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Damning report into Great Western electrification

Tunnel along the Great Western Railway

Cost rises, delays and changes to the new trains order mean the modernisation of the Great Western railway should be reassessed, according to a new report from the National Audit Office (NAO).

The damning report, called Modernising the Great Western railway, says that an increase in cost of £2.1bn since 2013 to £5.58bn, a delay to the electrification of the route of at least 18 to 36 months and recent changes to the new trains order means that the programme’s value for money needs to be reassessed and the extent of electrification should be reconsidered.

The body, which scrutinises public spending for Parliament, said that the delays to the electrification programme would cost the Department for Transport (DfT) up to £330M. 

The publication of the report comes just days after the DfT announced it was deferring four electrification projects along the Great Western rail route.

The report found that before 2015, the DfT did not plan and manage all of the projects that now make up the Great Western Route Modernisation industry programme in a “sufficiently joined up way”. It says that the DfT did not produce a business case bringing together all elements of the programme until March 2015, more than two years after ordering the trains and over a year after Network Rail began work to electrify the route.

According to the report, when the DfT entered into a contract to buy the intercity express trains, this created fixed deadlines for electrification. However, the infrastructure planning work was still at an early stage of development. This, it says, was illustrated by the fact that Network Rail had only just identified that it would need to develop a new type of electrification equipment. The electrification timetable was not based on a bottom-up understanding of what the works would involve.

The report went on to say that in 2015 Network Rail re-planned the infrastructure programme after it became clear that costs were increasing and the schedule could not be met. Electrification between Maidenhead and Cardiff was then expected to cost £2.8bn, an increase of £1.2bn (70%) against the estimated cost of the programme in 2014.

It adds that Network Rail’s 2014 cost estimate was unrealistic and too optimistic about the productivity of new technology. The report says that Network Rail underestimated how many bridges it would need to rebuild or modify, as well as the time and, therefore, costs needed to obtain planning permission and other consents for some works.

Failings in Network Rail’s approach to planning and delivering the infrastructure programme further increased costs, claims the report. The NAO said that Network Rail did not work out a “critical path” – the minimum feasible schedule for the work, including dependencies between key stages – before starting to deliver electrification. It also did not conduct sufficiently detailed surveys of the locations for the structures, which meant that some design work had to be repeated, according to the NAO.

The report says that a recent change to the new train order had also contributed to the increase in cost as the DfT intended to vary its order of intercity express trains so that they could operate under both diesel and electric power.

As a consequence, it says that the DfT would also receive less income from the Great Western franchise between September 2015 and March 2019. This, the report states, is because the train operator would bear the costs of providing extra trains and leasing depots, as well as higher running costs from operating diesel trains for longer, while also receiving less revenue from passengers than expected.

“The modernisation of the route has potential to deliver significant benefits for passengers but this is a case study in how not to manage a major programme,” said NAO head Amyas Morse.

“The Department’s [DfT] failure to plan and manage all the projects which now make up the Great Western Route Modernisation industry programme in a sufficiently joined up way, combined with weaknesses in Network Rail’s management of the infrastructure programme, has led to additional costs for the taxpayer.

“It is encouraging that since 2015 the Department and Network Rail have a better grip and put in place structures to manage the programme in an integrated way. However, significant challenges to the timetable still remain and there is more to do to achieve value for money.”

The report concludes that Network Rail had a challenging task to deliver the main benefits from the infrastructure programme, within the current schedule and budget. It adds that the schedule for electrification contained some ambitious assumptions, while the budget for the electrification programme between London and Cardiff currently had less funding available to manage risk than Network Rail believed it needs.

A Network Rail spokesperson said: “This is the biggest upgrade to the Great Western mainline since it was built 175 years ago. The National Audit Office report looks back at some of the historical concerns which were addressed in our chairman’s review in 2015.

“The project continues to be challenging and complex but we are making good progress this year and there have been great successes in recent months, including upgrading and electrifying the 130-year-old Severn Tunnel, and completing the Hinksey flood alleviation scheme, near Oxford.”

Readers' comments (1)

  • Philip Alexander

    And we're supposed to believe the cost estimate for HS2. Ho ho. There is no way that the extent of HS2 can be delivered for the laughably low estimate of £43bn. £150bn is more like it. The figure of £43bn was chosen because it suggests that it's been carefully calculated rather than anything ending in a 0 or a 5. Kevin Rudd (Aussie PM in 2007-2009) chose exactly the same number (AU $43bn) for the cost of building the National Broadband Network (NBN) when it was worked out literally on an envelope over dinner with one of his ministers. Actual cost is now estimated at over AU $75bn. So politicians are either stupid or assume "the people" are fools. Both are true. It's why we now have President Trump. Voters are fed up with being patronised and treated with disdain by regular politicians
    If the cost of HS2 was coming out of their own pockets it wouldn't get near the starting post.

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