PUBLIC SESSION

MINUTES OF ORAL EVIDENCE

taken before

HIGH SPEED RAIL COMMITTEE

On the

HIGH SPEED RAIL (LONDON – WEST MIDLANDS) BILL

Wednesday 10 September 2014 (Morning)

In Committee Room 5

PRESENT:

Mr Robert Syms (In the Chair)

Mr Henry Bellingham Sir Peter Bottomley

Ian Mearns Mr Michael Thornton

_____________

IN ATTENDANCE

Mr Timothy Mould QC, Lead Counsel, Department for Transport Mr Peter Village QC, 39 Essex Street

Witnesses:

Mr James Havery, Hansteen Holdings

Mr Simon Lloyd, DTZ Mr Mike Axon, Vectos

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IN PUBLIC SESSION

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INDEX

Subject Page

Chairman’s opening 3

Mr Mould’s remarks 4

Hansteen UK Industrial Property Ltd – Saltley Business Park

Mr Mould’s introduction 6

Mr Village’s summary 9

Mr Havery, examined by Mr Village 14

Mr Havery, cross-examined by Mr Mould 21

Mr Havery, re-examined by Mr Village 38

Mr Lloyd, examined by Mr Village 39

Mr Lloyd, cross-examined by Mr Mould 45

Mr Lloyd, re-examined by Mr Village 46

Mr Axon, examined by Mr Village 48

Mr Axon, cross-examined by Mr Mould 51

Mr Mould’s closing submissions 55

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(At 09.31)

1. CHAIR: Order, order. Good morning, everybody. I’m sorry there’s a smell of

solvent or paint. We have opened the windows; I think we’ve put up with it before, but

I hope it doesn’t disrupt our proceedings. We are going to hear today from Hansteen

and Mr Dean O’Reilly. Before we do, I’m going to give some thoughts about the

Committee’s view on what we’ve heard so far.

2. On the Curzon Street station area design and development, having listened to

petitioners, we think there is a case for more consultation with major landowners and

other stakeholders, particularly on access to and from Digbeth through and around the

Curzon Street station. We therefore invite HS2 to develop proposals in collaboration

with local interests.

3. In the case of CPL, as the parties appear close we think that HS2 should work

towards an improved offer on land return. We will hear then on that when the

Committee first sits in October.

4. On Washwood Heath and the alternative options for facilities there proposed by

Friends Life and Axa, the parties agreed to exchange further factual information. We

will await that exchange before offering any view on the merits of the petitioners’ case.

5. On Lionbrook, we encourage the parties to work together towards agreement

between now and when the Committee sits in October, to address the issues of access,

safety, and the needs of tenants, and the prospective uncertain value of the site. If there

is not an agreement at that point we will express a view on the merits of the parties’

cases.

6. We are not inviting further action on petitioners’ other requests heard to date. We

do invite HS2 and all petitioners to reach accommodation as much as possible.

7. Before we commence, I reiterate that short submissions will find more favour with

the Committee than lengthy, repetitious arguments and reading out of papers. Right,

we’ll kick off. We are first with Hansteen; Mr Mould.

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8. MR MOULD QC (DfT): Before we kick off in earnest, having heard, if I may say

so, gratefully, what you have said about Lionbrook, can I say Hansteen is essentially a

similar case; the owner of a business park for which some land will inevitably be taken

for the scheme, but where there is understandable concern on the part of the estate

owner, Hansteen, about how that will affect the continuing operation of the business

park both during the works and thereafter. And therefore the burden on us as the

promoters, to find ways as best we can, to give comfort that we will keep impacts during

construction and thereafter to as little as we’re able to do.

9. Now, with that point having been made, we put forward a series of assurances,

Friday and yesterday, a combination, dealing with matters such as maintaining access to

and within the estate, maintaining appropriate security, that kind of thing. Hansteen

have looked at those; I’m grateful for that, and overnight they’ve put forward a set of

assurances that they would like us to consider giving to them. This is designed to try

and avoid the need for the Committee to ask us to take the estate as a whole. You

understand that’s the position?

10. CHAIR: Yes.

11. MR MOULD QC (DfT): What we haven’t been able to do is to conclude the brief

discussions we were in the process of having outside about the assurances that Hansteen

themselves have formulated overnight. I think – Mr Village will tell you whether he

agrees with me – that if the Committee would find it in its way to rise for half an hour,

there is a good prospect that we can make real progress.

12. CHAIR: Okay.

13. MR MOULD QC (DfT): So if that is acceptable to you, that’s what I would ask

you to do.

14. CHAIR: May I ask, I understand the second petitioner is not going to delay. Is he

here?

15. MR MOULD QC (DfT): I don’t know whether he’s here. In terms of overall

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programme today, my view is that if we either know in half an hour that we won’t need

to hear Hansteen’s petition today, or we do have to hear it, I think you will get through

the business today.

16. CHAIR: I suggest we come back at 10.15.

17. MR MOULD QC (DfT): Right.

18. CHAIR: Okay.

19. MR MOULD QC (DfT): Thank you.

20. CHAIR: Order, order. Sorry, Mr Village, are you happy with that?

21. MR VILLAGE QC: Yes, I am, sir. Thank you. I should make it clear that I don’t

share Mr Mould’s view that it won’t be necessary for the Committee to hear the petition,

but it certainly will be possible to reduce the number of issues that the Committee will

have to consider, and some of the detail that otherwise we would have to put before you.

I should also say that the acceptance of these undertakings don’t in any way prejudice

our contention that there is a clear case of material detriment warranting the acquisition

of the estate as a whole. That position will remain, as the Committee will hear in due

course.

22. MR MOULD QC (DfT): That’s fine. The Committee will then know what it’s

got to decide.

23. CHAIR: Okay. Well, it would be a blessed relief if we were shorter rather than

longer. So we can all adjourn and go and have a coffee. Order, order.

Sitting suspended at 09.36

On resuming at 10.14—

24. CHAIR: Order, order. Who would like to report from the rugby scrum that’s

outside the door?

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25. MR MOULD QC (DfT): Shall I report, and then go straight into the brief opening

of the hearing?

26. CHAIR: Okay, thank you.

Hansteen UK Industrial Property Ltd – Saltley Business Park

27. MR MOULD QC (DfT): We’re very grateful to the Committee. It’s certainly

been a useful period of time. I think it’s fair to say that in the event that the Committee

takes the view that we shouldn’t take the whole of this business, but I’ll explain the

position in a minute, that we have made progress on agreeing a scheme of terms under

which we would seek to minimise the impact during construction on the continuing

operation of that park; we have made some significant progress on that. It’s not yet

complete, conversation is still going to go on, and I hope will continue during the course

of the morning and the day.

28. CHAIR: Okay, thank you. Mr Village.

29. MR VILLAGE QC: Sir, in a sea of deprivation, Saltley Business Park is an island

of unmitigated success. It employs over 770 people, excluding the Ghurkhas, who

manage the state of the art security.

30. MR BELLINGHAM: Can we get it on the screen?

31. MR MOULD QC (DfT): Shall I introduce you in the usual way?

32. MR VILLAGE QC: By all means.

33. MR MOULD QC (DfT): If we go to P270, just to give you the location, Saltley

Business Park, just to the north-east of Saltley Viaduct on the immediate run in to the

proposed Curzon Street Station. The blob marks the spot, as you know. If you turn to

P272, the red line effectively outlines the business park estate, which is owned by

Mr Village’s clients, Hansteen. The area marked with the green dash, the green hatched

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area is the full extent of the area over which the Bill would give the promoter powers of

compulsory acquisition. It includes a number of the existing units on the business park,

and it also includes the two access points to the business park, Pennine Way, which is at

the southern boundary of the business park—you should just be able to make that out—

which gives access directly onto Saltley Viaduct. And then the roadway which is shown

cross-hatched towards the northern end of the business park, that’s Dorset Road, which

gives access onto Arley Road. Pennine Way is the principal access to the business park;

Arley Road is the secondary access under current operations.

34. SIR PETER BOTTOMLEY: Where’s Pennine Way?

35. MR MOULD QC (DfT): If you can find–

36. SIR PETER BOTTOMLEY: And we’re just to the north-east of the TNT site that

we have seen.

37. MR MOULD QC (DfT): Yes, you are. The advantage to the petitioners of the

access onto Saltley Viaduct is it gives direct access to the primary road network, which

as you can see is just beyond the existing Birmingham to London line. You can see

there is a roundabout; that’s the one. So, as I understand it, that’s why that is the

principal access to the estate.

38. Saltley Business Park is fully occupied by a range of tenants operating businesses

in manufacturing, warehousing and distribution. The area over which we seek powers

of acquisition amounts to some 30% of the land area of the business park, or in terms of

number of units, it includes eight units of the business park. If we can go, please, to

P273, the units which will require to be demolished for the purposes of the construction

and operation of the railway are shown in the blue footprints. Those that are outside the

build limits are the grey. That really sets the position.

39. I ought just to say this though, because it helps me to understand where the

negotiations have been going. The position of the petitioners is that what you see on the

screen there, coupled with the fact that the build limits allow us to take the access roads,

means that the business park is effectively severely disabled for the construction period,

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which as you know, is going to last several years. Effectively they would be left with no

more than about four units that could continue operating. If that was the position we

were in and we weren’t able to offer anything to try and mitigate that, I wouldn’t be

here. It would be perfectly obvious in those circumstances the Bill should include a

requirement to take the whole. But we say the position is not anything like as stark as

that. I’m not going to show you them now, but we’ve got a sequence of construction

drawings that show you the main phases of construction on this site, and the upshot is

this. We are able to and have offered a series of assurances whereby we would maintain

continuity of access, vehicular and pedestrian, to the business park via one or other of

their access points throughout the works. We would maintain continuity of access

within the business park to the units that remain, subject only to needing to do some

utilities works. Just as you would expect on a public street, we may have to hoards off

some, but we will maintain accessibility to all units on the business park subject to that

caveat.

40. This is a business park where the petitioners have a particular concern about

security. As you will hear, they have a very highly developed regime for security, with

security kiosks at both accesses. They are concerned about that being compromised

during the works. We’re giving an assurance about working with them to ensure that

appropriate security is maintained.

41. Can we just go to P278, please? The key point the Committee needs to get about

Saltley Viaduct and the Pennine Way access, the main access, is that in order to do the

works that we need to do for Saltley Viaduct, we do have to close the Pennine Way

access. And we have to close it for six months; that is the estimate we have at the

moment. We also need to have traffic management measures, as you know, on Saltley

Viaduct for a longer period of two years in order to do works. But what we are saying

to the petitioners is we will make sure that the works to the Pennine Way access or done

within six months. So if you imagine, let’s say the works start on 1 January 2018, on 1

July 2018 that access point will be back in use and available for your tenants. That

access will be a new permanent access. That’s the current conceptual arrangement for

that access you see on the screen, but as you know, I’m afraid it’s a mantra you hear

from me again and again, it’s subject to refinement and detailed design.

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42. It leads me to my final point I wanted to say to you in opening; if we can turn on,

please, to P281. After we’ve done the construction works, which require us to take land

within the business park, we end up with a situation where we know that there will be a

significant quantity of land that will be surplus to the operational needs of the project.

