional Growth Fund. These improvements will be delivered by Network Rail during Control Period 4 (i.e. before 2014) which will ensure that journey times to Ramsgate are not adversely affected by the introduction of an additional stop at the Thanet Parkway Station. Network Rail will then deliver the remaining improvements, at a cost of approximately 8 million, at the beginning of Control Period 5 (i.e. 2015/16) subject to internal funding approval. It should be noted that the Kent Route Utilisation Strategy (RUS), published in January 2010, suggests that for every minute that can be saved on journey time, an expenditure of 5.2 million can be justified. This does not mean that the money is actually available to spend, or that this level of expenditure is necessary, but it does indicate that investment in projects of this nature would provide a very strong return. Infratil Airports Europe Ltd (IAEL) will progress the introduction of a twice-daily direct air service from Manston (Kent International) Airport to It is proposed that the service would depart Manston at approximately 0800 and return at approximately 1800, thereby permitting daily business and leisure trips to as well as onward connections to long-haul destinations throughout the world. Commercially confidential discussions are at an advanced stage with with a view to commencing operation of this service in April 2012. As with any new venture of this nature, however, the proposed service presents significant financial risks to It will therefore be necessary for IAEL to underwrite the service for its first three years of operation, representing a total financial commitment of 600,000. Funding for this purpose is being sought through the Regional Growth Fund. The commencement of the new air service will trigger the employment and training by IAEL of 23 personnel at Manston (Kent International) Airport, including 11 Airport Fire and Rescue personnel, 9 Airport Security personnel, and 3 Customer Service personnel on a full-time, permanent basis. This represents a revenue cost over three years of 500,000, which is being sought through the Regional Growth Fund. IAEL will fully fund a dedicated bus shuttle service for air passengers between the Thanet Parkway Station and Manston (Kent International) Airport. This service would commence immediately following the opening of the Parkway Station and would represent an ongoing annual revenue cost to IAEL of approximately 100,000. As part of the first phase of the Manston (Kent International) Airport Master Plan, IAEL will fund the capital cost of a new Airport Southern Approach Road, to reduce interchange times by bus between the Thanet Parkway Station and the airport terminal and to divert airport-related traffic away from Manston Village. The capital cost of the road has initially been estimated as approximately 6.5 million. It is anticipated that the
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road would be constructed once throughput at the Airport reaches approximately 3 million passengers per annum. (b) other activities which may be carried out as an indirect result of this investment? If it is not certain that an investment will go ahead, please estimate the likelihood of it going ahead with and without the project. As noted in response to Question 3b (above), the commencement of twice-daily services to would enable Manston (Kent International) Airport to significantly increase its capacity to handle larger volumes of air traffic, with consequent productivity and employment benefits. This additional capacity would enable Manston to play a significant part in satisfying the growing demand for air travel which cannot be accommodated at the main London airports. As described above, this investment would also stimulate commercial interest in the high quality light industrial and office accommodation at the Eurokent and Manston Business Parks, which have the capacity to create a total of 3,000 jobs, as well as opening up further employment land adjacent to the Thanet Parkway Station, at Richborough and in the Sandwich Corridor. The project will significantly enhance the level of demand for housing in Thanet by reducing commuting times to London to a level similar to that enjoyed by towns such as Brighton, Oxford and Cambridge in an area with significantly lower average property prices. This will in turn be a stimulus for bringing empty homes in the District back into use and attract significant investment in housing improvements, which will create new jobs in construction, including apprenticeships. The in-migration of higher income residents will also strengthen the service base of the area, creating further jobs in the local retail and leisure sectors. This process will have wider benefits to the South East region, including a wider distribution of the demand for housing linked to London employment. It will therefore help to reduce housing pressures in areas closer to London, which will also reduce public spending through housing benefit and restrain labour costs. 5. Please summarise how the project will contribute to the objectives of the Regional Growth Fund. See application form guidance. It is recommended that the answer to this question is no longer than 750 words. Despite its position within the relatively prosperous South East of England, and its offer of a range of high-quality employment units at a fraction of the cost of those elsewhere in the region, the Thanet economy suffers from a number of structural weaknesses which have contributed to its position as the most disadvantaged district in Kent and the 65th most disadvantaged district (out of 354) in England, as measured by the 2007 National Index of Deprivation. Chief amongst these is its relative inaccessibility in strategic terms, with poor transport links to the rest of the UK and Europe. The extent of public sector reliance in Thanet is of particular concern in light of the Coalition Governments plans to reduce the UK budget deficit. The public sector accounts for 35% of employment in the District, compared to 25% in the South East of England as a whole. Kent County Councils Total Place Pilot in 2009 found that the Districts annual welfare bill amounted to approximately 180 million, with 21% of people of working age claiming one or more key Department for Work and Pensions benefits, compared to 13%
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in Kent and 11% in the South East. Moreover, Experians recently-published economic resilience index, which measures how robust local economies are to economic change, ranks Thanet 295th out of 324 UK authorities. Thanets fragile economy, low earnings and relative peripherality has meant weak demand for housing and low house prices compared to the South East regional average. This has contributed to a pattern of selective in-migration by older people of retirement age, the economically inactive and benefit dependent from other parts of the region and the UK. This process has been accompanied by the extensive sub-division of former hotels and guest houses associated with the areas heyday as a major seasonal tourist destination into smaller, self-contained flats. The District consequently has a very large private rented sector and a shortage of quality family homes, which are vital to attract investors in high value, job-creating development. Manston (Kent International) Airport nevertheless represents a potentially fundamental source of direct, private sector employment and a catalyst for attracting higher value business and jobs to Thanet. In May 2010, Flybe launched the first daily passenger air service from Manston since the suspension of EUJet operations in 2005. Daily flights now operate to and from Edinburgh, along with six flights a week to Manchester. The Airports Master Plan, published in November 2009, forecasts passenger throughput increasing to approximately 2.2 million passengers per annum in 2018 and 4.75 million passengers per annum in 2033, with direct and indirect employment growing from around 100 jobs in 2011 to 2,800 in 2018 and 6,000 in 2033. These jobs would predominantly be created within East Kent, with available land for a range of employment uses located at, and immediately adjacent to, the Airport itself. These opportunities are likely to appeal to businesss that cannot afford the rental or capital land values at or around the other major South East airports. The sectors most likely to gain are the retail, wholesale and hospitality sectors as well as privately offered consumer services. Many aviation and non-aviation related busineses will benefit from easy access to air transport services and they will contribute significantly to the employment of otherwise unemployed labour resources and the upskilling of the local workforce. Access to low cost air transport infrastructure and services will also promote the development of the tourism, leisure and recreation business sectors, enabling them to capitalise on the areas unrivalled access to Kents stunning countryside, coast and cultural facilities, including Canterbury Cathedral and the new Turner Contemporary art gallery in Margate. Overall, the scheme would deliver a sustained increase in GVA in East Kent of nearly 10 million by 2020. Manston Airports potential to support sustainable local economic growth and realise its Master Plan forecasts has recently been strengthened by the Coalition Governments cancellation of the proposed third runway at Heathrow Airport and its indication that it will not support planning applications for further runways at Gatwick or Stansted. An unprecedented opportunity therefore exists to make more intensive use of Manston Airport, at a fraction of the cost of developing an entirely new airport, as part of the overall strategy for air capacity in the South East. In response to the new Governments emerging aviation policy, Infratil Airports Europe Ltd, which owns Manston Airport, has received a number of expressions of interest from airlines seeking to expand their short-haul route network from South East England. Prominent amongst these is proposal to operate a twice-daily direct service from

