Business model of Battersea Power Station flawed

The business model of the development of the Battersea Power Station is flawed. It only needs a slight shift in interest rates or property taxes, or for the value of the pound to rise relative to Asian currencies for the foreign investor led property market boom to collapse according to Bloomberg.

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It is this flawed and precarious property bubble that Transport for London (TfL) is sinking billions of pounds of public money to prop up.

At the recent public inquiry into the Northern Line Extension the response from the representatives of TfL to the many compelling arguments against the scheme made in Battersea Power Station Community Group’s objection was to insist the NLE was not aimed at solving local transport infrastructure issues but to enhance property values in the so called Vauxhall Nine Elms Battersea Opportunity Area.

In this time of austerity can this really be a good use of public money? It is also probably one of the most useless, unwanted and extravagant public infrastructure projects ever proposed.

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London’s status as a magnet for foreign property investment was burnished in the years after the financial crisis by an investor-friendly tax regime and the falling value of the pound. That may be changing.

A new capital-gains tax on homes sold by people living abroad and a growing British economy that’s lifting the currency may dull the capital city’s appeal to property buyers from abroad. Chancellor of the Exchequer George Osborne announced the new capital-gains tax in a statement to Parliament on Dec. 5. It will apply to “future gains” after the tax goes into effect in April 2015, he said without specifying the size of the levy. Capital-gains tax rates for second homes of U.K. residents currently range from 18 percent to 28 percent. Labour Party leader Ed Miliband and Nick Clegg, head of the Liberal Democrats, which govern in a coalition with Prime Minister David Cameron’s Conservative Party, support an annual levy on houses valued at more than 2 million pounds known as the mansion tax. Cameron opposes the idea.

Other than that, South Asian buyers account for two-thirds of new London homes sold before completion, according to Land Securities Group Plc, the largest U.K. real estate investment trust. The high-end market is dependent on pre-sales to overseas buyers to help get development finance and deal with rising land costs, Michael Lister, a lecturer at University of Westminster, said in a Nov. 22 interview. Singapore and Hong Kong, two destinations also favored by south Asian buyers, have introduced measures to cool property prices and curb speculation. Singapore linked borrowers’ maximum debt levels to their incomes and raised transaction and capital-gains taxes. Hong Kong has increased minimum down payments six times in fewer than three years and in February doubled stamp-duty taxes for all properties over HK$2 million ($258,000).

To end with, the pound plummeted against a basket of major currencies after the collapse of Lehman Brothers Holdings Inc., making London homes a relative bargain for wealthy investors and buyers from emerging Asian economies. The Singapore dollar gained 60 percent against the pound from September 2007 to June this year and the Malaysian ringgit climbed by 50 percent. Since then, the pound has risen 6.8 percent and 12 percent respectively against the Asian currencies.

Farmer of EC Harris said:

“One of the key drivers around demand in that market, particularly from the Far East, has been the relative weakness of sterling over the last three or four years,”“The improving economy is good for U.K. Plc but it might make residential investment slightly less competitive or good value in the eyes of the international community.”

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What a way to run a Railway Inquiry

From day one TfL (Transport for London) made it clear the proposed Northern Line Extension (NLE) was not about addressing transport infrastructure but about enhancing property values in the so called Vauxhall Nine Elms Battersea Opportunity Area.

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The only question the NLE seems to address is how, in the middle of a freezing winter, can a City Fat Cat wake up in his £30m glass and steel penthouse, that desecrates the Art Deco architectural integrity of the Power Station and, North American style, get to his City penthouse office “desk” without going outside. Going to “work”  attired in just summer casuals- slacks and short sleeve shirt?

Answer have public money spent on running an underground tube to your door step so you can take a private lift down to the platform ( via the shopping mall ) and get on a city branch train direct to the City.

Aside from the ludicrous cost of this white elephant toy train for the rich there is the fact that all those commuters living south of Kennington will have to change trains there to get on the City Branch.

