30th PAC Report 2006-07
The modernisation of the West Coast Main Line
Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:
“The programme to modernise the West Coast Main Line was collapsing under the weight of its own ambition until the Strategic Rail Authority stepped in. Together the SRA and Network Rail turned the programme around. Passenger numbers are up, journey times are down and trains are more likely to run on time.
“But the public are having to stump up a lot of money. Network Rail expects to overspend its allocation for the programme by £300 million. The total projected cost of the upgrade has now hit £8.6 billion, an increase of £6 billion since the original estimate. Network Rail has improved control over costs but there is ample room for improvement: for instance, by benchmarking costs for track renewals and signalling work in order to able to challenge contractors’ prices better.
“It is not as if spending on such a heroic scale is the end of the story. Demand for the services on the West Coast Main Line has grown more quickly than expected and some parts of the route are already at or near capacity. It is extraordinary that in only eight years time the line once again may not be able to meet demand.
“The Department for Transport and the Office of Rail Regulation must explore with Network Rail and the Train Operating Companies every measure they can to enable greater use of the existing tracks, increase train capacity and minimise disruption to services from work on the track and signalling. There must be no suggestion that, following the expenditure of billions of pounds on the line, railway passengers should simply have to resign themselves to the stress and inconvenience of chronic overcrowding.”
Mr Leigh was speaking as the Committee published its 30th Report of this Session which examined the steps taken by Network Rail, the Department for Transport (the Department), and the Office of Rail Regulation to drive down costs, deliver service improvements, and learn lessons for other major projects.
By the 1990s, the busy West Coast Main Line route to the North West and Glasgow comprised aging infrastructure and an increasingly unreliable service, and required substantial investment to reduce journey times and improve service frequency and capacity. In 1998, two private sector companies, Railtrack (infrastructure owners) and Virgin Rail Group (Virgin West Coast Trains held the franchise to operate long distance passenger services), agreed to upgrade the line with funding from Railtrack’s borrowings. As part of the deal, Virgin West Coast undertook to procure new tilting trains capable of running at 140 miles per hour.
The original aim to upgrade the line in two phases, in 2002 and 2005, using untried signalling technology, proved overly ambitious and the programme quickly ran into difficulty. Railtrack’s estimates of cost increased rapidly, the new signalling technology was not installed, and progress was slower than anticipated. These factors contributed to a financial crisis for Railtrack which went into railway administration in October 2001. In early 2002, the Strategic Rail Authority intervened to take the West Coast Main Line programme forward. Network Rail took over from Railtrack-in-Administration in October 2002, strengthening project management and putting in place a robust strategy to deliver the upgrade in three phases, between 2004 and 2008.
By early 2007, Network Rail had delivered the project’s first two phases to schedule resulting in improved punctuality, shorter journey times and some improvements in service frequency and train speed. The final phase of the project will increase capacity further from 2008. Modernisation is likely to cost around £8.6 billion, £6 billion more than forecast in 1998. Network Rail has improved control over costs but expects to spend £300 million more than the £3 billion allocated by the Rail Regulator, for the period 2004-08. The line is still prone to overcrowding on peak services and is likely to require further investment to accommodate predicted future growth in passenger numbers. Unit costs for track renewal on the project have reduced from 60% higher than the network average, but are still 14% higher than elsewhere on the network. Network Rail needs more robust negotiation with and management of contractors to drive down costs further. Passengers face the prospect of further disruption to scheduled weekend services for maintenance of the upgraded line. Discounted fares are available at stations, but they are not advertised as clearly at stations as they are on the internet. Passengers without web access may not benefit and with growing capacity problems there is a risk of developing an elite train service with too few seats and high fares. The Department has not monitored whether promised environmental benefits have been delivered.
Notes for Editors
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