That land is shown here on an indicative basis with the hatching. I can’t tell you now,

for obvious reasons, precisely what the area of land will comprise of, but that’s an

indication of where we think it’s likely to be at the moment. As you know, we operate

the Crichel Down Rules in relation to surplus land. Our judgment at the moment is that

there is a real prospect that we would be able to offer back an area of land, and we can

see that the obvious person interested in acquiring that land back, if it were so offered,

would be the then current owner of the estate, whether it be Hansteen or some other

person. Obviously they would need to buy it back at full market value, but you can see

the force of that point. What I should say is that kind of arrangement would obviously

depend upon the estate remaining in a single ownership. If it didn’t, then we’d have to

think again. I can’t put it any higher at the moment than a real prospect, but I thought

the Committee ought to know that because it may bear upon the issue, because the

principal issue the Committee is now going to be asked to hear–I think Mr Village will

tell me if I’ve got this wrong–is whether, having regard to what’s being suggested in

terms of trying to mitigate the impact on the operation of the business park during

construction, and to a degree during operation, whether the Bill should nevertheless

require the acquisition of the business park as a whole because of the impact of the

works and of the scheme on its continuing operation. Thank you.

43. CHAIR: Mr Village.

44. MR VILLAGE QC: If we just go back to slide P273, I just want to add a couple

of contextual points. Firstly, to note the secondary access of Arley Road is within what

is largely a residential area. So immediately to the east of Arley Road there’s a large

residential and deprived area. Arley Road is an entirely unsuitable road for heavy goods

vehicles. I’ll come back to that point later, and the significance. And just at the corner

of Arley Road and Ashton Church Road is a large mosque; particularly busy, of course,

on Fridays. Again the significance of that will become evidence in due course.

45. As I was saying, this business park is an unmitigated success, employing over 770

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people, real jobs, state of the art security, guarded by Ghurkhas, and on any basis those

jobs will be either lost or jeopardised by these proposals. That it’s a poorly conceived

scheme is self-evident from the drip-feeding approach that the promoter has indulged in,

in passing us on a daily basis scraps more information coupled with an undertaking here

and there, which appear to be written in the water. So this morning we have countered

with some proposals by way of counter-undertakings; we’ve hopefully beefed those up.

Those are going to be the subject of discussions, and I’ll just take you through those

undertakings so you get a flavour for the concerns. But they won’t, as I will explain,

deal with the fundamental problem that the proposal will bring to my clients and the

occupiers.

46. The manner in which the promoters have gone about this is significantly going to

increase the compensation because if they were able to acquire it now, or at least within

a year of the Royal Assent, we think that the compensation would be materially reduced.

I will explain in due course why we think it is sensible in the public interest that the

acquisition is now rather than later. As I noted in our skeleton, the key feature of Saltley

Business Park is the security, coupled with its highly accessible location. The securities

come at great capital cost to the petitioners, spending £1.8 million since 2010. And here

is the rub, because the ongoing running costs of the security are borne by the tenants, so

a significantly reduced estate will adversely impact on being able viably to provide the

same level of security for the residual estate. It’s likely, as you will hear in due course,

that this factor alone will fatally undermine the ability of the estate to retain and attract

tenants of appropriate quality.

47. The Committee won’t need any persuading that once tenants are lost or not

attracted, then a spiral of decline sets in. Investment by the owner inevitably reduces

because funds cannot be justified for an estate where units lie empty, leading to fewer

tenants and so on. That is the spiral, and that spiral of decline can set in overnight.

Where the critical mass of the estate is undermined, as here, it will be inevitable.

48. Fundamentally – and this is the second point so far as the effect of these proposals

are concerned –fundamental to the ability of the estate to attract high quality tenants is

their knowledge that they have 24/7 access, unhindered and unfettered, and from a

convenient approach. What you will hear in due course from the market and highways

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evidence that the petitioner calls, is that the closure of Saltley Viaduct for two years,

coupled with the closure of the main access, which is going to be for apparently six

months, will mean that tenants will not be attracted to this site. There is some

22 million square feet of floor space available in Birmingham. Why would they want to

come to a site where you have to access it through the back streets of a residential

neighbourhood with congestion, rather than in a convenient way from the main highway

network?

49. The alternative access via Arley Road is a hopelessly inadequate secondary

access. It’s got a very poor accident record; I think five personal injury accidents in the

last five years. You’ll hear that with a doubling of the HGV movements that will be

provided will lead to an inevitable significant accident risk. Insofar as Saltley Viaduct

main access has to close, we say it should be for the minimum period necessary. The

promoter says four to six months. We prefer four months, and that is what we seek by

way of an undertaking. But in any event, the consequences will be profound and

possibly unforeseeable.

50. I’d like to take you now to some of the detail, and if you could get slide A135 up

please – A135? This is one of the petitioner’s slides, and I think it shows more

accurately what the real effect is. I just want to draw your attention to three points on it.

Firstly, that you’ll not an L Shape is being acquired on Pennine Way, and Dorset Road.

That led to me client’s justifiable concern that that, effectively, was going to mean that

there was not going to be any through access, or access through the estate, which would

prevent a number of units being accessed at all. Well, that’s the subject of some of the

undertakings that are being provided. But by no means does this deal with the concerns.

First of all, one unit, which is the unit closest to the access Pennine Way on – it’s

number…

51. MR MOULD QC (DfT): Which one is it?

52. MR VILLAGE QC: Unit One.

53. MR MOULD QC (DfT): Unit One, is it? Right.

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54. MR VILLAGE QC: Yeah Unit One, Dorset Road. That’s it there. Thank you.

Unbelievably, what the promoter has done is draw a line around the building itself, but

taking the yard immediately to the west, but leaving us with the building itself – unit

one. The Committee will need, I hope, no persuading that that is an absurd approach,

and it is the subject of one of the undertakings that we’re seeking, that they actually take

the building as well. That would have the entirely beneficial mitigating effect of also

providing some car parking. The car parking, which is in the corner, effectively the

south west corner of the site – where the arrow is now – that’s the communal car

parking. That is being taken, and by taking unit one, Dorset Road, that will provide at

least some additional communal car parking as well. At the very least, my clients ask

that the entire estate is acquired within 12 months of Royal Assent. This is logical and

fair, because it’s the promoter who knows how long the scheme will take to construct,

when any given parcel of land will be acquired, and when that land will be available for

lease or resale.

55. What is unfair is seeking to lay off the risk and cost of uncertainty, which I will

bet a pound to a penny HS2 through Colin Smith, one of the witnesses for it on

compensation, within due course of seek to avoid in terms of liability, responsibility for

in the land’s chamber. I should add my clients would be prepared, as experienced

property managers, to manage the site on behalf of HS2, but they are not prepared to

take the financial risk and responsibility of ownership, which the acquisition will

inevitably pass to them.

56. MR MOULD QC (DfT): Will you require a fee?

57. MR VILLAGE QC: Assuming that HS2 is not prepared to offer up such an

undertaking, then we suggest the following undertaking. I wonder if we could just have

on the screen please - A138? And I’m just going to take the Committee, if I may,

through the undertakings that we’ve been discussing this morning. Now, these will be

the subject of change, and they have been the subject of discussion, and I’m just going

to give you a flavour of the points that we’re asking for. I’m not going to give you a

legal textbook definition of the various points that Mr Mould will be seeking. He can

speak for himself in due course.

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58. So, first of all, the promoters to provide, in detail, a timetable showing the dates

and timings of road closures and/or access restrictions to Hansteen three months in

advance of entering the site. I think that is generally agreed subject to a further

provision saying that they can notify us of any changes as soon as reasonably

practicable.

59. Two, the site’s main access of Saltley Viaduct will be closed to business park

traffic for a maximum, or, we say, four months. Mr Mould says six months. They say

in their evidence – in a letter to us the other day – it will be four to six months. If that’s

a reasonable timescale, make it four. I should just make this observation: it is, in my

experience, for any engineering project, there will exist now a – what’s called Gant

Chart, which identifies the works that are required, and the time scale for those works.

That chart will exist – I don’t know whether the Committee’s been shown it, but what

we would be interested to see is what in fact HS2, in their Gant Chart, actually identifies

as the appropriate timescales.

60. Three, Dorset Road, Pennine Way and Cumbria Way will remain permanently

open for business park traffic throughout the construction period, and HS2 say, ‘Well,

that should be subject to access for the purposes of diversion of utilities and temporary

works’, which, being reasonable people, we would accept.

61. Four, the promoters to ensure vehicle is including HGV and pedestrian access,

sufficient car parking, and HGV turning space at all times during construction to each of

the buildings retained by Hansteen. I’m going to add the words ‘sufficient and

appropriate car parking’ because obviously it’s got to be car parking that works.

62. Five, construction traffic will be limited solely to the routes indicated by the

dotted green lines. Those are on plans which are on the screens, but they had been

provided already, and I don’t think that’s contentious.

63. Six, construction traffic will not park, or stop on any of the business park estate

whilst passing through the business park during the construction period. There seems to

be a small quibble about the word ‘stop’, but we’ll see whether we can get round that.

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64. Seven – and this is, as far as we’re concerned, absolutely essential – I’ve already

mentioned it. The promoter will require unit one, Dorset Road in its entirety, demolish

it when it demolishes the other acquired units and lease the space back to Hansteen for

use as a car park and HGV turning point for business park traffic.

65. Eight, the promoter will replace the security gate house with barrier control, which

is proposes to demolish with the security gate house, in accordance with the

specification and as a location agreed with Hansteen.

66. Nine, details of HS2 construction vehicles, including vehicle registration numbers

will be provided to Hansteen in advance of construction traffic entering the business

park.

67. Those last two undertakings, I think, are accepted. So, that then leaves the issue,

which is whether the spiral of decline from this business park can be averted, or

avoided. We say it can’t, and my evidence will demonstrate that.

68. CHAIR: Thank you, and the car parking is within the security of the estate?

69. MR VILLAGE QC: It is, yes.

70. CHAIR: Do you want to call your…?

71. MR VILLAGE QC: I will call my first witness as being sworn: Mr Havery.

Mr Havery, you are James Mark Havery. You joined Hansteen Holdings, a pan

European industrial property investor in 2009 to join the entry into the UK market.

You’re one of two directors who have day to day responsibilities from the UK division

of Hansteen, which you managed from a platform of seven regional offices. Is that

right?

72. MR HAVERY: Yes.

73. MR VILLAGE QC: And Hansteen has a UK property portfolio, which values at

£850 million. I’ve just got one or two further questions arising from your evidence, if I

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may? The total extends to almost 44 acres. Is that right?

74. MR HAVERY: Yes

75. MR VILLAGE QC: And just over a million square feet of manufacturing

warehousing and distribution floor space?

76. MR HAVERY: Yes

77. MR VILLAGE QC: In terms of accessibility to the national centre, Birmingham

centre, city centre and national motorway network, how accessible is it, and how

important is that?

78. MR HAVERY: It’s crucial. It’s very accessible. It’s two miles from the city

centre and two miles from spaghetti junction, and as we were acquiring it and doing all

our due diligence in 2010, that was one of the two important things to the tenants and to

us, match that with skill. That was the appealing feature

79. MR VILLAGE QC: And how well served is it by way of rail?

80. MR HAVERY: Well you have Birmingham International Railway Station not far

away. You have Birmingham New Street two miles away, and you have the local

railway station, Duddeston Mill, which is actually walking distance from here.

81. MR VILLAGE QC: I think there are 22 units on the estate occupied by a total of

15 tenants. One of those tenants is annexed. I wonder if we could just get on the screen

– in fact it’s on there now – A1351? Could you identify for the Committee which are

the units hidden by Anixter, and what do Anixter do?

82. MR HAVERY: So, Anixter are an importer and distributer of copper cable. At

any one time, they can have £60 million pounds worth of inventory. They occupy Unit

R Dorset Road, which is the – yeah – that one, and then they straddle Pennine Way into

the building, and then the next building there, which is yellow, and the one next to it.

And they have recently taken – or are in the process of taking Unit Five Cumbria Way,

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which is the building up on the right hand corner.