Since 1983 the Battersea Power Station Community Group have drawn attention to the neglect of the Battersea Power Station by a succession of owners. They have criticised inappropriate and harmful development proposals and proposed their own alternatives, such as the People’s Plan of 1986. Recently they released their ‘Proof of Evidence’ on the Northern Line Extension in Battersea. A summary of what came out of it:

“We support the principle of connecting the tube to Battersea Power Station, provided it was publicly funded and serves the whole of north Battersea, including Battersea Park, Latchmere and Clapham Junction, reducing unit costs. We also feel that transportation improvements could be achieved more quickly and at lower cost if other transort modes had also been considered. The current proposal represents poor value of money.

We do not consider that having a tube station in east Battersea to be a condition precedent for the succesful redevelopment of the Battersea Power Station site or other sites in the VNEB ”Opportunity Area” would certainly not be considered. The development of these sites has gone ahead on the basis of existing transport infrastructure. The justification that the NLE would support development at higher densities necessary to pay for it is circular and illogical.

We fear that, despite the arguments advanced at this inquiry, the decision to build NLE has already been made. The NLE appears in government budgets and announcements where is it talked about by politicians as if already agreed. Implementation of planning permission 2009/3575 is impossible without the NLE being built. Nevertheless we hope that – in the light of the evidence presented- the outcome of this inquiry will confound the expectations of TfL and Wandsworth Council, and will cause transport provision in east Battersea to be reconsidered.”

Connecting Battersea to the tube network (NLE or some other line) is a wider public good. The developer of the Battersea Power Station site should not be asked to pay for this.

To conclude with, transportation improvements could be made more quickly and at lower costs if other transport modes had been considered. The current proposal represents very poor value for money. Connecting the tube to Battersea Power Station would however be supported, provided it was publicly funded and serves the whole of north Battersea, including Battersea Park, Latchmere and Clapham Junction, reducing unit costs.

For a full critique of the NLE see Proof of Evidence 13-12-13

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Opponents of the Northern Line Extension, and why they’re right

At the start of this year, January 28, there was already opposition against the extension of the Northern Line. Liberal Democrats in Lambeth have suggested a Docklands-style light rail or monorail link between Waterloo, Vauxhall and Battersea as an alternative. Local campaigners also question the transport benefits of adding an extra branch to an already complicated and overcrowded rail route like the Northern line.

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“The only way to relieve the existing crush let alone cope with the massive influx of fresh commuters being generated by the Vauxhall Nine Elms Battersea new town is by a completely separate system,” say the Lambeth Liberal Democrats in an unsigned comment piece published on the party website.”

”We’ve suggested it before and we’ll say it again, there needs to be a thorough appraisal of a light rail elevated transport system like the Docklands Light Railway.”

”Common sense suggests that this would be massively cheaper than a deep-bored tube line and it could even be a 21st-century monorail system rather than the slightly Trumpton-esque DLR.”

”It could also run all the way to Waterloo – maybe attached to the existing railway viaduct – and later linked to the DLR. After all there’s massive regeneration going on south of the river all the way from Wandsworth to Southwark.”

See the full article.

More recently, the Guardian reported about the concerns of Battersea Dogs & Cats Home:

Battersea Dogs & Cats Home is demanding Transport for London (TfL) reconsiders plans for the Northern line extension over fears it will force its animals to be relocated.

The rescue home, in Battersea Park Road, Battersea, is within touching distance of a new station planned to open at Battersea Power Station.

Chiefs at the charity have said the welfare of the animals could be affected during construction, while the extension would mean the rescue home could not expand in the future.

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The Evening Standard reports that the rescue home has joined the Beefeater Gin distillery in nearby Kennington, to write to the Transport Secretary opposing being made to sell large swaths of property. It would have to vacate 70 per cent of its site on a 14-day notice, it says, under legislation proposed by TfL.

In the letter to Patrick McLoughlin, seen by property website CoStar News, home chief executive Claire Horton calls TfL’s sweeping powers “excessive”, adding that the transport body “has insufficient understanding of the complexity and sophistication of the facilities at our building”.

Chivas Brothers, operators from the Beefeater distillery, has also written objecting to TfL’s plans to compulsorily purchase land for a ventilation shaft. The company says dangers posed by the construction would prevent it operating on the site.