Regional Growth Fund / Application form Part 1

Manston to from the spring of 2012. As described in response to Question 3b (above), this would immediately trigger the employment and training of approximately 25 additional members of staff at the Airport, which would in turn increase its capacity to handle larger volumes of air traffic, with consequent productivity and employment benefits. If Manston is to become a significant regional airport in its own right however, it requires improved access to Kents high speed rail network. The proposal to develop a Thanet Parkway Station adjacent to the Airport, along with investment by Network Rail supported by the Regional Growth Fund to reduce journey times from the Parkway to London to approximately an hour, therefore has huge potential to transform both the economic and social prospects of Thanet. These interventions would not only enable the Airport to compete more effectively for short-haul passenger traffic; they would also increase the attractiveness of the Manston and Eurokent Business Parks, which have the capacity to support a total of 3,000 jobs. Faster rail links would also significantly increase the potential demand for housing in Thanet from London commuters and their families; enhance the prospect of selfemployed people and small businesses servicing London clients choosing to take advantage of the Districts relatively cheap housing and excellent quality of life; and attract day visitors to Thanet from London, boosting the visitor economy. Collectively, these changes would boost demand for family homes and encourage investment in the local housing stock, thereby creating construction jobs; and increase retail and leisure spending, whilst promoting a change in the social structure of the District. 6. Which entity will be the recipient of RGF funds? Who are their immediate and ultimate parents? Provide where appropriate details for each of these of legal status, entity name, address, company registration number or VAT registration number, sector, directors, principal shareholders, and contact details. Please also identify any recipients which are SMEs. Kent County Council County Hall Maidstone Kent ME14 1XQ VAT registration number: GB 204269191 Sector: Local Government Contact number: (01622) 221615 Group Managing Director:- Katherine Kerswell Executive Director Environment, Highways and Waste: Mike Austerberry Network Rail Infrastructure Ltd Kings Place 90 York Way London N1 9AG

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Legal status: Network Rail is a company limited by guarantee; a private company operating as a commercial business. It is directly accountable to its members and regulated by the Office of Rail Regulation. Company registration number: 2904587 Sector: Network Rail owns and operates Britains rail infrastructure. Executive Directors: Peter Henderson Chief Executive (Acting) Patrick Butcher Group Finance Director Robin Gisby Director, Operations & Customer Services Simon Kirby Director, Investment Projects Paul Plummer Director, Planning and Development Infratil Airports Europe Ltd Kent International Airport PO Box 500 Manston Kent CT12 5BP Legal status:- Infratil Airports Europe Ltd is a subsidiary undertaking of Infratil Ltd, incorporated in New Zealand (registered office: 97 The Terrace, PO Box 320, Wellington, New Zealand). Company registration number:- Manston Airport is the trading name of Infratil Kent Airport Ltd (company registration number SC176703), which is a 100% owned subsidiary of Infratil Airports Europe Ltd (company registration number 04115145), registered at Kent International Airport. VAT registration number:- GB 617196528 Sector:- Aviation Directors:- Lloyd Morrison David Newman Paul Ridley-Smith Phil Walker Steven Fitzgerald Iain Cochrane 7. Are other organisations or companies part of this bid? YES London and South Eastern Railway Ltd (trading as Southeastern) 3rd Floor, 41-51 Grey Street Newcastle-upon-Tyne NE1 6EE Legal status:- Company Company registration number:- 04860660 VAT registration number:- GB 684307618

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Sector:- Rail passenger transport Statutory Directors:- Keith Ludeman Nick Swift Charles Horton Wilma Allan Alistair Gordon Patrick Jeantet Contact number:- 01912 113203

7(a) IF YES, please set out their role in the project, the relationship between different partners in delivering the project, and specify their legal status, entity name, address, company registration number or VAT registration number, sector, directors, principal shareholders, and contact details. Southeastern is the current holder of the Integrated Kent Franchise and is the sole operator of rail services between Thanet and London. It is therefore the potential operator of services to and from the proposed Thanet Parkway Station from 2014. Southeastern has been fully involved in the preparation of the Access to East Kent RGF bid and has formally registered its support for its constituent projects (see attached letter of support from Charles Horton). is presently engaged in detailed negotiations with Infratil Airports Europe Ltd with a view to operating a twice-daily direct air service between Manston (Kent International) Airport and from the summer of 2012. has been consulted throughout the preparation of the Access to East Kent RGF bid and has formally registered its support its constituent projects

