DfT should have challenged “wholly unrealistic” cost estimates from Network Rail on the Sheffield tram-train project, say MPs.
THE Department for Transport should have challenged “wholly unrealistic” cost estimates from Network Rail on the Sheffield tram-train project, the House of Commons Public Accounts Committee says in its report into the scheme.
When the project was approved in May 2012, the cost estimate was £18.7 million, although project design had not been completed. The latest estimates are £75.1m - an increase of 401% against the original budget.
The PAC says NR “must improve its ability to produce realistic cost estimates and ensure they make appropriate allowances for risk and uncertainty”.
It also says the DfT should properly scrutinise cost estimates, and wants both to write to explain to the committee by March 2018 how new processes have improved the way they work.
The report, published on December 15, also says that the DfT allowed the project to continue despite rising costs and without reassessing whether the project would provide good value for money, or understanding whether it would achieve its wider strategic goals. It recommends the DfT should put in place clear evaluation plans at the start of future pilot projects and reassess the business case should there be “significant cost increases and delays”.
The third conclusion is that neither the DfT nor NR know how much taxpayers’ money has been “wasted” on future-proofing the electrification for future use at 25kV AC. The project to electrify the Midland Main Line north of Kettering has been cancelled, and the PAC wants the DfT and NR to undertake a full review of the cost of this project to establish how much money was spent on the aborted future-proofing works and provide the committee with a full breakdown of those costs by the end of January 2018.
Neither party, says the PAC, has evaluated how the lessons learned during the tram-train pilot project could be applied to reduce the costs of future schemes, and it wants them to explain their assessment of the potential cost savings to future projects and what they calculate is an “efficient price” of building a tram-train system.
It also wants the DfT to publish its formal evaluations of the project, including a full assessment of the project as a whole rather than just the NR elements.
PAC Chairman Meg Hillier said: “This project promised great benefits for passengers and, importantly, a potential model for similar schemes in cities such as Manchester, Cardiff and Glasgow. Instead, the reality is another rail project with all the makings of a ‘how not to’ seminar for senior civil servants.
“Unrealistic costings went unchallenged, resulting in an initial budget of £15m spiralling to some £75m. There have been long delays, and it is still not clear how (or even if) the experience of running this pilot will reduce the costs and improve delivery of any future tram-train schemes.”