Enough reasons to reconsider the Northen Line Extension, so it seems.

Michèle Dix, managing director of planning for TfL, said: “We are working through a Transport and Works Act Order process and are not expecting a decision on the Northern line extension from the Government until summer 2014.

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Public inquiry into proposed Northern Line Extension to Nine Elms and Battersea

Transport for London (TFL) is proposing to extend the Northern line (Charing Cross branch) to Battersea, via a new station at Nine Elms, as part of wider plans to regenerate the Vauxhall, Nine Elms and Battersea area.

If you’re interested in this, view the provisional outline programme for public inquiry, which is running the next four weeks.

This Northern line extension (NLE) forms part of wider plans to regenerate the Vauxhall, Nine Elms and Battersea area.

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Following public consultations in 2010 and 2011, the Council’s Cabinet approved a recommendation to support this preferred route (January 2012 Cabinet Report). However, in response to community concerns, TfL was asked to do some further design work and analysis, particularly around the locations of the shaft.

TfL has now produced an update leaflet on the consultation and work so far. Further consultation is proposed over the coming months. You can find out more or sign up for regular updates at the TfL Northern line extension page.

The extension of the Northern line is part of wider plans to improve public transport in the area to respond to levels of development expected in Vauxhall and Nine Elms. Additional public transport is needed to support this new development and to benefit existing residents and businesses.

Less pressure on Vauxhall station and relief to the existing Northern line south of Kennington. The extension is a partially privately funded project by the site developers, SP Setia and palm oil conglomerate Sime Darby, with contributions from other sources such as the proposed new US Embassy. Subject to permission from the Secretary of State for Transport to build and operate the extension and the required funding being in place, construction could begin in 2015, and the extension could be open by 2020.Battersea will be the new southern terminus, with a new station at Nine Elms on Wandsworth Road. Both new stations will be in Travelcard Zone 2.

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Commuters warned of 30-minute wait for a train during Olympics

Tube and rail travellers will have to wait at least half an hour to board trains at “hotspot” stations during peak hours at the Olympic, transport chiefs admitted earlier this week.

Passengers will be held in lengthy queues or will have to walk to alternative stations, according to the first detailed forecasts of public transport and road demand during the Games.

The busiest station will be London Bridge, with Transport for London (TfL) forecasting delays of at least half an hour during the two-hour evening peak every day during the Games. Other “hotspots” include Bank, Canary Wharf, Canada Water and Bond Street.

                                                        Photo by: Qsimple

Volunteers will be situated at hotspot stations issuing travel advice and walking maps. The second stage of TfL’s public information campaign will start early next year and target commuters rather than business. It will profile a further 30 Tube stations and provide travel advice for weekend journeys.

Transport bosses admit that disruption will be much worse if they cannot achieve a 20 per cent reduction in passenger journeys during the Games by persuading commuters to change their travel patterns.

Major challenges are also expected on Monday August 13th, the day after the closing ceremony, with an exodus of teams and their entourages to airports on what will be the busiest day in Heathrow’s history.

In addition to this, motorists have officially been urged not to drive to or through “hotspots”, such as sports venues or cultural festivals and not to take the car during rush hours. People have also been recommended to work from home during the Olympics.

What they don’t seem to take into consideration is the fact that most people are not in a situation where they can work from home for a few weeks. They’re also failing to recognise that many people live miles and miles away from their workplace and walking in every morning would take hours. Then again, it would probably be quicker than getting on the tube…

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Battersea Power Station: Out of the frying pan into the fire

The horror story continues…

Nightmare on Nine Elm Street

The abysmal Vinoly plans for Battersea Power Station that we had all hoped were finally dead and buried with the collapse of previous owners REO has come back to haunt all who care about the beautiful building and the quality of life for all those living in its shadow and the surrounding area.

Just when you thought it was safe Architect Viñoly has been hired as “creative brain” behind developer Mike Hussey’s plan for a new stadium for Chelsea football club. AAAHHHHHHGGGGG……

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REO collapses into administration

Real Estate Opportunities has been put into administration by a UK judge after its owners failed to repay debts of £501m owed to Lloyds Banking Group and Ireland’s National Management Asset Agency (NAMA).