8. In addition to any RGF funds, how will the project be funded? Please identify sources, amount of funding and terms of funding and indicate whether these have been confirmed. Show how these sources of funding along with the RGF support add up to the total cost of delivering the project set out in question 4. (a) funding for the investment itself?
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Regional Growth Fund a total of 10.8 million is sought from the RGF, which combines the following contributions: 7.7 million towards the capital cost of the Thanet Parkway Station; 2 million towards the capital cost of the St Pancras-Ramsgate Journey Time Improvement Scheme (Phase 1); 600,000 towards the underwriting of the proposed air service from Manston (Kent International) Airport to for three years from summer 2012; and, 500,000 towards the delivery of the first phase of the Manston (Kent International) Airport Master Plan, including the training and employment of 11 Airport Fire and Rescue personnel, 9 Airport Security personnel, and 3 Customer Service personnel on a full-time, permanent basis. Infratil Airports Europe Ltd match-funding of 7.66 million over ten years from 2011/12 until 2020/21, which combines the following contributions: 560,000 towards the capital cost of the Thanet Parkway Station; 100,000 per annum for the provision of a dedicated bus service between the Thanet Parkway Station and Manston (Kent International) Airport; and, Approximately 6.5 million for the provision of a new Airport Southern Approach Road, to be constructed once throughput at the Airport reaches approximately 3 million passengers per annum (anticipated in 2018/19). The road would provide a more direct surface access route for buses from the Thanet Parkway Station and to divert airport-related traffic away from Manston Village. This funding is additional as it is contingent on the delivery of the proposed Thanet Parkway Station. The station would greatly enhance the ability of Manston (Kent International) Airport to attract and retain new passenger air services, which will in turn create significant new employment opportunities, both at the Airport itself and also within the Airports East Kent supply chain. Network Rail up to 8 million contribution towards the capital cost of the St Pancras to Ramsgate Journey Time Improvement Scheme (Phase 2). Network Rail is currently seeking internal funding approval to deliver this scheme at the beginning of Control Period 5 (2015-2019). Commercial borrowing against the surplus revenue generated by the Thanet Parkway Station 1.94 million. Total project cost - 28.4 million (b) funding of related or contingent investments? Kent County Council is currently party to the INTERREG IVB (North Sea Region) Green Sustainable Airports project, which includes a confirmed 85,000 European Regional Development Fund grant (50% match-funded by the County Council) for a study on surface access to Manston (Kent International) Airport. The results of this study would inform the planning and delivery of an appropriate transit service between the Thanet Parkway Station and Manston (Kent International) Airport.

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Section B: Without RGF support

In order to maximise the impact of the Regional Growth Fund, Government support should be restricted to those instances where the market cannot, or will not fully or in-part, bring an investment forward in the absence of public support. This section will establish a rationale for Government support by enabling us to understand whether and why the project would not otherwise go ahead as proposed. 9. In the absence of RGF support, will the project go ahead (and if so in what form)? Please provide commercial and economic reasoning to support your argument. (a) will the investment project go ahead (and in what form)? The Thanet Parkway Station project has not already commenced and will not go ahead without RGF support, for the following reasons: Whilst the benefits to local businesses would be significant, they would be widely spread and hence difficult to capture, as is generally the case with economic development schemes of this nature. Local commercial and residential land values remain low relative to the Kent and South East averages while construction costs are similar across the region. This, coupled with low profit margins and the lack of large employers in Thanet, has a significant impact on the ability of the District Council to obtain development contributions for infrastructure and services over and above those which are required to support developments directly. Consequently, the use of a Community Infrastructure Levy or Variable Tariff scheme to fund the Parkway Station is not considered viable. Furthermore, there would not be a sufficient return on investment to attract private sector investment to pay for the project in its entirety. Similarly, although the local economic benefits have been demonstrated to be significant, there is not sufficient funding available through the Integrated Transport Block grant to Kent County Council to fund the project. Additionally, bids for Major Scheme funding are not currently being accepted by the Department for Transport. The Thanet Parkway Station is not included in any of Network Rails current improvement programmes for stations. Hence, it is not the commercial or economic disadvantages of the project that will prevent its implementation, but the affordability in terms of the currently available sources of finance in the absence of monies from the RGF. The operation of an air service from Manston (Kent International) Airport to a European hub would be unlikely to happen at all without the Airport subsidising the airline operation. In the current economic environment, the Airport, operating as it does at an annual loss, is not in a position to provide that subsidy to the level that would sufficiently encourage the airline to commence operations. The integration of the airport with the Thanet Parkway Station provides a more robust market case, offering access to a wider area of South East England for both incoming and outgoing passengers. (b) will the wider development of the area, if applicable, proceed (and in what form)?

