Great Western Disaster

We reported in detail last year on the problems with the contract to electrify the line from London to Bristol and the impact this would have for fast trains coming on down to Somerset. Today the House of Commons Public Accounts Committee published a report which pretty much vindicated everything we said in our article.

We have published the full text of the summary of the report below  so you can see exactly what they ahd to say:


We reported in November 2015 on the staggering and unacceptable increase in the estimated costs of the Great Western Main Line electrification programme which rose by £1.2 billion in the space of a year. The extent of the serious failings in the Department for Transport’s (the Department’s) and Network Rail’s management of the Great Western modernisation programme which led to these cost overruns and a delay to completion of up to three years are now clearer. Both the Department and Network Rail accept that there were significant failings in the design, planning and cost-estimating of the programme. The case for electrification and new trains were seen as two linked programmes, rather than being managed as a whole and the accountability arrangements put in place were overly complex and failed to provide the assurance the Department needed to be an effective client of Network Rail. The serious management failings evident in this programme raise concerns about the Department and Network Rail’s ability to manage similar projects in the future, such as the planned electrification schemes on Midland Main Line and TransPennine routes. The Department’s claim that many of the passenger benefits of electrification can be obtained without electrifying the whole route raises questions about whether full electrification is the most appropriate way to achieve benefits for passengers, and value for money for taxpayers. But whilst the Department is taking this optimistic view this cannot detract from the £330m additional costs that the delays to electrification will incur.


Conclusions and recommendations

1.It is not clear whether the Great Western electrification project can be delivered to the revised target of December 2018 and budget of £2.8 billion. The estimated cost of electrification increased by £1.2 billion to £2.8 billion by the end of 2015 following Network Rail’s replanning of the project, which also identified delays to parts of the project of 18 to 36 months. The Department and Network Rail are confident that the project is now on track as important milestones have been met. But Network Rail admitted that there are still “very significant risks” to be managed and noted that “every single part of the programme is absolutely on the limit”.1 The most recent risk analysis indicates a financial exposure of £274 million, £49 million more than the £225 million of contingency currently available and risks still remain that costs could increase further.

Recommendation: Network Rail must ensure that all risks to the project are identified, monitored and controlled and use this information to identify with the Department the critical path for the whole modernisation programme, setting out how the infrastructure, new trains and planned services will interact with each other by March 2017.


2.Network Rail failed to plan the infrastructure work properly. Network Rail admits that the early stages of the project were not carried out in an appropriate way. The initial design was incomplete. The cost estimating was not good enough and it started construction before it had the necessary permits and consents in order to try to meet the schedule. Network Rail’s failure to put in place an adequate plan to obtain the more than 1,800 separate consents it needed from local authorities, such as permission for works that could affect protected species or listed buildings, led to higher costs. Network Rail could not explain why it had not sought to avoid these problems by obtaining an Order under the Transport and Works Act enabling the Secretary of State to have granted planning permission for the whole scheme.

Recommendation: Network Rail must improve its ability to produce realistic cost estimates, including making greater use of data from completed projects. Network Rail must make sure that robust and detailed plans, including a critical path, are in place for infrastructure projects before starting construction works and consider whether an Order under the Transport and Works Act would be preferable to multiple individual planning consents and other approvals.


3.The Department failed to challenge Network Rail’s plans effectively despite the very significant sums of public money at risk. Depite being liable to pay £400,000 per day to lease new trains that could not be used until the overhead electrification was complete, the Department did not adequately challenge Network Rail’s plans to carry out the infrastructure work. Instead, it left the role of scrutinising Network Rail’s plans to ensure they were both deliverable and the most efficient way of carrying out the work to the Office of Rail and Road. The Department accepts that this system was too complex, “much weaker and less reliable than [it] thought”, though it believes that it has since put in place a “very clear structure of accountability”.

Recommendation: The Department must ensure that it has obtained suitable assurance over cost and deliverability before taking decisions on infrastructure investment and other major decisions which depend on infrastructure being available. It must set out how it will continue to develop its own programme management expertise, and how it will use this to monitor Network Rail’s delivery.


4.The Department failed to integrate all the elements needed to deliver benefits for passengers successfully at the planning stage, and did not manage the programme in a joined-up way. Until 2015, the Department managed the different elements as separate but related projects, rather than as one single integrated project, even though improving services for passengers required all the elements to be completed on time. The Department should have had an integrated business case for the programme sooner than March 2015, bringing together the new infrastructure, new trains and service patterns. This would have allowed the Department to manage the interdependencies between the elements and the risks the programme faced. The Department built an 18-month buffer into the programme to allow for the infrastructure to be ready for new trains in advance but this was not based on the actual risks facing the programme. The Department’s new approach to infrastructure planning involves it specifying outputs and Network Rail providing options to meet them. These options will be reviewed by the Department, who will then make a decision based on costs, benefits and risks to delivery. The Department is also trying to align decisions about infrastructure improvements with franchise timetables, such as future improvements to the Midland Main Line. We are concerned that serious failings in planning and delivering this programme will affect the case for future investment in rail programmes.

Recommendation: The Department and Network Rail need to ensure that they plan major developments to rail services in a way which brings together trains, infrastructure work and the operation of services. As part of this, they should obtain independent assurance on the deliverability of their plans. We will expect to see this approach on forthcoming major programmes including the Midland Main Line and TransPennine upgrades.


5.The Department’s claim that nearly all the benefits for passengers can be achieved without full electrification of the route casts doubt on the value for money of this and other electrification schemes. The Department maintains that the decision to defer the electrification of sections of the route will have “little, if any, impact on the benefits of this programme to passengers” as many of the benefits, including more trains per hour, journey time savings and more seats, do not depend on electrification. The Department also considers that wider benefits, such as reduced operating costs and environmental benefits, will only be marginally impacted by the decision. However, the planned reallocation of diesel trains to increase capacity elsewhere on the network will be delayed. Some £130 million has been spent on infrastructure work to deliver electrification on the deferred sections, although Network Rail maintain that these costs will largely be recovered should electrification go ahead.

Recommendation: The Department needs to reassess the case for electrification on a section by section basis and fund schemes only where worthwhile benefits for passengers could not be achieved otherwise at lower cost. In its new business case for the Great Western programme, which it expects to complete by the end of March 2017, it should reassess the extent of electrification, and it should also look again at its plans for the Midland Main Line and TransPennine routes.


Leave a Reply