83. MR VILLAGE QC: How important are they as a tenant on this estate?

84. MR HAVERY: Crucial. They have been there for a long, long time. As we were

acquiring the property in 2010, as we do when we buy property, we spoke to them to

understand why a tenant is there, to tell the Committee that they were one of the few

tenants at the time. There was a 40% void when we bought the property. They’re there

because it’s strategically located, and while some of the building are less pretty than

others, it’s entirely fit for purpose for them. And they have a work force locally. MR

VILLAGE QC: In the promoter’s response document, it says at page 14 – I’m just

going to read out paragraph eight – the promoter’s in direct discussion with Anixter

about the acquisition of one of their units from Saltley Business Park, and how they can

mitigate their loss. Anixter hasn’t felt the need to petition the house regarding the bill,

and the promoter doesn’t accept that they affect on Anixter’s business will be as severe

as made our by the petitioners. The promoter doesn’t therefore accept that the

acquisition of a single unit will undermine the viability of Anixter’s operation, or

necessarily cause them to leave the remainder of the unit on Saltley Business Park.

Have you had discussions with the head of property of –

85. MR HAVERY: A colleague of mine, who runs the estate day to day spoke to our

Head of Property and he’s not aware. We would assume that any discussions on HS2

would be on his radar, and he wasn’t aware of that.

86. MR VILLAGE QC: He wasn’t aware of any discussion with HS2 about the

acquisition of one theirs. As a matter of interest anyway, it is HS2 seeking to enter into

discussions with you about the acquisition of any of the units as freeholder, which you

might actually think would be the relevant person to discuss these matters.

87. MR HAVERY: Not currently…

88. MR VILLAGE QC: So that’s the position so far as Anixter is concerned. You

described the estate and Committee’s already read what you’ve said about the

substantial £1.8 million pounds of investment to refurbish buildings and upgrade

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security on the estate since you acquired it in 2010. As to the effect of this proposal, I

just want to identify what your concerns are. I’m just going to start with the question of

access, because, as you know, can we go back please to slide P274, please? Thank you.

The principal access is off Saltley Viaduct and through a main security gate. There is a

secondary access of Arley Road. Would you explain to the Committee how important

the primary access of Saltley Viaduct is to the estate please?

89. MR HAVERY: It’s crucial to have two accesses because of the scale of the whole

site, and the operations, the type and the nature of the operations that are going on there

with just-in-time deliveries that a handful of tenants have – we have just-in-time

contracts they have with Jaguar Land Rover. Pennine Way is by far the principal

access, it’s the one that leads straight out on to the Arley Park Road, and really Arley

Road acts more as a pressure release valve really. The main gate house is here. There’s

access maintained there 24/7, round the clock, 24 hours. It’s slightly reduced here at

night time on Arley Road. So, it is one of two accesses, but it is by far the principal

access.

90. MR VILLAGE QC: What’s proposed is the closure of Saltley Viaduct for a two

year period, and to understand the effect of that, we need to look at another slide. I

think, probably, the aerial photograph is as good as any, which is P272, please. P272?

So, how will access be achieved, if not by Saltley Viaduct?

91. MR HAVERY: Well logically, for traffic coming from the multi-way network…

92. MR VILLAGE QC: If you’re coming from Spaghetti Junction, it is off the page

to the north west.

93. MR HAVERY: Spaghetti is two miles to the north west. You can just see at the

top of the page, there’s a roundabout in grey. That’s it. That’s top of the Heartlands

Parkway. It will come into Aston Church Road, and the first option it will take will be

to come through and along Arley Road.

94. MR VILLAGE QC: So, that is the short route. Along Arley Road, from the

North, and obviously, we’re going to have evidence later as to the appropriateness of

18

that. If the promoter says, ‘Well actually the traffic would use Washwood Heath Road’.

95. MR HAVERY: Yes, and that’s what the promoter says, but in practice, I’m not

sure that’s what would happen.

96. MR VILLAGE QC: But if that was the position, how attractive a ruse is that?

97. MR HAVERY: Well, it’s a long secure route along right the way round through

residential itself, albeit it’s a wider road than Arley Road. But it’s a long way round to

get into an industrial estate, which is compromised on the way in, and then once you

even get on to the estate, you are further compromised.

98. MR VILLAGE QC: Let’s just assume, fast forward, say, four years, and Saltley

Viaduct is closed for a period of two years, you have lost Anixter, because they require

to have all of their operations in one location. One of their principal buildings has gone.

You’re looking for new tenants. How attractive is this as a proposition. I’m going to

ask this of the commercial agents and lawyers in a minute, but how attractive is this

access route as a proposition for potential tenants?

99. MR HAVERY: I think it’s clearly unattractive, and in what we talked about

security, I’m sure that one of the key features of the site is its accessibility, and that,

together with the security that we’ve created here is what you see now as a very, very

successful industrial estate, fully let. It can’t be more successful, and a marked

difference from what we inherited. So, turning access into a very compromised

situation just, effectively, takes away one of its strong points, and it would just be

another industrial estate in Birmingham.

100. MR VILLAGE QC: Can we just turn to the tenants themselves? You’ve got a

plan which is A135(4), which is a table of all the tenants, and I think, in yellow, those

tenants whose land will be acquired in any event. Very briefly, what’s your overall

concern about the ability to retain these tenants – the other remaining tenants in the

event that the seven other tenants go?

101. MR HAVERY: I think that tenants need, particularly with the nature of a lot of

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these tenants, unrestricted access. They need to feel that their business is set up in a

very, very safe and secure environment. We’ve created that. That’s not what they had

before, and they need to be able to get in and out and run their business properly. All of

that is compromised by the scheme, and so I think that where they are offered

opportunities – tenants are by their very nature very footloose, and that’s why we as

landlords have to work to retain them. We invest in buildings. The management style

of our own business is we have lots of proximity. We put regional teams in close to

properties. So, if we lose the USPs of security and have very compromised access,

we’re going to be competing with alternative buildings, who don’t have the issues, and

so as an experienced person in industrial property, those tenants will leave.

102. MR VILLAGE QC: Just on the question of security, you’ve explained the state of

the art nature of the security, the Gurkhas who guard this. It comes at an annual cost of

a service charge to the existing tenants. Is that right?

103. MR HAVERY: That’s right, yeah.

104. MR VILLAGE QC: What will happen when, inevitably, the seven tenants are

lost? Will it be possible to maintain that level of security through the loss of those

tenants?

105. MR HAVERY: Well, there’s a bigger cost – a fixed cost over a smaller tenant

base, so the service charge will necessarily have to go up, which will make the estate

less attractive. And in actual fact when we did Anixter’s lease renewals, security was so

important to them, whereas they’d had a night and day on the previous landlord, where

theft was commonplace, and to what we said, they wrote into the lease, ‘We are

obligated to keep security at that level’.

106. MR VILLAGE QC: And the final matter I want to ask you about is, if you can go

back to the plan which you produced A135(1), please? This is the issue about unit one,

Dorset Road, where we’re being left with the building, but they’re taking the yards and

the service base. How’s that going to work and what’s the future for that building?

107. MR HAVERY: Well, it’s not going to work. To let an 80,000 square foot

building, you need, ordinarily, to provide a proper yard, and that’s why we got that unit

20

let in the first place. It was the one acre yard that was the attraction. You take the yard

away, it then is severely compromised, and then we’re being – it’s been suggested to us

by the promoter that we can access it from Pennine Way. Well, Pennine Way itself is

the main spinal through the estate. Anixter Park trailers on there as is their right. I-

Force who own that big building at the bottom, who do internet returns, as you’ll see in

our papers. They do internet returns for all sorts of people, and they have a steady flow

of HGVs coming in there, and they use Pennine Way as a Heath Road holding pattern.

As someone who’s spent a lot of time on that industrial estate and knows it very well, I

can’t see how unit one, Dorset Road, accessed from Pennine Way, and without the yard,

has any future at all.

108. MR VILLAGE QC: The Committee will have identified from your section eight,

your principal concerns, and the implications of the proposals, and I will obviously take

all that evidence as read, Mr Havery. It’s not important that I don’t ask you questions

about it, but if one was to simply encapsulate your concerns, assuming that internal

access can be, somehow, made to work, what would you say to the Committee about the

overall effect of these proposals on the estate?

109. MR HAVERY: I think that they’re as bad as they can be. I’m not sure we can

make those arrangements internally work perfectly, but in that hypothetical world,

everything that’s gone on outside the estate will – just change its whole image and its

position. Tenants will leave. That experience tells me tenants will leave. To re-let

those units, we’ll lose enquiries. We’ll lose viewings before we’ve even got them to the

estate.

110. MR VILLAGE QC: Has that already happened as a matter of fact?

111. MR HAVERY: Yes.

112. MR VILLAGE QC: And there’s evidence, I think, from Mr Lloyd about that.

Thank you very much indeed.

113. CHAIR: Can I ask, the rent’s about £3 million. Is that right?

21

114. MR HAVERY: Yes.

115. CHAIR: And the security charge is £1.8 million?

116. MR HAVERY: No, so the initial capital investment was £850,000.

117. CHAIR: What’s the recharge?

118. MR HAVERY: The whole service charge is about 50p a foot – just over 50p a

foot.

119. CHAIR: So, half a million pound then. So, what impact does the service charge

have on the remainder of the estate, on the rent and service charge?

120. MR HAVERY: At the moment you’ve got around half a million pounds a year,

because it’s divided across a million square feet in round terms. Of that half a million

pound, a lot of that will be fixed – security 24/7, Gurkhas on site. You’re not going to

water that down.

121. CHAIR: So, either you as a landlord carry it, or your surviving tenants carry it for

everybody?

122. MR HAVERY: Whilst the surviving tenants stay in occupation, before they

inevitably leave, yeah.

123. CHAIR: Mr Mould?

124. MR MOULD QC (DfT): Thank you. I’ve got one or two questions. Mr Havery,

while we’ve got that point in mind, might there not be at least the opportunity to look at

whether you could reduce the overall cost of security following the loss of the tenants

who will inevitably have to go – the red properties on the screen in front of us – might

there not be the opportunity to consider at least whether you can reduce the cost of

security overall, that you either have to bypass your tenants because you’re securing a

smaller estate, because you might be able to use less personal, for example? It’s at least

22

an opportunity?

125. MR HAVERY: It would take the Gurkhas less time to walk the perimeter of the

estate on a regular basis, yes. I’m not sure would make it cost less.

126. MR MOULD QC (DfT): Can we agree that there’s at least something that you

could look at?

127. MR HAVERY: You would naturally look at that, yeah.

128. MR MOULD QC (DfT): So, it’s not completely and utterly fixed that it could be

that cost, is it?

129. MR HAVERY: No. Well, it’s not fixed in the sense that we have a duty to our

tenants that team is organised.

130. MR MOULD QC (DfT): Thank you. Quickly, I think your concerns about the

impact of the scheme boil down to three basic headings: location; access and circulation

and security. Location. The point you make – the reference for those who want to look

at it is A134(7) – the point you make about location about the location of the site in

relation to the motorway network, and in relation to the railway network. Now, it’s one

point that you do take about getting to and from the motorway network, which is our

tenant’s preference is to get to and from the motorway, principally, by Saltley Viaduct,

yeah? And we know that there will be a period during the works when that is going to

be lost to them. But subject to that point, HS2 does not alter the locational advantages

of the site as a business park in relation to the surrounding motorway network, does it?

131. MR HAVERY: It stays in the same place.

132. MR MOULD QC (DfT): Secondly, in terms of rail, the effect of HS2 in relation

to the business park permanently is to improve its attractions in relation to railways

because you add on to the existing railway network a new high speed railway line

running from London to Birmingham and beyond, don’t you?

