Transport secretary Patrick McLoughlin has admitted that he does not have a clear idea how much Network Rail’s enhancement programme is running over budget.
McLoughlin last month suspended major rail projects in the North and Midlands to focus Network Rail on the work to electrify the Great Western Main Line. He also appointed former Transport for London commissioner Peter Hendy as Network Rail chairman.
But the minister told MPs on the Transport Committee today that the figures he based his intervention on were “unreliable”.
“There was a concern about the cost and the progress that was being made on the Great Western electrification,” said McLoughlin.
“If we go back to September 2014, I was told that over Network Rail’s £12bn enhancement programme, there was an overrun of £2bn.”
However, McLoughlin said it was hoped at this stage that this overrun could come down to £200M.
“Bearing in mind that Reading Station is under budget, Nottingham station is under budget, I was content the work should be done,” he said.
“Figures coming to me a few weeks ago showed a substantial increase. I’m not in a position to give that figure as it’s an unreliable figure but it showed an increase between two varying points.
“They are not accurate figures but showed a substantial increase in cost. On the basis of that I asked Peter Hendy to become chairman of Network Rail.”
McLoughlin said that he hoped to receive a detailed report on the enhancements programme from Hendy by October.
Regulator the Office of Rail and Road last month announced an investigation after Network Rail failed to hit 30 of 84 enhancement milestones in 2014-15, the first of five years of its £38.5bn CP5 programme.
It was later announced that Network Rail’s top bosses would not receive bonuses for last financial year.
But McLoughlin told MPs today that morale at the infrastructure body should be “very good indeed” as so much money was being invested in the railway.