Tram-train costs

Rail (UK) - - Con­tents - An­drew Ro­den rail@bauer­me­ @AndyRo­den1

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.”

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