23

133. MR HAVERY: Is that a relevant…

134. MR MOULD QC (DfT): I don’t know. You tell me. Do you think, in terms of

location, your tenants might find it helpful to have a new dedicated high speed railway

line, which enables clients and so forth to come to the site from London to Birmingham

in 48 minutes?

135. MR HAVERY: You’d have to ask the tenants that, but I think what’s much more

acute in their mind, is their ability to get to Jaguar Land Rover, for instance, very, very

quickly, and not face £14,000 a minute penalty charges for getting their deliveries late

on their Just-in-time contracts.

136. MR MOULD QC (DfT): I’m thinking about the park as a going concern, as an

attractive commercial operation. Once the construction of the railway has taken place,

and once the railway’s come into operation. That’s what I’m thinking about. It seems

to me that the location of the business park at that stage, in relation to a rail network that

has added on to it, that that can only be to the advantage.

137. MR HAVERY: Yes. If you’re asking me whether this site, as any other site in

Birmingham is improved by HS2, then yeah. But I would like to finish. By that stage,

you will talking about the site. You won’t be talking about the business part with those

tenants there, because the whole site – all of those properties – tenants will have left –

the site will have been sterilised.

138. MR MOULD QC (DfT): That is your judgement?

139. MR HAVERY: That is my view, yeah.

140. MR MOULD QC (DfT): Because a number of the tenants in the units that we

don’t acquire have got leases that, in contractual terms, take them well into the

construction period. Anixter for example, they have leases of units…

141. MR HAVERY: 2011?

24

142. MR MOULD QC (DfT): To the end of 2018. And they’re protected under the

Landlord and Tenant Act, aren’t they? So, in principle, they have an expectation of

being able to remain.

143. MR HAVERY: Yeah, but not an obligation to.

144. MR MOULD QC (DfT): No, I know, but you’re not asking the Committee to

conclude, as a matter of certainty, are you, that the effect of the construction of HS2 is

that this business park will become vacant by, shall we say, the end of 2017? You’re

not asking the Committee to draw that conclusion, are you? You’re saying that there’s a

risk, a real risk, that tenants will feel that when their lease term comes to an end, all

things being considered, their future lies elsewhere, notwithstanding the locational

advantages of this business park. That’s the case you’re making, isn’t it?

145. MR HAVERY: I think that’s what will happen. That’s my view. The tenants

will leave, yeah.

146. MR MOULD QC (DfT): Can we turn just briefly to access and circulation space,

and can we put up A138 please? Now these are the undertakings that you asked us to

think about today. Just look at two, yeah. Now, as explained, the point that you made

about that is that we need to retain a maximum of six months for the closure of the

principal access. That is to the say, the Pennine Way access on to Saltley Viaduct. We

know that’s the principal issue between us on that undertaking, isn’t it? Yeah? So, that

means we’re in a position where the promoter is saying to you, ‘We will ensure, subject

to some completely unforeseen event, that the period of closure of the Pennine Way

access to your tenants, who remain on the estate, will be no longer than a period of six

months’. That’s what we’re saying.

147. MR HAVERY: I understand, yes.

148. MR MOULD QC (DfT): And you also know, where indicated, that the period of

total or partial closure of Saltley Viaduct itself to traffic will be no more than two years.

Can we just turn to the P276? The need for the project to interfere with traffic on

Saltley Viaduct is in two places. I think you’ve seen that from the images, haven’t you?

25

And this is the first phase of closure. Phase two of the overall construction. But this is

the first of two phases of interference with Saltley Viaduct. Now, this would effectively

mean the Pennine Way access would remain open to your tenants, but they’d only be

able to get to it from the south. Do you see that? You wouldn’t be able to get access

from the north. That period of time would last for one year, okay?

149. MR HAVERY: Why one year?

150. SIR PETER BOTTOMLEY: Two years closure of Saltley Viaduct.

151. MR MOULD QC (DfT): Partial or total closure, but it’s in two phases and I’m

just explaining the two phases now.

152. MR VILLAGE QC: I’m saying we’ve never had any explanation as to how long.

We were just delivered with these plans last Friday, Mr Chairman. We’ve never had

any explanation as how long the phases would last, and this is the first time we’re

hearing this.

153. SIR PETER BOTTOMLEY: Would it help if counsel if you told us what you

think’s going to happen?

154. MR MOULD QC (DfT): The position is, we expect the closure of Saltley Viaduct

for the scheme works to be in two phases. I’m going to show you two plans. This one

and the next one to show you those two phases. The first phase involves, for the

purpose of this estate, the closure of Saltley Viaduct to the north of Pennine Way. That

is expected to be of the order of a year. If we turn to the next plan, the second phase of

the overall closure of Saltley Viaduct would be…

155. SIR PETER BOTTOMLEY: That’s the one called phase three.

156. MR MOULD QC (DfT): That’s phase three. That would be for period of, we

think, in the order of six months, but because, at the moment, we’re in an early stage in

scheme and construction design, we need to reserve to ourselves the flexibility to ensure

that we haven’t underestimated once we get further down again. We’re saying that the

26

overall duration, we need to allow two year. So, we expect that we can keep it within 18

months, but we need to allow an extra six months so that we don’t deny ourselves the

need for a rather longer period of closer on detailed design. Now, the upshot…

157. SIR PETER BOTTOMLEY: In our mind, we’ve got two years to 18 months

possibly, rather than two years to one year.

158. MR MOULD QC (DfT): Two years, possibly reducing to 18 months, not one

year. But so far as your tenants are concerned, if following the detailed design, we’re at

where I put you – that’s to say we managed to keep it to 18 months – it would mean that

for a period of a year, your tenants have to go right in and left out of Pennine Way, and

for a period of six months, they have to go in and out of Dorset Road onto Arley Road.

Do you see that?

159. MR MOULD QC (DfT): Right in and left out of Pennine Way, and for a period of

six months, they have to go in and out of Dorset Road onto Arley Road, do you see that?

160. MR HAVERY: Yeah, the word I remember was ‘if’, but yes.

161. MR MOULD QC (DfT): Right. Now, Dorset Road, the Dorset Road access, I

take your point, that’s a secondary access for you, for your tenants at the moment, but

it’s not an access which is subject to any planning restriction as to its use, is it?

162. MR HAVERY: No, but the road, and I’m sure Mr Axon will tell you, is there’s

already traffic calming measures on that road.

163. MR MOULD QC (DfT): My point, simple question, not subject to any planning

restriction as to its use, right? That’s agreed, isn’t it?

164. MR HAVERY: That’s agreed, yes.

165. MR MOULD QC (DfT): And it’s not subject to any restriction on use imposed on

the part of the Highway Authority, is it? It’s a free, all vehicles, all movements access

which is available to your tenants on the estate?

27

166. MR HAVERY: Yes in the context of a larger estate that has a principal access up

there. I wonder if you’d get planning for that now, if that was the one access.

167. MR MOULD QC (DfT): Yes but you don’t to apply for apply for planning…

168. MR HAVERY: No, I know but what I’m suggesting –

169. MR MOULD QC (DfT): Well, what’s the point of speculating about whether

you’d get it? You don’t need to apply for it, do you? You can use that access now, as

your principal access if, for some reason, you decided that that was what you wanted to

do. Let’s say, for example, you found it necessary to carry out some significant

improvement works to the Pennine Way access, which are going to take three months.

You would be within your right, in planning, property and highway law, to direct your

tenants, that for that three month period, they should gain access to and from the estate

via Dorset Road and Arley Road, wouldn’t it?

170. MR HAVERY: Yes.

171. MR MOULD QC (DfT): And we’re effectively saying, we would like you to do

that please, for a period of six months, whilst we close off Saltley Viaduct – the Pennine

Way access onto Saltley Viaduct on the phase that we see on this plan?

172. MR HAVERY: It would be within our rights, as the landlord and we’re governed

by law ourselves, and service charge code and all sorts of things like that, it would be

within our right, but it would be suicide for us to do that if there wasn’t a knock on

effect, a positive effect; for instance, big expensive security enhancement –

173. MR MOULD QC (DfT): You might have to spend some more money on

security?

174. MR HAVERY: No, no, no. My point is, our tenants may be prepared to have a

short period of sufferance, if, at the end of it, they’re getting something for the common

good, for example going from night to day, when we’ve spent £800,000 on security.

28

175. MR MOULD QC (DfT): So just to be clear on that, your tenants, you think,

might be prepared to tolerate some period of disruption to access arrangements. They’re

going to want to have access, obviously, but they’re prepared to accept an inferior

access for a limited period, you think, provided they get a benefit at the end of it?

176. MR HAVERY: I think that in the context of the park by itself where you’re

introducing the idea to the tenant, this is why we need a short period of time to do some

work, because at the end of it, you’ve got something really good…

177. MR MOULD QC (DfT): Okay, well what we’re asking them to do is to accept a

short period when Pennine Way won’t be available to access for six months, and at the

end of that period of time, they’ll get a restored Pennine Way access, which will be

available to them, on a business park which enjoys a location which is served, not only

by the existing rail and transport network, but also by HS2. That sounds like the sort of

thing you’re saying you think they’d be –

178. MR HAVERY: I’m not presenting myself properly then, because I don’t think six

months is short term, I think six months is a long time.

179. MR MOULD QC (DfT): And we’ve said that we will maintain access to and

from the estate, via Dorset Road for all vehicles and for all pedestrians, and we will

maintain access within the estate, subject to the need to carry out some short term

utilities work throughout the whole period of the construction works for HS2, haven’t

we, we’ve said that?

180. MR HAVERY: You have, yes.

181. MR MOULD QC (DfT): Okay, thank you. Well, all I wanted was for the

Committee to understand the position, that’s fine. Can we then –

182. MR MEARNS: Mr Mould, can I ask you one question – you’ve gone into this

interchange where you are setting out the case so that the petitioners can understand

what the proposal is, but I suppose there’s one thing that strikes me about what you’re

29

now putting into the mix, by suggesting what the traffic management would be is, Arley

Road is a residential area and that has been pointed out by the petitioner. Do the

residents of Arley Road, and the smaller streets which come off it, are they aware of

HS2’s traffic management proposals for access to the Hansteen estate?

183. MR MOULD QC (DfT): Well, there’s no reason why they shouldn’t be because

we’ve set these out in detail in the environmental statement, and they are dealt with in

more detail in the traffic assessment, so the information is available, it’s been put in the

public domain, it’s been there since last November when this bill was presented to the

House, and Birmingham City Council, of course, as the local authority, have been

actively and interested in ensuring that we are doing all that we can to minimise impact,

not only on property owners, but also on residents and so forth, so the answer is, I can’t

tell you yes, there have been, but the opportunity has been there for them to be made

aware of that.

184. And we’ve also had community fora, as you know, as part of the development of

the scheme, there’s been an active community forum operating in Birmingham during

the period of, what was it, two years? Before the bill was lodged, and I can’t tell you

now, that this issue was something that was raised at the community forum; if you’d like

me to find out from the minutes whether it was, I’d be very happy to take that away, but

certainly generally, I can tell that up and down the route, the issue of traffic impacts has

been an issue that was at the forefront of matters that were considered, explained and

debated at those community fora, which, as their name implied, were attended actively

by members of the local community.

185. MR THORNTON: Mr Mould, can I just ask a follow up to that? It’s an

interesting question. As a motorist, I’ve been involved in local authorities before I

became an MP, it’s one of the things that anything like this with local residents would

usually do, if there was any issue at all, is usually restrict the times for which HGVs

could go to and from the site, and that would usually be something, in my experience,

that would be probably something like they could start at seven, and then have to finish

at eight or nine o’clock at night. Now my understanding from Mr Havery is that one of

the most important things for some of these tenants is 24 hour access. Now, has there

been any indication, has anyone asked the local authority, the City Council, if Arley

30

Road was going to be used as a main conduit for the site, whether they would impose

these restrictions, because if anyone hasn’t asked that, I think that’s an absolutely vital

question to be asked.