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The Thanet Local Plan, adopted in 2006 made reference to the potential for a rail connection to Manston (Kent International) Airport to help ensure that modal shift for passengers arriving at the airport could be achieved. Furthermore, Policy DCS7 of the emerging Core Strategy of the Thanet Local Development Framework gives support to the provision of a Parkway Station to the south of the Airport. This document has been subject to a significant amount of public consultation. Should funding be identified to enable the construction of the Parkway in the short term it is considered that this would trigger a review of strategic allocations for employment land and for housing to ensure the implications of such a development could be taken full advantage of. This would not be possible in the absence of RGF support. The emerging Core Strategy acknowledges the difficulties of planning for one-off investment opportunities and notes that such proposals can contribute significantly to providing new employment opportunities. It notes that is important that proposals are not deterred simply because of lack of suitable allocated land. Thanet needs to examine all opportunities that have the potential to result in more and better paid employment. Decisions relating to the environs of the Thanet Parkway Station will be taken in this context. Despite the improvements to the transport network in East Kent that have been implemented over the last ten years, there is no doubt that Thanet is still seen as remote and peripheral by many businesses and investors. The growth of Mantson Airport and associated employment opportunities, coupled with faster train times and the facility of a Parkway Station would make a significant difference to that perception. 10. Are there other ways of taking the project forward that will not require RGF support? Please outline what these are and why they are considered inferior: (a) ways of taking the investment project itself ahead? There are no viable alternative means of taking the Thanet Parkway Station forward. As noted in relation to Question 9 (above), there are four potential sources of funding to take the project forward, which could be used singly or in combination: Specification of the Thanet Parkway scheme through the High Level Output Statement (HLOS) by the Department for Transport, and subsequent funding of the project through Network Rail; Major Scheme funding from the Department for Transport; The implementation of a Community Infrastructure Levy or Variable Tariff scheme; and, Investment by the private sector. At the present time, sufficient funding is not available from any of these sources to an extent that would provide finance for the project. The alternative funding sources for underwriting the proposed air service from Manston (Kent International) Airport to are principally either from the airline, the Airport, or external third parties. In this case, the airline would already be making a contribution through the risk level it would take in covering the operating costs of the service. It should be remembered that airlines have completely mobile assets which they are able to deploy at a wide range of airports on a variety of
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routes. The support that an airport and its community are able to provide towards the start-up costs and risks, is regularly influential in their route development decisions. Manston Airport is operating at a loss, and has done so for many years. Whilst Infratil is prepared to invest in the development of the Airports infrastructure, and to cover the existing level of losses together with a contribution to the additional costs for the first years of a new service, it would not be prepared to cover 100% of the route support costs for this new route. In addition, the commitment of the local community that would be illustrated by a successful funding bid will be viewed by the airline as a significant statement of support for the route. (b) ways in which the wider development of the area would proceed? Thanet is an Assisted Area, and is designated so until 2013; however all Grants for Business Investment and Research and Development Grants have recently been cancelled. Like all local authorities, Thanet District Council is currently undergoing a significant cost saving exercise and will not be in a position to provide further pump-prime business support during the current spending period without access to further Government-sponsored initiatives. The Thanet Employment Land Review (2010) confirms that Thanet benefits from small business development in modest accommodation. However, there is a pressing need to also attract larger businesses capable of greater investment and job creation opportunities. The greatly increased accessibility to London and Europe that would be unlocked through RGF investment is viewed as the catalyst for this investment. 11. What is the minimum amount of RGF support required to allow the project to proceed? Please provide analysis and evidence to justify the amount and timing of support, by year, and specify the type of financial instrument envisaged (e.g. grant, loan, loan guarantee). The RGF support as requested is required for the successful delivery of the project. While the Thanet Parkway Station will not require ongoing public support once it is operational, as revenues are forecast to exceed operating costs, the initial capital cost results in the scheme not being commercially viable, namely financially positive. However, through improving the areas connectivity the scheme not only brings these gains to the local economy it delivers at the same time net benefits to society as whole. The Parkway Station delivers a high social return that exceeds the project costs (more than five-fold), but because the benefits cannot be recouped by any individual actor the investment relies on public funds for its realisation. The project hence is a high value added investment and excellent use of public funds in its own right, but in addition delivers against the objectives of the RGF. It is important to contrast this against private sector projects where the main objective is the creation of jobs and the full draw on public sector funds represent a net societal cost.

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Section C: Sustainable Private Sector Growth

The Regional Growth Fund seeks to encourage sustainable private sector-led growth. This section will develop Governments understanding of the market context for the investment, and the likelihood that it will be deliverable and sustainable over the long term. Questions 12-15 make reference to goods and services identified in Question 3. Where more than one good or service has been identified, the following questions should be answered separately for each good/service. 12. Using the pro-forma in Part 2, Section A of the application form, please provide a simplified forecast project Profit & Loss and cashflow over the economic lifetime of the private sector aspect of the project and explain the basis for each of the assumptions underlying the cashflow. The answer to this question should refer to goods and services identified in Question 3(a). See Part 2, Section A of the application form. Responses to parts (a) and (b) in Questions 13-15 should correspond to answers provided to the corresponding sub-sections of Question 3 i.e. when answering Questions 13(a), 14(a) and 15(a), responses should correspond to the goods and services identified in Question 3(a). When answering Questions 13(b), 14(b) and 15(b), responses should correspond to the goods and services identified in Question 3(b). 13. What are the characteristics of the market for the product(s) or service(s) directly or indirectly offered as a result of the project? Please refer to product/service volumes and margins and identify key market participants. (a) Market for goods or services directly offered as a result of this investment? The investment in the Thanet Parkway Station and the linespeed improvements will benefit Southeastern, who currently operate the Integrated Kent Franchise. This includes domestic high speed services between Kent and London St Pancras via High Speed 1. The rail markets considered as part of the rail industry standard approach to assessing the impact of new stations reflects the nature of the local rail network. Five markets were identified, with associated destination stations used to represent the specific rail markets based on the direction of travel from Thanet Parkway. These are London, Ashford, Canterbury, Dover and Margate.

See Annex 3 for a detailed technical note on the characteristics of the market for the proposed air service from Manston (Kent International) Airport and

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(b) Market for other goods or services that may be indirectly created as a result of this investment? The indirect economic impacts of the project do not rely on bringing to the market goods or services that otherwise would not be supplied, but rather contributing to the success and competitiveness of the local economy by providing increased connectivity to the rest of the wider South East (including London) as well as internationally through Manston (Kent International) Airport. Bordered by water on three sides, East Kent is by nature disadvantaged in terms of accessibility and increased transport services can help alleviate this. With one of the countrys highest proportion of public sector jobs (in the top 20% of districts) and some of the South Easts highest levels of deprivation, the East Kent area is at risk of losing nearly 3,000 jobs from public sector retrenchment over the course of the next spending period. Improving the areas connectivity will help to mitigate negative consequences by encouraging an additional 0.5 million per year of inward investment and increase exports (to the rest of the UK) by more than 12 million. 14. How is the market forecast to change over time? (a) Market for goods or services directly offered as a result of this investment? The forecast change over time for rail demand has been based on rail industry standard guidance (Passenger Demand Forecasting Handbook) and is largely driven by GDP per capita forecasts for the South East of England, population and car ownership forecasts and the effect of proposed rail fare increases. The compound annual growth rates for the rail markets examined are between 1-1.7%. For the twice-daily air service between Manston (Kent International) Airport and it is assumed that the demand will not mature until the third year of operation, with a corresponding view on the number of passengers using the Thanet Parkway Station. (b) Market for other goods or services that may be indirectly created as a result of this investment? The East Kent economy is forecast to lose some 8,000 private sector jobs between 2008 and 2012, driven partly by a continuing decline in manufacturing and partly by a drop in demand in consumer services following the recession. In the following years, a slow recovery of jobs is expected in construction, consumers services and, to some extent, in business services. Additionally, almost 3,000 jobs are expected to be lost in East Kent from public sector retrenchment over the course of the current spending period (to 2014/15). The project is well positioned to mitigate the negative impacts of the market trends as well as help speed up the subsequent recovery. The resulting expansion of the East Kent economy amounts to 10 million in increased GVA and 22 million in increased turnover/output by 2020. As the funding goes to build physical infrastructure that has a lasting impact on East Kent (rather than being a temporary subsidy), these benefits are entirely sustainable over time.

