Thursday, 18 December 2014

CP5 cost crunch reinforces HS2 case

Concerns about the cost and complexity of the Great Western Route Modernisation echo the problems of the incremental upgrading on the WCML. Photo: A Benton
In July 2011, then Transport Secretary Philip Hammond went to London’s Paddington station to formally launch the start of a £5bn programme to modernise the Great Western Main Line, including electrification, remodelling of the bottleneck at Reading and resignalling with the latest ETCS in-cab train control equipment.

But by the middle of last summer, train operator First Great Western was running a high-profile advertising campaign, adorned with images of Isambard Kingdom Brunel, which touted a ‘massive’ £7.5bn investment by Network Rail in the route. Yet when newly-appointed NR Chief Executive Mark Carne spoke to parliament's Transport Select Committee on June 9 last year, he was forced to admit that he ‘did not have a fully-defined cost’ for the investment programme.

Some details of the problems are starting to emerge, and it is already apparent that other enhancements to the conventional rail network are also imperilled by a spiralling cost control issue. According to reports last August by The Sunday Times newspaper and industry newsletter Rail Business Intelligence, the cost of electrifying (some of) the Great Western Main Line has already grown from £1bn at the outset to £1.5bn as detailed design work has proceeded. Industry insiders suggest that other wiring schemes, covering the trans-Pennine and Midland Main Line routes, could be similarly affected.

This salutary tale ought already to bring back memories of Railtrack’s ill-starred efforts to modernise the West Coast Main Line from 1998 onwards at a supposed cost of £1.4bn. The out-turn cost was more than £9bn by the time of the project’s formal completion, but another £1bn has been spent subsequently on improving the resilience of the route. For the avoidance of doubt, NR is doing and will continue to do a vastly better job of managing Britain’s rail infrastructure than Railtrack ever did. But there is equally no doubt that that the cost and complexity of upgrading legacy railways to deliver more capacity is continually and routinely downplayed.

It is remarkable that the GW programme’s budgetary transition from £5bn to £7.5bn to ‘unknown’ in just three years appears to have been somewhat blithely overlooked. Claims that there are a plethora of ‘cheaper and easier’ alternatives to the High Speed 2 project remain common currency, despite the emphatic passage of the HS2 Phase I hybrid bill through its second reading in parliament earlier this year. In reality, the overwhelming body of evidence is that the true ‘blank cheque’ rail projects are those ‘patch and mend’ options which this blog has always insisted are unsuitable for the busiest rail arteries.

The limitations of the incremental upgrading are especially acute where there is need to deliver real-terms increases in capacity. Despite the now familiar wrangling about load factors (the relevance of which has been dented by the metric being ignored in Sir Howard Davies' aviation capacity reports), this in practice almost always means more train paths, whether for passenger or freight. It cannot be right that this is achieved overwhelmingly by ‘robbing Peter to pay Paul’. On the upgraded WCML for example, paths are so scarce that an engineering-led scheme to raise the maximum speed of commuter trains to 110 mile/h was required to flight an extra train per hour to and from London Euston between Virgin Pendolinos. And to that extent, it worked. But the unintended consequence was to deprive Watford of the direct services to northwest England which it had enjoyed throughout the 20th Century. Whatever advantages this confers, improving non-London connectivity is clearly not one of them.

On the Great Western meanwhile, whatever improvements are made to the main line to Bristol and south Wales (note that the ‘Berks & Hants’ line route to Devon and Cornwall gets only a stub-ended electrification and almost no capacity or speed enhancements, which is a story in itself), there is a crux looming at the London end, as longer-distance traffic vies for capacity with intensive Crossrail suburban trains between Reading and London. Only a fool would bet against more messy capacity compromises, which is understandable since significant net gains in paths on the busiest sections of the route are simply not deliverable, despite the scale of the enhancement works.

All of which leads to fairly obvious conclusion. First, that the challenges faced during the ill-starred West Coast upgrading were not, as some HS2 critics claimed, an aberration. Stories of shifting specifications and engineers ‘not finding what they expected on the ground’ continue to swirl around the Great Western and other projects where major capacity enhancement is expected from an existing corridor. Second, with the GWML project in all its various elements now likely to reach a capital outlay comparable to WCRM, how can anyone rationally believe that replacing HS2 with a further plethora of ‘incremental’ upgrades represents fiscal prudence? With HS2 providing guaranteed capacity relief to at least four main line corridors, the implications of Network Rail being tasked with the same job are daunting. With NR’s debt now officially on the government’s books, the long-term cost of backing politically-expedient ‘patch and mend’ projects has just gone up a bit more.

With a general election looming, some observers are already stretching credulity by calling for HS2 to be halted. It is already clear that this would be rank bad policy.