Rail costs crisis was known 16 months ago

TRANSPORT chiefs were first warned of the spiralling costs on improvements to Scotland’s railway projects 16 months ago, The Sunday Post can reveal.

A new review has revealed Transport Scotland was told in June 2015 that electrification of lines at Shotts was set to double in cost from £80 million to £160 million.

The report by consultancy firm EY also showed that a hike in the cost of Aberdeen to Inverness improvements, from £170m to £281m, was reported to the transport quango on March 31 this year – five weeks before the Holyrood election.

But Transport Scotland said it only told ministers of the delays and cost hikes at the end of May.

The news comes days after it was revealed the estimated cost of Scotland’s five big rail schemes had soared by £379m to £1.51 billion.

And the revelation comes in the week that the failings of ScotRail have dominated the political agenda – and in which the underfire train operator was fined £483,000 for failing to meet strict standards on providing services.

The Sunday Post last month revealed delays on the Edinburgh to Glasgow route were partly because overhead wires had been put up at the wrong height to comply with safety laws and the EY report confirmed a “failure to design to regulatory requirements” on the project.

The report also exposed poor management by Network Rail, which is responsible for building the projects, including sections of progress reports seemingly copied from one month to the next.

Transport Scotland last night said it had rejected Network Rail’s estimated cost rises and put them back under review.

But Scottish Labour transport spokesman Neil Bibby said: “The report makes it clear the SNP government knew about soaring costs on the Aberdeen to Inverness line back in March, and Shotts for more than a year, before telling the public.

“Passengers will now be asking if they kept it quiet before the election to avoid embarrassment.”

The EY report said the fact Transport Scotland had rejected the majority of the increased cost projections put forward by Network Rail “casts further doubt on the funding position of these projects” and whether the quango would “allow these projects to be completed”.

The EY probe also revealed the Aberdeen to Inverness delivery date had slipped from April to September 2019.

The project management skills of Network Rail come into doubt throughout the consultant’s report.

In one instance, EY spotted sections of the July report for one scheme was “word for word the same as the June report”, suggesting, “reporting’s not being completed with due care”.

A spokeswoman for Transport Scotland said it “was advised by Network Rail in June 2015 of risks that cost estimates (on Shotts) could increase from £80m to £160m but was still subject to review”.

She added: “While Transport Scotland were made aware by Network Rail of emerging cost and programme challenges on individual projects during March 2016, it was only following a period of robust challenge by Transport Scotland were Network Rail able to provide their assessment of the cost and programme pressures.

“These were not accepted by Transport Scotland.

“Scottish Ministers were made aware of the overall challenges facing the major rail projects portfolio at the end of May 2016 and instructed the independent review to get more clarity.”

Phil Verster, managing director of The ScotRail Alliance which incorporates Network Rail, last week wrote to MSPs to admit, “Network Rail’s cost estimation process was ineffective”, but added the track operator “has already taken steps to address the EY recommendations”.