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Regional Growth Fund / Application form Part 1

15. What assumptions are being made about market share? Include as appropriate information on customers, suppliers and competitors to support these assumptions. The projects impact on growth derives from supporting the East Kent economy in general, rather than any particular activities. A more relevant illustration of the impact of the project is how it helps local businesses compete with the rest of the country. Our analysis shows that addressing the current connectivity barrier will enable East Kent to increase sales to the rest of the country by more than 12 million per year by 2020.

16. What are the key risks, constraints and dependencies (e.g. planning consents) in executing the business plan and investment proposal? Please demonstrate how these will be managed. (a) Risks etc. around activities carried out by project partners, directly related to the investment, as set out in Question 4(a)? In construction terms, the Thanet Parkway Station is a relatively straightforward scheme. A high water table hinders drainage on the proposed site for the station; however construction of the adjacent East Kent Access (EKA) road, which is presently underway, will provide information on site conditions which can be incorporated into the next phase of design as well as providing new drainage outfalls which the station facilities can connect into. The rail line on which the Parkway Station will be constructed is on a gradient and the safety case for the station will have to demonstrate safe operation of trains can be reliably achieved. No trains will terminate, turn back, split or combine at the station meaning the gradient is not a safety issue. The station will be located around midway between two automatic level crossings, which will necessitate some minor changes to signalling controls. The modification proposed will not affect the existing level crossing orders nor increase the length of time barriers are lowered. All modifications to existing signalling systems carry some risk of scope creep and Network Rail is investigating an alternative option of closing one or both level crossings. This would bring significant safety benefits to the rail network in the Thanet area. Planning consent will be required but is not felt to be a specific risk as the land is appropriately zoned and the visual impact will be negligible compared to the EKA road which bounds the entire north side of the site. Southeastern would be required to submit a bid for a revised timetable to accommodate the additional station stop in all services. There is no reason for this to be rejected as no other TOCs are affected and sufficient capacity exists in the current timetable to accommodate this. Southeastern would not be required to recruit additional staff to operate the new station, however the Department for Transport (DfT) will have to give permission for the Franchise Agreement to be varied to add the station to the franchise estate. As the forecast revenue exceeds the estimated increase in operating cost, DfT

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Regional Growth Fund / Application form Part 1

has indicated that it is content to authorise such a variation. Southeastern and Network Rail have both registered their full support for the scheme. (b) Risks etc. around activities not directly related to the project, in particular those set out in Question 4(b)? The project will act as a catalyst for further private sector investment, such as the development of the commercial land at the Manston and Eurokent Business Parks and providing attractive sites for employment related to the investment in the Thanet Offshore and London Array Wind Farms. To support the realisation of these non-direct impacts, local land zoning and the granting of consents will be required. This will be the responsibility of Thanet District Council which is fully supportive of the project and have already sought to prepare the ground by identifying growth points for facilitating the full benefits of the project. 17. How does the project fit with the economic priorities and prospects of the locality as a whole? Where possible, this should be linked to a wider economic vision for the area and actions and policies of local partners. Please be specific when identifying economic priorities, actions and policies, and explain how the project links with them. The Access to East Kent Regional Growth Fund bid, prepared and submitted by Infratil Airports Europe Ltd and Kent County Council, has received the formal endorsement of Thanet District Council, Network Rail, Southeastern and each of which will play a significant role in delivering its constituent projects (see attached letters of support). The bid has also received the endorsement of the local employers and stakeholders listed in the attached covering letter from Cllr Paul Carter (Leader of Kent County Council) and Cllr Bob Bayford (Leader of Thanet District Council), as well as Laura Sandys, Member of Parliament for Thanet South. The development of a Thanet Parkway Station adjacent to Manston (Kent International) Airport, combined with journey time improvements between Ashford and Ramsgate, is identified as a strategic priority for East Kent in 21st Century Kent: a blueprint for the Countys future and Growth without Gridlock, Kent County Council (KCC)s 20-year Transport Delivery Plan for Kent, which was published in December 2010. Growth without Gridlock can be accessed through the County Councils website at: http://www.kent.gov.uk/news_and_events/news_archive/growth_without_gridlock.aspx The Parkway Stations potential to facilitate the sustainable expansion of Manston Airport is also recognised in KCCs draft Local Transport Plan (LTP) for Kent (20112016), which can be accessed at: www.kent.gov.uk/ltp3. The final LTP will be adopted by KCC in April 2011 and will include a specific commitment to progress the development of the Parkway Station and St Pancras to Ramsgate Journey Time Improvement Scheme in partnership with Infratil Airports Europe Ltd, Network Rail and Southeastern. The recently agreed Local Investment Plan for East Kent, co-ordinated through the Local Strategic Partnership, is a partnership between the Homes and Communities Agency and four local authorities (Canterbury City Council, Dover District Council, Shepway District Council and Thanet District Council). The Plan sets out key priorities for the sub-region. The first strategic spatial priority is Manston and Central Thanet and
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Regional Growth Fund / Application form Part 1

this includes the Airport, the surrounding business parks and the provision of a Thanet Parkway Station combined with faster links to High Speed 1 at Ashford. The adopted Thanet Local Plan (2006), the emerging Local Development Framework Core Strategy and other documents all identify the need to rebuild the Thanet economy, to attract high quality business and to bring good jobs to the District. Manston Airport, the Manston and Eurokent Business Parks and the Port of Ramsgate are regarded as critical in this respect. Specifically, the development of the Airport and the improvement of the rail infrastructure serving Thanet is viewed as a catalyst to attracting significant inward investment. The East Kent Access Road has been delivered by Kent County Council in stages to improve the connectivity between Thanet, Dover and Canterbury; particularly in support of Pfizer Ltd, which is East Kents largest single employer. The road also improves connectivity between Manston Airport and the Ports of Dover and Ramsgate and would provide direct access to The Thanet Parkway Station at Cliffsend. This would be of particular benefit to commuters and businesses from the Deal and Sandwich areas, who have not benefitted from the launch of Southeastern High Speed rail services to date. The new Turner Contemporary art gallery in Margate is scheduled to open in April 2011 and grant aid has recently been secured for the development of a Heritage Amusement Park on the site of the former Dreamland attraction in the town. The provision of faster rail services to London via the Thanet Parkway Station would significantly increase the ability of these exciting new cultural venues to attract visitors from the capital and further afield. It would also enable Margate to further develop its creative and media sector by facilitating linkages with London-based companies. Within the past two years, two design agencies have moved from London to the town; however there is vast capacity for more to take advantage of Thanets relatively low property values and thriving arts community, which would strongly support the areas regeneration. 18. Please provide a list of key project personnel who will be involved in delivering the project, including CVs. Kent County Council Paul Crick, Interim Director of Integrated Strategy and Planning John Farmer, Head of Major Projects, Kent Highway Services Tom Pierpoint, Public Transport Team Leader, Kent Highway Services Paul Lulham, Transport Planner, Integrated Strategy and Planning