186. MR MOULD QC (DfT): I’m not aware that anyone has asked that, if you’d like

me to find out, that I will do so, but I think it’s important to bear in mind two points of

context here; I’m not going to take these to Mr Havery, because they’re really for the

traffic witness, but as you’ve raised the question, I ought to deal with it now. First of

all, the residential areas to the south of Arley Road that you see on plan, these are areas

where the main frontages of the houses in question are not fronting onto Arley Road,

these are streets which you’ll know the arrangement…

187. MR MEARNS: A number of small cul-de-sacs.

188. MR MOULD QC (DfT): Yes, exactly, it’s a familiar arrangement around many

parts of the Midlands and the north of England. The second point is this, we’re talking

about a relatively small increase in traffic flows, okay? We’re talking about flows

which are of the order of a few percentage points.

189. MR VILLAGE QC: 200 to 400.

190. MR MOULD QC (DfT): Over the existing flows on Arley Road, and so the…

191. MR THORNTON: Excuse me, can I ask a clarification question on that, when

you’re talking about increased traffic, are you talking about increased total traffic or

increased HGV traffic?

192. MR MOULD QC (DfT): Total traffic.

193. MR THORNTON: Because an HGV increase, I’d just like to say…

194. MR MOULD QC (DfT): I take your point.

195.

196. MR THORNTON: So quite obviously one more HGV is considerably more

31

impact than 20 ordinary cars.

197. MR VILLAGE QC: The HGVs, these go from 200 to 400.

198. MR MOULD QC (DfT): I take your point. Bear in mind, this is for a period of

six months we’re talking about here, and I take your point that HGVs are an important

component of that, but the sharp point the Committee is being asked to consider here is

whether the Secretary of State should take over ownership of an operational business

park. You’re not being asked to say the business park should be required to close during

that six month period because of traffic impacts on Arley Road, those traffic impacts

will remain, whether or not the Secretary of State owns the estate…

199. MR THORNTON: Excuse me, Mr Mould, but I disagree with that, they wouldn’t

remain if the leaseholders left the park.

200. MR MOULD QC (DfT): I know.

201. MR THORNTON: And if I was a leaseholder, and I needed access 24 hours a

day, and suddenly I couldn’t, then I would leave the park.

202. MR MOULD QC (DfT): I would be extremely surprised, frankly, if Birmingham

City Council sought to impose any sort of restriction on – Arley Road is a significant

public highway. We’re not talking about a resident distributor road, this is a significant

public highway. The other thing that you ought to know, as we’re on this, is that the

scheme provides for improvements to the junction of Arley Road and Aston Church

Road. If you look at the plan in front of you, within the scheduled works of the build

are some improvements to that road. They flow from the need to get Aston Church

Road over the existing railway line and over HS2, but they will result in improvement in

the operation of that junction. So, there are a number of factors here that need to be

considered. But when it comes down to it, what we are talking about is an existing

secondary access, without restriction, serving this estate, being used for a period of six

months, as the principal access to serve this estate, and I ask you Mr Havery,

presumably, it is not uncommon for heavy goods vehicles, either serving or visiting

units on the estate, to use the Dorset Road, Arley Road access on a day to day basis at

32

the present time, it is?

203. MR HAVERY: No, well we’re not suggesting for a moment that it’s going from

no HGVs to lots of HGVs.

204. MR MOULD QC (DfT): No, quite. So let’s get the context for this. Let’s get a

flavour.

205. MR HAVERY: Your following all of the movements out of the principal access.

206. MR MOULD QC (DfT): For a period of six months.

207. MR HAVERY: Well, you say for six months.

208. MR MOULD QC (DfT): Well, that’s what we’ve told you.

209. MR HAVERY: Well, sorry, you say that bit for six months, but the whole of that

stretch is for two years. I think six months is a long time anyway, but the whole of that

stretch for two years, you’re telling me HGV drivers will come down Aston Church

Road, and continue, forgo the right turn, continue going down Aston Church Road, and

round Washwood Heath Road to go through that access? They will turn that into the

principal access.

210. MR MOULD QC (DfT): Can we go back to A138 please, because I am conscious

of the need not to dwell too long on an issue, but I just want the Committee – I have

pointed out to you that the only significant area we need to close off on Assurance 2 is

whether the number of months there should be four or six, yes? So, let’s assume that we

get to six, we have said we will give you that assurance, and so the Committee can take

away, with confidence, the knowledge that the promoter is committed to limiting the

period during which Pennine Way will not be available to your tenants, total closure in

other words, to limiting that period to a maximum of six months, subject only to some

unforeseen event, some act of God that none of us can predict. So am I right, I think,

Mr Havery, in saying that the sharp question is, is it acceptable to require your tenants,

so many of them as remain, your tenants, for that period of no more than six months, to

33

use Dorset Road as their principal access, rather than choosing between Dorset Road

and Pennine Way. Would you accept that?

211. MR HAVERY: Well, I understand the question, you’re asking my view, is that

for six months, six months is a long time. Having some degree of certainty, or some

certainty on the timescale is one thing, although we don’t know when that is, when it

starts or finishes, but that doesn’t take the issue away. My view is to not to have your

principal access for six months is fundamental. It will compromise the tenants.

212. MR MOULD QC (DfT): I understand that, that’s your view, the Committee have

it. One more question, next page please on the screen, Assurance 8, ‘The promoter will

replace security gate house with barrier control which proposed to demolish with the

security gatehouse in accordance with the specification at a location agreed with

Hansteen, we have said we are quite happy to agree to that assurance’.

213. MR HAVERY: Thank you.

214. MR MOULD QC (DfT): Thank you very much indeed.

215. CHAIR: Can I just ask, Mr Mould, the viaduct route; when you say closure

maybe for 18 months, is it total closure, is there any time when it would be partially

closed, say one way running?

216. MR MOULD QC (DfT): The one-way running is the Phase 2 plan – oh, I see

what you mean, one way running over the whole?

217. CHAIR: Yes.

218. MR MOULD QC (DfT): I do apologise, I misunderstood

219. CHAIR: Is it totally blocked off from the other ways that are to be used?

220. MR MOULD QC (DfT): My understanding is that during Phase 3, it’s totally

blocked off, but I will check that.

34

221. CHAIR: In phase 2?

222. MR MOULD QC (DfT): Can we just go back to the plan.

223. CHAIR: I just ask, because part of the problem is –

224. MR MOULD QC (DfT): P276.

225. CHAIR: If HS2 don’t explain to the owners of the estate how the traffic

management thing will work, then it’s no wonder that people are here, trying to close

the problem, so there is a communication problem.

226. MR MOULD QC (DfT): I take that point and we will do better.

227. MR THORNTON: Can I ask one more question?

228. MR MOULD QC (DfT): Sorry, Mr Thornton, I’m not trying to –

229. CHAIR: Can you just do the Phase 2 point, please.

230. MR MOULD QC (DfT): Yes. The Phase 2 point is this; that during that period

where I’ve said we think is going to be of the order of a year, there will be partial

running on Saltley Viaduct, as you can see. Pennine Way will still be open but you will

have to turn left out or right in.

231. SIR PETER BOTTOMLEY: And the approach in essence will be from the

south…

232. MR MOULD QC (DfT): That’s right.

233. SIR PETER BOTTOMLEY: Sorry, not south – from the east.

234. MR MOULD QC (DfT): The east, yes. So partial, not total closure. The next

35

slide, Phase 3, this is the critical phase, so far as this issue is concerned, we’ve said we

will commit to no more than six months for this one, and that’s when total closure, so

any tenants on the remaining estate will have to, perforce, have get access and egress

from Dorset Road and Arley Way. Sorry –

235. MR THORNTON: Yes, just for a couple of things, has there been any analysis of

the increase in loading and unloading times and waiting times for deliveries and coming

and going, because of possible traffic jams and restrictions on here, could cause a

slowdown in the speed at which lorries can come in and out, that would be the one

thing. The other thing, I was interested in Mr Havery’s point, that as long as the viaduct

is closed at any point, has there been any analysis of why lorries would not go down

Arley Road, because it’s obviously shorter, and why they would continue down the

Aston Church Road and come in from that side? My experience of most drivers is they

will take the shortest route, especially if that’s what their sat nav says. So it would be

quite interesting to know what analysis is of why a lorry driver would take a longer

route whilst the viaduct’s closed, and not continue to go down the Arley Road entrance

which is shorter.

236. MR MOULD QC (DfT): Traffic assessment when you’re looking forward to a

world which is in the future, as you will appreciate, it’s based on a series of

assumptions. Those assumptions are often based on what we know from behaviour,

they involve a range of judgements. Our assessment, in this case has come to the view

that we think that, notwithstanding the points you make, drivers of large vehicles who

have available to them, access to the estate from the south, as shown on the phase 2

slide, the majority of them are likely, all things being equal, to chose a route that goes

Aston Church Road, Washwood Heath Road, and then across the roundabout there and

then into the site. Some of them, no doubt will seek to turn right into Arley Road and

avoid the extra distance, as they do now.

237. MR THORNTON: Not if they come off the Saltley Viaduct because they’ll be

coming in from the other direction.

238. MR MOULD QC (DfT): I know, but we can’t not close Saltley Viaduct –

36

239. MR THORNTON: No, I understand that, I think it’s very important to try and

understand is that, just to make an assumption that lorry drivers will go that way, it

doesn’t – from what I’ve experienced in local government, where lorry drivers will go

down the narrowest of routes possible rather than duck round a proper road and it’s

incredibly difficult to stop them doing it, and I’ve had this fight in my constituency for

the last five years in a particular area, and they continue to come off and go down a

narrow country road, rather than a wider road, and it seems to be totally against my

experience in any traffic management, to assume they won’t take the shortest route.

240. MR MOULD QC (DfT): We don’t assume that they all will, we don’t assume

they all won’t, we assume that there will be some who will and some who won’t. And

so, you’re absolutely right, there’s no doubt, and at least a proportion of lorry drivers

will decide to turn right into Arley Road, as they do now.

241. CHAIR: Ian.

242. MR MEARNS: Mr Havery, from your perspective, I think at the start, we were

talking about Unit One, Dorset Way as well, which loses its service yard as part of the

land acquisition, is that anywhere near been resolved?

243. MR MOULD QC (DfT): I’m having to take that back for a bit of further

consideration over the course of the adjournment. I can’t promise you we will have a

resolution but I know what I’m looking for there.

244. MR HAVERY: But the issue there is twofold, there’s one what effect removing

the yard has on Unit One, Dorset Way, but it’s introducing then taking Unit One, Dorset

Way might help alleviate the fact that they’ve taken away all of the common area, all of

the car parking, for a temporary – it might help that, but we’re trying to mitigate. It’s

not the silver bullet, as far as I’m concerned. It doesn’t deal with the whole.

245. MR MOULD QC (DfT): I understand both those points.

246. CHAIR: Sir Peter.

37

247. SIR PETER BOTTOMLEY: If we assume that the cost of security does not come

down by nearly 40% which is what I understand if we take out eight units from 21,

which is roughly 13 or something, is there compensation to either the users or the

operators if you’re left with a permanent overhead that’s shared among fewer pairs?

