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Costly rail capacity improvements will fall short, says National Audit Office

Costly rail capacity improvements could fail to deliver on earlier promises, according to a report by the National Audit Office (NAO).

Increasing Passenger Rail Capacity, published today, said that rising costs coupled with falling passenger numbers had put a question mark on the value of scheduled capacity improvements for the period 2009 to 2014.

The report said that the £9bn of improvements scheduled would result in less capacity than the Department for Transport(DfT) earlier predicted. Now just 99,000 extra passengers will be expected into London in the morning peak – 15% fewer than originally envisaged – with only 25,500 extra passengers likely to enter other English cities – 33% fewer than predicted.

The report said that the recession and rising costs of rolling stock were to blame for the shift.

However, it also raised concerns that it was unclear whether Network Rail was delivering value for money on the programme. It is set to receive £7bn from the total £9bn but the NAO said it was concerned that the Office of Rail Regulation’s ability to assess the rail infrastructure operator and owner was limited by the lack of information available for its costings.

“Network Rail has incentives to become more efficient, for example, it can keep 25% of underspends to use in the future and it must absorb the first £50M of overspend on infrastructure enhancement projects (including capacity enhancements),” said the NAO. “For these incentives to work effectively they must be based on realistic and challenging estimates of costs, but the level of detail available is not always enough to judge these.”

Transport secretary Philip Hammond is now understood to have issued a pledge to investigate the need for rolling stock. The DfT strategy included providsion for an extra 1,300 carriages - 526 of which have already been bought with another 106 ordered to be introduced by 2012.

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