Infratil Airports Europe Ltd Charles Buchanan, Chief Executive Officer, Manston Airport Paula Horne, Group Manager Passenger Development, Infratil Airports Europe Ltd Graeme Sweenie, Chief Commercial Officer, Infratil Airports Europe Ltd

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Regional Growth Fund / Application form Part 1

Network Rail David Hignett, Commercial Scheme Sponsor (Kent), Network Rail

19. Who will be responsible for any liabilities associated with the project e.g. cost overruns or shortfalls in receipts? Kent County Council will be responsible for any liabilities associated with the Thanet Parkway Station element of the project; Network Rail will be responsible for any liabilities associated with the St Pancras to Ramsgate Journey Time Improvement Schemes; and Infratil Airports Europe Ltd will be responsible for any liabilities associated with the Manston (Kent International) Airport Master Plan. 20. Is the proposed level of RGF support considered to be compliant with European State aid regulations? Please give a brief explanation of your assessment. It is considered that the proposed level of RGF support to Infratil Airports Europe Ltd is compliant with European Union State Aid regulations as Thanet lies within a region eligible for Regional Aid, as specified in the United Kingdom Regional Aid Map (20072013). The Regional Aid threshold for the Thanet District Wards included in the United Kingdom Regional Aid Map (2007-2013) is 15%. However, the proposed level of RGF support to Infratil Airports Europe Ltd (IAEL) represents significantly less than 15% of the total medium-term investment proposed by IAELs Manston (Kent International) Airport Master Plan in the Airports infrastructure, staffing and services. 21. Are any of the project partners making (or intending to make) a separate bid to the RGF? If so, please identify by project title and indicate whether these bids are considered to be mutually exclusive. At its meeting on 6th January 2011, Kent Forum which brings together the Leaders of Kent County Council and the Kent District Councils endorsed additional support for the Access to East Kent, Hadlow College Betteshanger Sustainable Futures Campus, and University of Kent Green Technology Park RGF bids. Kent County Council considers these bids to be compatible and discrete. 22. Is the project receiving or likely to receive other public support of any type? If so, please provide full details. N/A 23. Please provide a summary of the public support that any private sector partners involved in the project have received, or applied for, in the last three years. N/A

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Regional Growth Fund / Application form Part 1

Section D: Costs and Benefits

In order to ensure good value for money for the taxpayer, it is important that the additional economic benefits associated with supporting a project exceed the costs of Government support. This section seeks to identify and characterise the full range of economic costs and benefits associated with the intervention. 24. Please provide an approximate estimate of the spread of employment impacts, by Local Authority District where possible. Please fill in the table below, an example can found in the application form guidance. Employment impacts (both direct and indirect) are expected to occur in more than one local authority district. The table below shows the estimated approximate spread of impacts. The location refers to the workplace not the place of residence. Area Thanet District Rest of East Kent area (Dover and Canterbury Districts) Approximate proportion of employment impacts 60% 40%

Total

100%

25. We need to know the estimated number, type and location of jobs that will be created through this investment. These jobs can be directly or indirectly created. Indirect jobs can arise through: - the activity of the investment, (ie through the supply chain); and - wider economic benefits enabled or unlocked by the investment. Please set out the gross number and type of jobs that will be: (a) directly created and safeguarded by the project itself, using Part 2, Section B of the application form. (b) indirectly created and safeguarded by the project. Where sufficient information and certainty exists, set out details using Part 2, Section B of the application form. Where less specific information is known, use the space below to summarise the indirect employment outcomes you expect from this investment. Please describe below how these impacts will occur (i.e. through the supply chain of the project itself, or as a result of the economic activity enabled by the investment), providing as much detail as possible in terms of employer name, job title, skill level, salary level, location and timing of impact. Part 2, Section B of the application form has been completed to provide the information requested. The direct employment impacts have been identified for the projects constituent schemes. To estimate the wider economic benefits to East Kent from the direct economic benefits and the increase in connectivity and attractiveness of the area, an economic forecasting tool SpECTra (Spatial Economic Consequences of Transport) has been used. The model helps to understand how an initial shock or change to an economy affects the wider economy through changes in production costs, prices, wages, incomes and productivity. SpECTra takes as inputs the direct impacts of a project and
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Regional Growth Fund / Application form Part 1