248. MR MOULD QC (DfT): There wouldn’t be compensation to the occupiers

because they won’t have any land taken, so they’d be no trigger for them to seek

compensation. It seems to me, that in principle, it might sound as a heading of

compensation for the freeholder owner –

249. SIR PETER BOTTOMLEY: I’m just trying to work out who might apply for one.

250. MR MOULD QC (DfT): Can I take that away, because I’m genuinely trying to

get my head round that and I’ll try and give you an answer on that.

251. SIR PETER BOTTOMLEY: Any my last point which I suppose is one for you,

Chairman, if the promoter and the petitioners don’t reach an agreement, the question in

front of us is almost solely, unless we think out conditions of our own, of saying the

promoters have to take the lot or not?

252. MR MOULD QC (DfT): There are actually two stages to the way that the

petitioners put their case on this, and it’s quite important, actually, that I flag this to you

because the first stage is, should we take the lot? And Mr Village has said at least you

could do that, and we would like to see that done after Royal Assent. But they’re also

going to say, as I understand it, that we should take the lot before Royal Assent. Now

that would be to drive a coach and horses through the public legal provisions on blight

notices.

253. SIR PETER BOTTOMLEY: Have we heard why it would be cheaper to the

promoters to do it at one stage rather than another?

254. MR MOULD QC (DfT): You haven’t heard from us on that. I’ve seen a one page

summary document that one of Mr Village’s witnesses has procured from somebody

else on that.

38

255. CHAIR: Try and finish with this witness before we – Mr Village, you’ve got

some questions?

256. MR VILLAGE QC: Very briefly, sorry, Mr Havery, Mr Mould was going to ask

you to re-examine you now, which is often the most difficult part for any witness but

very briefly Mr Mould repeatedly said to you that the concern in relation to access via

Dorset Road, in other words the secondary access, was for a period of six months and

that would be the extent of it. We now know that Saltley Viaduct will be closed for

potentially up to two years, that’s the promoters’ case. Do you therefore accept Mr

Mould’s proposition that the Dorset Road would be used only for six months?

257. MR HAVERY: Well no, it won’t. It won’t, it will become the principal access.

258. MR VILLAGE QC: And in relation to Aston Church Road, and Washwood Heath

Road, you know this area very well, tell the Committee, is that, in fact, a road which is

free-flowing, where vehicles, particularly HGVs can scoot round that road to get access

from the east into the Saltley Viaduct entrance?

259. MR HAVERY: I’d say it was a more substantial road than Arley Road, I mean I

don’t accept that – I think the language before on Arley Road was that it was a

substantial road, or big road, or something like that, I mean it isn’t. Aston Church Road

and Washwood Heath Road are more substantial than Arley, but I wouldn’t describe

them as free-flowing.

260. MR VILLAGE QC: They’re not free flowing? Thank you very much indeed.

Those are all the questions I have, Chairman, and thank you very much.

261. CHAIR: Okay, who is your next actual witness?

262. MR VILLAGE QC: It’s going to be Mr Lloyd, who’s the Director of DTZ,

property consultants.

263. CHAIR: Is he going to be long?

39

264. MR VILLAGE QC: No, he’s not going to be long and the question is, can I get

him through by quarter to? I could.

265. CHAIR: Well, that would be marvellous then. The Prime Minister’s in Scotland

anyway, so team two is on today.

266. MR VILLAGE QC: Prime Minister’s Questions are less compelling today.

267. CHAIR: Thank you very much for your evidence, thank you.

268. MR VILLAGE QC: Mr Lloyd whilst you’re sitting down, I’ll introduce you to

the Committee; you’re Simon Lloyd, Bachelor of Science, Honours degree in estate

management, and a member of the Royal Institute of Chartered Surveyors and you’re a

senior director of DTZ, and head of the company’s industrial and logistics team for the

United Kingdom and you’ve over 35 years of experience of the industrial market in the

Midlands, based in the firm’s Birmingham office which employs over 250 staff. To add

to that, DTZ manages about 30 industrial estates across Birmingham, on behalf of other

landlords, is that right?

269. MR LLOYD: Yes, it is.

270. MR VILLAGE QC: And in particular, DTZ represent Standard Life Investments

on the Gravely Industrial Park?

271. MR LLOYD: It’s Gravelly Industrial Park.

272. MR VILLAGE QC: Gravelly, sorry. And you are very familiar with this

particular industrial estate, is that right?

273. MR LLOYD: I am, certainly, yes.

274. MR VILLAGE QC: You say in your evidence that there is – perhaps I can just

ask you this, how much industrial property is available in the Birmingham area at the

40

moment?

275. MR LLOYD: Well, total analysis is not done because the number would be too

big and too difficult to analyse for everybody, but what my firm does is to analyse

availability of buildings over 50,000 square feet, because that’s quite a meaningful

measure, and at the moment, across the Midlands, there’s about 22 million square feet of

available space. To help, our rough assessment of how that means in terms of total

market size, you multiply figure by about three.

276. CHAIR: Could you speak up please?

277. MR LLOYD: Yes, of course.

278. MR VILLAGE QC: Mr Lloyd, I just put this into context, could you explain how

the petitioner has turned round this industrial estate from where it was to what it is now?

279. MR LLOYD: The fundamentals of Saltley are, as has been described already, it’s

in a good location, it’s accessible to the City centre, and importantly, the motorways and

strategic road network in the City, and customers and suppliers, and you need that sort

of business matrix to make all these things work. However, it is in a deprived area, my

firm has been the letting agent on the park, not currently, but for over 15 years and the

location of the site has always been one that’s been easy to sell to people. It’s easy to

describe how to get there, you just say, ‘Heartlands spine road’ which is shown on the

plan as the A47 Heartlands Parkway. Saltley Island, over Saltley Viaduct and you’re

there. Very easy for people to find and they like that because they’re all big roads, they

are roads which they can drive HGVs down without any problem, they can find it, and

they can get around the City very easily from it.

280. The other advantage it has is it’s quite a large site, it’s critical mass, so tenants can

move around in the estate if they need to without the need to change address. However,

it isn’t a new estate, it’s relatively old and the buildings have been built over a period of

time. Although there are two modern buildings right at the front which are to be

acquired, unfortunately. So when you might hear some story in the press about how

there’s a shortage of industrial building in the Midlands, that is the Grade A, that’s the

41

top quality buildings, that’s not the sort of quality of buildings we’re looking at at

Saltley.

281. MR BELLINGHAM: Excuse me, Mr Lloyd, can we get this on the screen, it’s

very helpful to have it.

282. MR VILLAGE QC: Can I suggest P272, sir?

283. MR BELLINGHAM: Thank you very much, it would be very helpful.

284. MR LLOYD: So you can see where I was describing the island to the west of the

estate, which is the one from Saltley Viaduct on to the Heartlands Parkway, or

Heartlands spine road as we call it colloquially in the area, and that is the way people

come into the estate. You can see also to the left hand side to the west, other industrial

property, and you can see from that, hopefully that it’s a mixture of age and character.

One thing that is of paramount to businesses nowadays, in all of the operations, is risk

management. Risk comes in various different ways; we’ve heard about supplying

Jaguar and the big penalties that they impose on some of their customers, that is one

measure of risk. Another measure of risk is, can you get in and out of the site without a

problem. Another measure of risk is, is it secure? Anixter had a big problem of theft of

their valuable product. Other tenants on the estate also have valuable product, and they

like the security which Hansteen have put into it. Which really sets it apart from most

of the other estates in the City.

285. MR VILLAGE QC: So it’s fully let now?

286. MR LLOYD: It is fully let now, yes.

287. MR VILLAGE QC: The question then arises, as to whether or not, following,

first of all, loss of a number of tenants because land is acquired for the HS2 project,

knock on effects in relation to the service charge going up, to cover security, and issues

regarding security and access during the period of construction. Now what’s your

professional view as to whether or not this will be maintained? I mean, let’s just

understand precisely what the promoters say in the promoters’ response document, the

42

way they put it, is, ‘Although some rearrangement of access’ – this is Paragraph 10 on

page 14, ‘Although some rearrangement of access and circulation might be required,

both during construction and after the works to construct the railway are complete, the

remaining units will be made secure and hence offer a viable and attractive entity for the

petitioner and play a role as an important business location in the City’. From what

you’ve heard and understood, do you accept that proposition?

288. MR LLOYD: Well no. I think that one of the issues that we have in security

alone is the significant investment that Hansteen made when they bought the sight,

about £785,000, in the security systems which have made it very, very secure. When

they acquired it, there was a security presence on site, which is a man in the gatehouse,

and the barrier up, which is typical of most other estates in the area, which is why their

crime rates are higher. This one has no crime that I’m aware of, nothing reported as I

understand it, since the new security was been put in place. So, to that extent, it’s

attractive. Now, when the works are taking place, you’re going to have construction

traffic in, yes, you can have some measures of security and control over that, I’m sure

that can be put in place, but also, you’ve got this sort of fluctuating boundary of what

the estate actually is, so you really have to reinvent all of the security perimeters, and

how that’s going to work on site. But I can’t see that the overall cost of that is going to

change materially, given the level of security they’re currently providing and is required

and demanded by their occupiers.

289. MR VILLAGE QC: So overall cost of security will not change, and so far as the

accessibility of the site, what do you have to say about that, because what’s now

proposed, and could we have please, slide P272 back please, the promoters’ case is, well

they come via Aston Church Road and they use Washwood Heath Road and would

eventually come into the site, provided, of course, the Saltley Viaduct entrance is open,

it’s going to be closed for six months, and they’d come in like that. Now, are you still

going to have an interested potential client in your car, as you drive them round

Washwood Heath Road?

290. MR LLOYD: No you’re not, unfortunately, it is quite torturous in terms of the

road network around there, although it is a relatively main road, my experience of it, it’s

very congested. A lot of residential streets coming off that and a lot of parking on the

43

street as well.

291. MR VILLAGE QC: Okay. What about then the alternative, which is Arley Road

and what’s your potential customer going to think about that, as an access, with HGVs?

292. MR LLOYD: Well, it comes back to what I was talking about just now in terms

of risk management and they’ll see it as put on a residential road, and there are houses

all the way down one side of it, and okay, yes they don’t – some of them do, but not all

of them look over the road, that’s because the land slopes up, away from Arley Road,

and that’s the best way of configuring those house and increasing the density for the

developer, so they will see that as very secondary access and in the times that we were

marketing the site, we always brought people in, as I’ve described, through the Saltley

Viaduct entrance, which is the main entrance, and refer to the benefits of having the

opportunity of having a secondary access rather than saying that was a primary route

into the estate.

293. MR VILLAGE QC: What’s going to happen then? Really, what it comes down

it, let’s just fast forward to when the works start, a number of tenants will have left

inevitably, because they have to, then leases come up for renewal – in the ordinary

course of events. What are those tenants going to think about the arrangement, as it will

exist, two year’s closure of Saltley Viaduct, coming round the back streets of Saltley

and using Arley Road?

294. MR LLOYD: It will make it very unattractive and it so happens as well, that a lot

of the tenancies expire during the programme for the works. So it’ll make it very

unattractive, because of the disruption and the accessibility of the site

295. MR VILLAGE QC: Now, Mr Mould talked in terms of the last witness of having

to prove a certainty, but I’m not interested in that, and neither are the Committee. They

are interested in a balance of probability and that’s how we make decisions generally in

planning. What in your view, on a balance of probability, is the future for this estate?

296. MR LLOYD: My view is that a significant number of the tenants will leave and it

will be extremely difficult to re-let the other units because of the new arrangements for

44

access into it, for that two year period. And during that time, you’ll enter this sequence

of terminal decline of the asset which was experience before.