Administrators Ernst & Young have taken control of the Grade II listed red-brick building and will now either sell the site or the debt to recover the amount owed. The creditors initially called in the loans on 29 November and REO was inviting offers for its controlling stake in the site soon after.

Lloyds told the Guardian: “From the outset we have been determined to secure a buyer who will kickstart the regeneration of Battersea Power Station and we have done everything possible to give the owners both the time and financial support to achieve this.”


“However, after several months of discussions and still no acceptable offers on the table, administration is the only means we have to ensure that a sales process is put back on track. Without a financially stable owner, the site’s future remains unclear and that’s a situation we want to avoid.”

Keith Garner of the Battersea Power Station Community Group, which opposed the Irish company’s plans, called for the power station to be returned to the public sector, with repairs to be funded by the Heritage Lottery Fund.

The group said on its blog: “For the Battersea Power Station Community Group it is just another ‘new beginning’ as the fourth developer limps off stage to boos and jeers.”

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Olympian battle to get London’s transport fit for the Games…

A guaranteed budget of £6.5bn has been set aside to get London’s transport network up to speed in time for the Olympic Games next year. Thanks to the Games, this budget is also protected during present austerity measures.

With an estimated eight million visitors expected in London during July and August 2012, Graham Stephens, the co-ordination manager for the Olympics for Transport for London said that transport was marked as a potential problem right from the start: “The first advisers for the London bid helped us a lot when they stressed right at the beginning of the process that transportation was a major issue.”

Speaking about the legacy, Stephens pointed out that the transport system after the Olympics will be “significantly reinvigorated.” In the meantime, Londoners continue to face delays and line closures while the transport system goes through its upgrade.

For the full article click here

 

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TFL Confirms Cable Car for 2012 Olympics

Cable Car in Rio de Janeiro. Photo by Phil Whitehouse

Transport for London (TfL) has confirmed plans to open a cable car in time for 2012 Olympics, operating 50 metres above water between the Greenwich Peninsula and Royal Docks. The cable car is to transport up to 5,000 passengers (cyclists and pedestrians) per hour, between the two Olympic venues (the O2 arena and ExCel exhibition centre). The duration of the trip will be approximately 5 minutes one-way, cars running every 30 seconds. According to the Guardian, the system will be privately funded, costing £25 million provided by a number of potential operators.

London Mayor Boris Johnson claims that “A cable car spanning the majestic Thames would not only provide a unique and pioneering addition to London’s skyline, but also offer a serene and joyful journey across the river”. “Passengers will be able to drink in the truly spectacular views of the Olympic Park and iconic London landmarks whilst shaving valuable minutes from their travelling time”, he continues. Johnson believes that the cable car will provide a much-needed enhancement of cross-river options to the east of the city.

Former Labour Mayor Ken Livingstone does not object to the idea, as a cable car would be a development for the area. However, he states that “what is really needed is a road bridge that would carry more commuters.” The other alternative types of river crossing , according to professors of transport, are a rail-only bridge, a new river-ferry crossing, a walk and cycle-only bridge, and a car bridge adapted to take more public transport. The professors claim that a cable car would be the most sustainable of these. The question here, however, is whether a cable car is the most realistic option? Or is this an attempt to keep up with other major cities of the world?

Barcelona, Cologne, Hong Kong, Lisbon, New York and Singapore are amongst the cities
currently employing a cable car. Does TfL feel that London is lagging behind? After the Olympics, will the public want to use the cable car as an every-day mode of transport? Not only does it sound unrealistic to think that the public will choose to “take the cable car” to work, but the route (from one place in the middle of nowhere to another) seems extremely Olympics-centred. Will the cable car be purely used as a way to impress the masses of tourists organisers claim will visit London in 2012? (In fact most host cities experience a drop in tourism during the Olympics) Quoting Tfl analysts, it certainly seems so: “A cable car would bring excitement and iconic importance, which would generate interest in tourist visits.” Let’s go fly a kite.

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