simulates the consequences on market transactions between economic sectors and households (product markets, labour markets etc) through changes in productivity, prices, wages, output and use of labour. In addition, wider economic benefits enabled or unlocked by the project have also been assessed drawing on identified economic development opportunities. Whilst any estimate carries uncertainties, the findings are anchored in an in-depth understanding of how the local economy works, demonstrate the economic relationships that cause the impacts to come about and fully take into account secondary indirect impacts that may arise; including, importantly, the crowding-out of profitable private sector activity nearly always caused by publicly funded investment. The employment impact of the project will result from both the direct and indirect jobs associated with the project and the wider economic benefits unlocked by the proposals. The introduction of twice-daily direct air services between Manston (Kent International) Airport and will create 23 additional direct jobs at Manston Airport. Along with the three jobs created by the opening of Thanet Parkway station, there are estimated to be 26 direct jobs. Arising from the investment to address the existing transport barriers, SpECTra identifies that the increased airport activity and improved rail services will create additional indirect benefits as additional demand for locally sourced inputs is created and as the increased attractiveness of East Kent causes an expansion and increased investment in the local economy. It is estimated that these effects will lead to a further 156 jobs. Furthermore, should the initial linespeed improvements delivered as part of the project be increased as part of Network Rails St Pancras to Ramsgate Journey Time Improvement Scheme, the effect on indirect jobs new to East Kent would increase to 243 jobs. Building on the investment in the project, which itself builds upon recent infrastructure investment in Thanet and East Kent, such as the East Kent Access Road, there is significant potential for wider economic benefits to be unlocked. DTZs (November 2010) Thanet Strategic Context report concludes that the Thanet Parkway Station and Journey Time Improvement Scheme represents the: one major infrastructure investment that has huge potential to transform both the economic and social prospects of Thanet. DTZs forecast that these interventions, together with the East Kent Access road, will create an additional 150 jobs each year between 2011 and 2024 on top of the baseline forecast for the District. For the purposes of the Access to East Kent RGF bid, it is assumed that approximately 100 of these jobs will be directly attributable to the Parkway Station and Journey Time Improvement Scheme. The catalytic effect of this investment will be magnified through its integration with the Airport investment. Among the multiple benefits identified by DTZ are: Vastly improved passenger access to Manston (Kent International) Airport, placing Manston within a reasonable journey time of London and enabling the Airport to compete more effectively for passenger traffic. The Airports Masterplan (November 2009) forcasts future activity levels reaching 4.75 million passengers per annum by 2033. This is estimated to generate 2,800 jobs by 2018 and 6,000 by 2033. The introduction of the twice-daily service is a major first step to enabling the Masterplan to be achieved.

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Regional Growth Fund / Application form Part 1

Increased attractiveness of the Manston and Eurokent Business Parks as locations for businesses which require staff to travel to or from London frequently at both sites land is available for mixed use development, each of which could support 1,500 jobs when fully developed. Increase in potential demand for housing in Thanet from commuters both because of the improvement in rail journey times and also the ease of accessing the station. Greater attractiveness of the area for the self employed and small businesses servicing London clients (as well as continental clients) to take advantage of the relatively cheap housing and quality of life offer in Thanet. Provision of attractive sites for investment related to the Thanet Offshore and London Array Wind Farms. Approximately 130 jobs are estimated to be directly created in maintenance and operations roles. For each of these jobs, a further 2-3 jobs is expected to result locally, as long as appropriate sites are available and the existing transport barriers are addressed. Collectively these benefits delivered by the project would boost demand for homes in Thanet, encourage investment in the housing stock, create construction jobs and boost retail spend, while facilitating a change in the social structure of the District. 26. What, if any, research and development activities are planned as part of the project? Please describe these activities below (including location, nature of activities, required inputs and expected outcomes) and complete the R&D expenditure profile in Part 2, Section C of the application form. There are no direct research and development activities which are included as part of the bid. However, the introduction of a twice-daily air service between Manston (Kent International) Airport and and the construction of the Thanet Parkway Station would provide considerable benefits to the largest pharmaceutical R&D centre in Europe, Pfizer Sandwich. Pfizer Ltd is still the largest private sector employer in East Kent with 3,000 employees despite the fact that it used to employ a workforce of over 5,000. There is growing concern that without ongoing investment into the area, the company may further decrease in size. Investment in the area would support Pfizers wish to see more companies locating in East Kent in order to give a positive boost to the declining economy. The key to attracting businesses to the area is good connectivity and thus introducing a daily international air service and a new station with High Speed rail services to London would significantly support the existing local infrastructure and stimulate increased private sector investment. 27. What, if any, skills and training provision will be associated with the project? Please describe these activities below (including location, type of training and qualification level) and where possible complete the skills and training expenditure profile in Part 2, Section C of the application form. It is anticipated that the main areas in which additional staff would be recruited by Manston (Kent International) Airport as part of this project service would be in Airport Fire and Rescue, Security and Customer Service. All staff would be required to be fully trained to become a fully operational member of their teams. In the case of Airport Fire
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Regional Growth Fund / Application form Part 1

and Rescue, this would cover all aspects fire and rescue, and specialised for airport situations. It would include career development training for existing members of staff to be able to take on more senior roles within the airport fire service. Specialist Aviation Security training would be provided to the additional security recruits, including threat assessment, personal and baggage searching. Customer Service staff would be trained in the use of airport and airline systems, as well as general customer service techniques. 28. Please describe briefly, summarising and citing supporting analysis and evidence where possible, the wider secondary benefits/costs associated with the project. These cover non-employment related impacts only, as employment impacts have been addressed in Q25. If any of these wider benefits are valued or monetised in a Green Book compliant manner, the assumptions underlying the valuation must be clearly set out. Wider impacts are benefits/costs that are not directly captured by the recipients of RGF. The following list gives examples of wider impacts. However, this list is only indicative and it may not be applicable for all applicants. Projects do not need to produce wider secondary benefits in order to be eligible for RGF. Where possible please include details of when and where these benefits will accrue. It is recommended that the answer to this question is no longer than 2000 words. (a) Wider economic effects in the locality or nationally not captured in the rest of the form if possible making reference to the identity of beneficiaries and the nature of these benefits and how these are related to the objectives of the scheme if appropriate. (b) Environmental impacts - including positive or negative impacts upon greenhouse gas emissions, climate change adaptation, air quality, water quality, biodiversity, quality of place, noise, land remediation, waste, or the development of green technologies; (c) Transport economic efficiency e.g. safety enhancements and time savings accruing to other businesses and consumers: Please present in the form of an Appraisal Summary Table (AST): http://www.dft.gov.uk/webtag/documents/project-manager/pdf/unit2.7.2.pdf (d) Real option value - where the project creates a significant incremental option to make follow-on investments, or flexibility to alter the investment at some point in the future; (e) Any implications for social cohesion and big society; and (f) Integration to national or local government policies and strategies. Introduction The project will deliver support for private sector investment and generate new jobs for East Kent. As well as unlocking the potential of the area, the proposals will have a number of secondary benefits, as captured under Department for Transport (DfT) appraisal guidance (webTAG). A Green Book compliant appraisal has been constructed to assess the full economic impact of the introduction of Thanet Parkway station. The project has been assessed over a 60 year appraisal period in line with Green Book guidance. The analysis demonstrates a Very High VfM Case with a benefit to cost ratio above 5:1. The incremental revenue generated by the rail scheme is greater than the increased
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Regional Growth Fund / Application form Part 1