297. MR VILLAGE QC: Final matter – attached to your proof of evidence, and could

we have it on the screen please, it follows page 13, as is a note from John Davis, who’s

an experienced compulsory purchase and compensation surveyor for BNP Paribas, so

your proof is A133, and it’s right at the back of that. Thank you. Next page please,

thank you. It’s not legible.

298. CHAIR: It generally works quite well.

299. MR VILLAGE QC: Well you can probably tell from the written page that you

probably have in front of you that the market value as it stands at the moment of the

estate is identified as being £40 million, other losses, lost rents and rates charges, £3.7

million. Can you just explain what the rule 6 payment relates to please?

300. MR LLOYD: That relates to the disturbance losses caused by the HS2 scheme,

paid to the tenants.

301. MR VILLAGE QC: And what’s the purpose of identifying that now, in other

words, what is the petitioner saying in terms of losses?

302. MR LLOYD: That that is a loss that would need to be possibly paid by the

promoters because of the scheme itself. But if the promoters were in active control of

the estate, they could manage the process a lot more easily because they make the

decisions.

303. MR VILLAGE QC: Now, I think that, you may have some questions, Chairman,

but I’m just looking at the time. I don’t know whether you –?

304. CHAIR: Do you have any questions, Mr Mould on this?

305. MR MOULD QC (DfT): Just two. Do you want me to do them now?

45

306. CHAIR: Yes.

307. MR MOULD QC (DfT): First question on this page that we can faintly see in

front of it, this valuation of course, assumes that the Committee has decided that the

Secretary of State should acquire the whole of the estate and the only outstanding matter

is when that acquisition should take place. That’s right, isn’t it?

308. MR LLOYD: As I understand it, yes.

309. MR MOULD QC (DfT): The other question is this; you’ve given the judgement

based as a professional on the attractiveness of the estate on the renewal of existing

tenancies and no doubt, on the perspective new tenants, in the knowledge that there will

be partial or total closure of the Pennine Way access to Saltley Viaduct, as I’ve

explained for a period of up to two years, right?

310. MR LLOYD: Yes.

311. MR MOULD QC (DfT): Now, any existing tenant who is contemplating whether

they want to renew their lease on that basis, or – well, the alternative is to move

elsewhere, isn’t it, by definition?

312. MR LLOYD: Yes.

313. MR MOULD QC (DfT): And in making that judgement, any of those existing

tenants, such as Anixter and others, will have in mind the fact that that this is a period of

time that once it’s gone, and once the work on the estate that have been completed, this

is an estate that will retain the locational advantages that Mr Havery spoke about earlier,

added to which, it will have the attractions of its proximate location to the HS2 railway

station, that would be a factor that people of that kind would take into account, isn’t it?

314. MR LLOYD: Yes, but the estate doesn’t move as Mr Havery also agreed. I’m

not convinced that the HS2 station is a major driver for occupiers on Saltley; I think it’s

meant to be of benefit to the area generally, which impacts on other estates as well. I

think if we look at – I’m sorry, could you repeat the question?

46

315. MR MOULD QC (DfT): I think you’ve answered it, thank you.

316. CHAIR: Is that your final question?

317. MR MOULD QC (DfT): Yes.

318. CHAIR: You have a third witness, Mr Village?

319. MR VILLAGE QC: Can I just re-examine the witness?

320. CHAIR: Yes, sorry.

321. MR VILLAGE QC: I mean the part of the question that you’re seeking to answer,

that Mr Mould was putting to you, that it would generally be seen as an advantage at the

end of the period for the tenant who retained, in other words, well, it’s wonderful to

have HS2 nearby and the locational attractions still remain, but what would be the

disadvantages, the ones of course he didn’t ask you about?

322. MR LLOYD: Yes. The disadvantages would be that, firstly, the service charge

would be significantly higher than it is at the moment which would be a major

disadvantage. And the other thing is that on the estate itself, there is an alternative route

around the estate. Is it possible to have a –?

323. MR VILLAGE QC: Yes, why don’t you get P272 on? Or do you want something

a little bit more –?

324. MR LLOYD: The one that shows the roads on the estate would be better. I don’t

know the number I’m afraid.

325. MR VILLAGE QC: Oh, right. Why don’t we go to A135? Thank you.

326. MR LLOYD: Okay, at the moment you have the main spine road through the

estate, as Pennine Way, which has been described previously, and as Mr Havery has

47

also described, Anixter often load and unload their vehicles in that road, and i-Force

quite often have vehicles queuing in that road, so it can be quite obstructive at times. If

you’re an occupier on the estate, you want to make sure you can get on and off it pretty

easily and at the moment, there is the loop round which goes to the west, which is the

top of the plan, around Dorset Road, which gives the alternative route. Now that is to be

acquired as part of that scheme, so that goes. So you can sense that at times, the whole

thing might just get log jammed internally, which again, would be a major deterrent for

the occupiers. The other thing just to point out is that Anixter have two buildings, one

they’re just moving into, and one they’ve been in for some time, which would be

acquired as part of this scheme, and they are the major tenant.

327. MR VILLAGE QC: And clearly Anixter think it’s important that their three

buildings are located in more than one estate. What’s your general concern about them

losing one of their main buildings?

328. MR LLOYD: That there wouldn’t be an opportunity for them to replace that

space on the same estate.

329. MR VILLAGE QC: Final matter, of course, again, and it relates to Mr Mould’s

general point about advantages, but have you already seen signs in relation to renewal of

leases from tenants, or potential tenants of their reluctance to take space on this estate?

330. MR LLOYD: Yes, we acted for one particular occupier who was looking to take a

unit on the estate, and because there was no certainty over how long they could stay

there, they relocated elsewhere.

331. MR MOULD QC (DfT): Could you give us a name please?

332. MR LLOYD: Yes, Unipart.

333. MR VILLAGE QC: Thank you.

334. CHAIR: Thank you very much, Mr Lloyd. And your third witness is –?

48

335. MR VILLAGE QC: Mr Axon, sir, do you want hear him now?

336. CHAIR: I think we will, although given Saltley Viaduct’s closed for two years

and the access road has problems for six months, you don’t need to lay it on with a

trowel, we know there’s going to be –

337. MR VILLAGE QC: I’ll try not to lay it on with a trowel. There are some further

points that have arisen this morning which I’m going to ask him to deal with, but I’ll

take it as quickly as I can. Mr Axon.

338. CHAIR: Welcome back Mr Axon.

339. MR AXON: Thank you very much.

340. MR VILLAGE QC: Mr Axon, you are Mike Axon, you have a degree in civil

engineering from City University, you’re a fellow of the Chartered Institution of

Highways and Transportation…

341. SIR PETER BOTTOMLEY: He’s known to us.

342. MR VILLAGE QC: I’m sorry, thank you.

343. CHAIR: He’s been busy.

344. MR VILLAGE QC: Mr Axon, I want to start with the junction please of Aston

Church Road and Arley Road, we’ve got on the screen at the moment A135, and I think

that might be sufficient for the purposes of these questions. What’s you general concern

about the appropriateness of Arley Road as a principal access to the estate?

345. MR AXON: Yes, well you may have seen in my evidence; I’ve looked at this

junction, it’s a particular unsavoury junction in terms of both environment and safety.

And so my concern is this, that, as a consequence of the construction activity, the use of

that junction will be intensified by HGVs, significantly. Talking about HGVs, it is at

the moment, an unsatisfactory junction for the movement of HGVs, any ex-HGV drivers

49

amongst the Committee will understand the land take associated with the movement of

an HGV around that junction – effectively, large HGVs take up the entirety of the

junction and the buildings are so close to the junction that inter-visibility is very limited,

so when two large HGVs actually meet at the junction, they can’t pass, we are really

looking at one HGV manoeuvring out of the way of another HGV. We also see at that

that junction HGVs overriding the footway.

346. MR VILLAGE QC: There’s a picture of that I think on page 13 of your proof, can

we have your proof please up on the screen, A132, page 13?

347. MR AXON: Yes, thank you. This is a picture that was in fact undertaken by – I

commissioned an independent safety auditor to actually give some independent advice

about the safety characteristics of this junction. This truck is, in fact, driving over the

footway on its way into Arley Road, and the picture you can see next to it is the

evidence of kerb damage, i.e. it’s not a one off. So we have a position that is

unsatisfactory because it’s the juxtaposition of community location with movement by

large vehicles. Now the consequence of HS2 is a substantial change in the detriment, if

you like, that that junction experiences. To such an extent, that the Independent Safety

assessor has now labelled that as a high risk environment for pedestrians as a result.

348. MR VILLAGE QC: And in terms of – just on a scale of what, Mr Axon?

349. MR AXON: Well, high risk in this particular circumstance, and this is…

350. MR VILLAGE QC: Can you deal with the paragraph 3 –

351. MR AXON: I do, the scale is, very low, low, medium, high, very high. But what

that means is that accidents are likely and the nature of the accidents are likely to be

serious, where serious is on a scale of slight, serious, fatal. That’s the order of

magnitude of the effect on this local part of the community.

352. MR VILLAGE QC: I think that the promoter says, ‘Well, actually, we’re

proposing some works at this junction’. Now, have you been able to identify any works

at this junction?

50

353. MR AXON: Well, I saw that this morning. I hadn’t identified any works at this

junction, and when I say works, changes to the layout, or works that would change the

characteristic of the movement. I’ve since found a sentence in the Bill and a drawing

which seems to me to be no more than surface works, engineering works, effectively, to

surface and drainage. That, I have not seen any works that HS2 is proposing in way to

suggest that change in that junction would occur, in such a way that the safety

characteristics would be improved.

354. MR VILLAGE QC: It’s said by the promoter that the – if we could have back on

the screen the plan at A135, it’s said by the promoter, ‘Well, access at Saltley Viaduct

will be closed for six months’. The issue therefore is a detriment arising on Arley Road,

use of that for a period of six months only. Do you accept that?

355. MR AXON: No, I don’t. I just think that is not right, for the reasons that have

been aired to an extent, that drivers will act to minimise their inconvenience. And that

means that they will take the shortest and the easiest route. Now bear in mind that

during the period of construction, the HS2 team itself is forecasting what it calls

substantial congestion, for instance at the Aston Church Road, Washwood Heath Road

junction. They are forecasting queues of over 1.2 kilometres, blocking back onto Aston

Church Road. Now, it won’t get to that because people will just act to minimise their

inconvenience, but in acting to minimise their inconvenience, our lorry drivers will turn

down Arley Road, it’s not a difficult point, to be perfectly fair, so I don’t accept that

affect is limited to six months. The period of effect is in the order of 18 months to two

years, from the evidence that I’ve heard.

356. MR VILLAGE QC: Could we have P272 on the screen please, 272? What does

the TA forecast in terms of congestion on Aston Church Road and Washwood Heath

Road?

357. MR AXON: Well the transport assessment report, I think TA, what it does is it

forecasts that Aston Church Road and Washwood Heath Road are actually over

capacity, i.e. you can’t accommodate the demand that is forecast within the junction that

is provided. And what that means is that if you took it to its final analysis, you’d end up

51

with grid lock as a result of that mathematical model. Again, my view on that is that it

won’t happen quite that way, but what it does mean is that you can make the judgement

that there will be, what I will call, a severe inconvenience, on that part of the network, as

a result of the construction of HS2.

358. MR VILLAGE QC: And final matter, what is the increase in HGVs that will be

experienced on Arley Road, whilst that access is being used by also construction traffic?

359. MR AXON: Well if you include construction traffic, it’s probably in the order of

240 HGVs in a day.

360. MR VILLAGE QC: What, extra?

361. MR AXON: Extra in a day.

362. MR VILLAGE QC: Above what?

363. MR AXON: Above the existing. At the moment, there’s give or take, about 200

HGVs using the Arley Road access, so we’re really looking at may be another 200, 240,

depending on whether you include construction traffic or not, and bearing mind, if I can

just say, that that is over a 24 hour period. The TA, transport assessment report, when it

looked at this, did not, as far as I can see, consider the affect of the redistributed traffic

to the site in its assessment. It looked at the affect of construction traffic for HS2 and it

did so in the context of the peak commuter hours, eight till nine, five till six. Now this

impact, the impact that I’m talking about, is over rather more sensitive periods of the

day or night and so it goes further than the assessment that the HS2 TA has undertaken.

The effect of extra HGVs at nine o’clock at night may well be rather more sensitive than

at eight o’clock in the morning.

364. MR VILLAGE QC: Mr Axon, thank you.

365. CHAIR: Mr Mould?

366. MR MOULD QC (DfT): Mr Axon, good afternoon to you. Can we just set the

52

context for this, everybody in this room wants to see what remains of this business park,

in other words, the area within the red line, which is not also hatched green on the

screen in front of us, everybody in this room wants to see that business park continuing

to function as an active business park throughout the construction and following the

construction of HS2, if it can be achieved, don’t they?

367. MR AXON: I don’t know.

368. MR MOULD QC (DfT): Well, I don’t think that the petitioner is advocating that

the business park should close. I think it’s saying it’s concerned that it may.

369. MR AXON: Thank you.

370. MR MOULD QC (DfT): That’s the position, isn’t it? You know what your

client’s case is, don’t you?

371. MR AXON: Yes, well, thank you very much for that.

372. MR MOULD QC (DfT): Right, good. Now, on that basis, we know that Saltley

Viaduct has to be partly restricted, I’ve said we think it will be for about a year, and we

know that it’s got to be fully closed off to traffic from the business park for a period of

six months and we’ve said that it will be for no more than six months, we’re going to

give an assurance to that effect.

373. MR AXON: Yes, I understand.

374. MR MOULD QC (DfT): Now, clearly for that period, if the business park is still

operating, under whose ownership is for the Committee to decide, but if the business

park is still operating during that period, traffic associated with the tenants of the

business park will have to find another way into and out of the business park, won’t

they?

375. MR AXON: Yes.

53

376. MR MOULD QC (DfT): Right. And you’re not saying, are you, that the impacts

of them finding that other way via Dorset Road and Arley Road are so severe in terms of

safety and environmental impact, that somebody should step in, if they had the power to

do so, and actually close down the business park, you’re not saying that, are you?

377. MR AXON: Well in fact, what I’m laying in front of the Committee are the

disbenefits of the effect of HS2, and insofar as I have indentified an environmental and

local community impact, then I lay that in front of the Committee in order for the

Committee to be able to make an appropriate judgement in that context. I am not

suggesting, not recommending one way or the other whether the business park should or

should not continue to exist through this period. But of course, my evidence is that the

actual effects on the local community are severe and they are not mitigated by the

current proposals.

378. MR MOULD QC (DfT): That’s something for others to think about, I think, isn’t

is, so thank you for that. Now, on that premise, the business park stays open, there will

clearly be, without HS2, there will clearly be a quantity of traffic using Arley Road,

having gone in or out of the business park via Dorset Road, so that period of up to two

years, there will be an increased quantify of traffic, or the risk of it, but increased

quantify of traffic, over and above the traffic that now uses that access into the business

park, that’s a fair assumption isn’t it?

379. MR AXON: Yes it is. Thank you.

380. MR MOULD QC (DfT): Now that increase would include a quantity of HGVs,

won’t it?

381. MR AXON: Yes.

382. MR MOULD QC (DfT): The overall volume of traffic, getting into and out of the

business park, during the period of construction of HS2, is going to reduce, because

eight of the units are going to go, right?

383. SIR PETER BOTTOMLEY: Units are going.

54

384. MR AXON: Yes.

385. MR MOULD QC (DfT): So that will impose some sort of limitation on the

increase in traffic that might flow through Dorset Road and Arley Road, for the period

in which Saltley Viaduct and Pennine Way is either partially or totally blocked?

386. MR AXON: Yes, very helpful you’ve mentioned that. I did, in fact, take that into

account in my assessment.

387. MR MOULD QC (DfT): I’m sure you did. And finally, the environmental

statement, as you know, has included the scheme’s prediction of the range of HGV

traffic generated by HS2 activities that is likely to go through that junction, and the

range, on a daily basis is between 23 and 37 vehicles, isn’t it?

388. MR AXON: Yes, that’s absolutely right. What it doesn’t appear to have taken

account of is the affect of the redistributed traffic as a result of the closure of the Saltley

Viaduct access.

389. MR MOULD QC (DfT): We’ve just talked that, haven’t we?

390. MR AXON: Well, you had my answer.

391. MR MOULD QC (DfT): So that’s the scale of change that we’re talking about,

and this is in relation to an access that is already used on a daily basis both by heavy

goods vehicles and by other traffic, getting into and out of the business park, for the

range of activities that it needs to have business there.

392. MR AXON: Yes, that’s absolutely right, and of course, I’m not disputing that in

any way, but what we don’t tend to do, is we don’t tend to say, ‘There’s already a

situation which is difficult and not what we might want and because we’re only making

it worse, that that is therefore an acceptable situation’. Or a situation that in fact, we

should encourage or seek not to mitigate.

55

393. MR MOULD QC (DfT): Okay, and the purpose of this, my last question, thank

you for that, and I think everyone’s clear now on the key points, this, in the context of a

case, in which the Committee has been asked to say that the business park not should

cease to operate, but the business park, insofar as it continues to operate, it should

operate under the management and ownership of the Secretary of State, rather than the

management and ownership of either Hansteen or a successor in title to them, as a

commercial estate owner; that’s the context in which you give your evidence?

394. MR AXON: Yes, that’s right.

395. MR MOULD QC (DfT): Thank you very much indeed.

396. CHAIR: I’m minded to do another 15 or 20 minutes; would you like to make

some final comments?

397. MR VILLAGE QC: Not at this stage.

398. CHAIR: Not at this stage, okay. Mr Mould, do you intend to call any witnesses?

399. MR MOULD QC (DfT): No I don’t. I think you’ve got the key points that we

need you to consider. What I would like to do in the interests of trying to wrap things

up before you close, if I can just have three to four minutes of your time, and I’ll just

make one or two closing comments, if I may.

400. CHAIR: Okay.

401. MR MOULD QC (DfT): The first point is this: you’ve seen the set of assurances

or undertakings that have been presented to us for our consideration; I hope you’ve got a

sense from the debate that apart from the issue of Unit One, Dorset Road, there’s

precious little between us on those undertakings, in other words, subject to some

refinements to allow for utilities works, and that kind of thing, there’s broad agreement

on that.

402. What we haven’t shown you until now, is the two letters that we have sent over

56

the past couple of days, they are on the system, we can just call them up briefly please,

P301 and P303. Let’s just take P301 and scroll right down please to the bottom of page

5. Last Friday, we sent the petitioners a letter with three specific assurances on liaison

and access; I won’t read them out. The first of them is set out at the bottom of that page

about liaison, but that’s not actually in the petitioner’s list and we’d like to add it in

because we think it would give them a further measure of comfort.

403. Next page please, we have had debate about this. Number 2 on that page is about

maintaining at least one access to the estate throughout the period of the works, and the

second is about reinstating the access to Saltley Business Park. We’ve built on that

because we’ve now given a timeframe for that, and so if we get to the next set of

assurances, a letter from yesterday, and you’ll see there are a number of assurances

about consultation on layout, about maintaining continuity of access within the estate, as

opposed to getting into and out of the estate. Next page, insurances about circulation

roads and about security and so on. Now they have largely been incorporated into

undertakings. So that’s just to give you a flavour of how close we are in relation to

these matters.

404. The one matter that is outstanding is One, Dorset Road, and I’m hoping to be able

to report back to you, if not today, soon.

405. So that is, if you like, setting out, how far the project has been able to go in trying

to minimise the actual impacts on the operation of this estate during the construction

works. That’s the context in which you’re being asked to consider the alternative,

which is that we should go the further step of acquiring the whole. What I suggest to

you is that, in the absence of those assurances, they would be no question we should

acquire the estate. What I suggest to you is, with those assurances, and we hope to be

able to reach final agreement on them in a short time, with those assurances about

access and security and so forth, that the balance then swings clearly against the

Secretary of State, because it’s better to have this estate in commercial ownership and

management, on that basis, than to have it owned by the Government.

406. The other point I want to make is this, and it’s vital not only for this case, but also

for other cases of a similar kind. It’s one thing to consider whether or not the estate

57

should pass partially or wholly into the ownership of the Government, that’s the issue

that’s before you. It’s quite another thing to say that the Government should acquire

that estate in advance of Royal Assent. And what we say is this; if your decision

ultimately, is that we should acquire the estate, wholesale, then that clearly should not

happen until after a decision has been made to proceed with this project. That is in

terms of powers and in terms of funding. The reason for that is quite straightforward. It

is unprecedented in terms of public law, unprecedented, for an investment owner of this

kind, effectively to be given relief against the blighting effects of the scheme, at this

stage in the process. The blighting provisions of the law, which have been in place for

many, many years and been very carefully considered by this house during those years,

insofar as they remedy impacts of blight on commercial premises, they are closely

limited to business occupiers, not investment owners, and not only that, to business

occupiers who are effectively small business occupiers, there is a rateable value limit on

the premises in question to make sure that they are focused on that, and if you were to

accede to the suggestion that we should have these petitioners, as investment owners,

should be able to have their capital receipt effectively in two months’ time, or something

like that, that would be the most major change in legal policy.

407. Another way of putting it finally is to say this: if this was being promoted under an

existing statutory extent regime, under the Planning Act as a major infrastructure

project, or under the Transport and Works Act, the issue simply wouldn’t arise. There

would be no power under the current public legislation that relates to this to enable them

to secure early acquisition of their interest. And so they’re asking this Committee to do

something that is about as far away from a self contained action as you could possibly

go and I would respectfully invite the Committee to look at that extremely cautiously.

408. Quite distinct from whether we should take them at all, but this is about the timing

of acquisition. That’s all I want to say.

409. CHAIR: Okay. Thank you very much, Mr Mould.

410. MR VILLAGE QC: Sir, can I suggest this way forward. We’re waiting to hear

from the promoter in relation to one of the undertakings which I identified; it was

undertaking number 7 in relation to Unit One, Dorset Road. In light of the facts that the

58

promoter has unusually decided not to call any evidence that can be questioned by us

and the Committee won’t have the benefit of our cross-examination of the witnesses for

the promoter, may I suggest that the appropriate approach is for us to come back; I can

then address the Committee in the light of the answer given by the –

411. CHAIR: Are you talking about coming back at two o’clock?

412. MR VILLAGE QC: Coming back at two o’clock.

413. CHAIR: That would be fine, Mr Village.

414. MR VILLAGE: Thank you very much.

415. MR BELLINGHAM: Chairman, very briefly. Mr Village, I noticed when Mr

Mould was making those comments on the existing law, the planning law, you

expressed some interest. Is there any comment to make on that?

416. MR VILLAGE QC: I have to say it was the greatest erection of an edifice to

knock down that I’ve ever heard in probably my time at the bar. I mean I don’t know

where he’s got this from and it’s fantastic that even Mr Mould, with all his undoubted

ability can erect such a huge edifice and spend so much time knocking it down. I was

going to say that at two o’clock. I’ve at least made one of my submissions now.

417. MR MOULD QC (DfT): It’s the greatest edifice that I’ve erected since the last

time that we were against each other.

418. CHAIR: Order, order. We’ll be back at two o’clock. Thank you very much.

close 11.22