operating costs to the rail industry indicating that no ongoing subsidy would be required and a contribution to DfT could be made. The Appraisal Summary Table (AST) presented in Annex 6 provides a summary of the costs and benefits associated with the scheme. All monetary values are presented in 2002 prices and values for the 60 year appraisal period, calculated using appropriate discount rates specified within the Green Book. Demand Forecasting Process The demand forecasting process for the proposed Thanet Parkway Station uses an elasticity based station catchment tool that assesses the impact of changes to the rail network on the relative Generalised Journey Times (GJTs) of competing stations. GJTs are calculated in a manner consistent with the Passenger Demand Forecasting Handbook (PDFH). For this project, geographical catchment areas have been generated for the Thanet Parkway Station for a range of in-scope rail markets. The catchment areas produced in this process are used to generate forecasts for demand, revenue, changes in journey time and changes in highway distances travelled. Forecast changes in journey times reflect the impact of introducing Thanet Parkway on full journey times, incorporating changes to both rail GJTs and to station access times. Both reductions in journey times for users of Thanet Parkway and increases in journey times for passengers on through services making an additional stop are considered in producing a net position. Forecast changes in highway distances travelled consider the net impact of the project on station access distances. The station catchment tool forecasts are split by ticket type using MOIRA, the rail industry standard demand forecasting model. These splits by ticket type are subsequently converted into splits by journey purpose using factors derived from actual ticket sales data taken from the National Rail Travel Survey (NRTS). Journey purpose splits are applied to the demand forecasting outputs within the economic appraisal to quantify the impacts of the project upon business and consumer users independently. Revenue Forecasts

The total net revenue (all monetary values given in 2010 prices and values) generated by this project is estimated to be 380,000 in 2015. With projected station operating costs totalling 196,000 for the same year, this project is expected to produce an annual operating surplus of approximately 185,000 in 2015, equivalent to an operating ratio of nearly 2:1.

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Regional Growth Fund / Application form Part 1

User Benefits Time savings received by rail users as a result of the introduction of the new station are monetised using Value of Time (VoT) assumptions as set out in webTAG, with specific VoT values used for each journey purpose.

As a result of the forecast journey time savings, the introduction of the Thanet Parkway Station is forecast to deliver 4.3m of benefits to business rail users and a further 8.2m of benefits to consumer rail users in present value terms over the 60 year appraisal period. Non User Benefits The non-user benefits associated with the new station reflect the change in the external costs of car use as a result of a reduction in highway distance travelled. Unit rates per vehicle kilometre removed from the highway are provided as part of webTAG for each of the following categories: Decongestion Infrastructure Accident Air Pollution Noise Climate Change Indirect Taxation In the forecast year of 2015 it is estimated that there will be a reduction in the annual highway distance travelled by approximately 0.1 million kilometres for business highway users and by 1.6 million kilometres for consumer highway users. The overall net reduction results in positive benefits accruing in all of the categories listed above, excluding Indirect Taxation, which shows a disbenefit to reflect the loss in fuel tax revenues received by Central Government as a result of the reduction in highway distance travelled. In terms of highway decongestion, the introduction of the new Thanet Parkway Station is forecast to deliver 1.9m of benefits to business highway users and 3.8m of benefits to

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Regional Growth Fund / Application form Part 1

consumer highway users in present value terms over the 60 year appraisal period. As with user benefits, demand growth rates are applied to non user benefits within the economic appraisal. Non Quantified Benefits The current welfare bill for Thanet District amounts to 180m per year and the population is characterised by low car ownership, disadvantage and ageing residents. The project will support social cohesion through providing greater employment opportunities, encouraging investment and associated economically active individuals and the provision of improved transport links. Improving the perception and reality of East Kent will support the realisation of opportunities provided by available land, existing private sector investment as at Westwood Cross and proximity to Europe. 29. For bids that involve a package of smaller projects, please identify and characterise the additional benefits associated with implementing the investment as a package rather than individual projects. This bid provides an integrated solution for the improvement in connectivity and access for East Kent. It comprises of three schemes: Implementation of the Thanet Parkway Station; Implementation of Phase 1 of the St Pancras to Ramsgate Journey Time Improvement Scheme; and, Introduction of a twice-daily air service from Manston (Kent International) Airport and

Each scheme in its own right will deliver an improvement for East Kent in terms of its accessibility and associated benefits supporting the local and regional economy. Through the integrated implementation of the schemes the benefits of each will reinforce those of the others and result in a greater overall impact. The provision of a high quality air link between Manston and enabling onward international connections, will support the safeguarding of existing jobs in East Kent and attraction of new private sector investment, including inward investment. The attractiveness of the air service will be strengthened by the provision of high quality public transport surface access via Thanet Parkway Station. The provision of public transport access will contribute to addressing local highway congestion and environmental issues arising from Manston Airports expansion

Therefore the schemes strongly complement each other and together will unlock a stepchange in the perception of East Kent as a place to invest, work and live, enabling a sustainable private sector-led economy to succeed.

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Regional Growth Fund / Application form Part 1

Section E: Equality
30. Do you envisage that the project or its outcomes will have a disproportionate impact, whether positive or negative, on any of the following groups? (a) minority or majority ethnic communities (b) women or men, including transsexual people (c) disabled people (d) lesbians, gay men, bisexual or heterosexual people (e) people with particular religious or non-religious beliefs (f) people in particular age groups If yes, please describe the impact or impacts the project is expected to have, the group or groups which may be affected, and any steps, if applicable, which have been taken to mitigate the impact(s). No; however this project will have a positive economic impact on all Thanet residents and businesses through its transformative effect on the Districts connectivity, its unlocking of thousands of direct and indirect private sector jobs in East Kent and reduced dependency on public sector welfare and employment.

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 Crown copyright 2010 You may re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit http://www.nationalarchives.gov.uk/doc/open-

government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk. This publication is also available on our website at http://www.bis.gov.uk Any enquiries regarding this publication should be sent to: Department for Business, Innovation and Skills 1 Victoria Street London SW1H 0ET Tel: 020 7215 5000

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