COMMONS

Failings on Great Western upgrade raise concerns over future rail projects

03 March 2017

The Public Accounts Committee report say that the Government must learn from serious failings in the design, planning and cost-estimating of the Great Western route modernisation programme.

Concerns over management of future rail projects

In the report, the Committee warns the significant flaws identified in the project raise concerns about the ability of the Department for Transport and Network Rail to manage similar projects in future.

These include the planned electrification schemes on Midland Main Line and TransPennine routes.
 
The Committee makes a series of recommendations to Government intended to safeguard taxpayers’ money and support the timely delivery of passenger benefits on future rail schemes.

£1.2 billion increase in cost of electrification in one year

The estimated cost of the Great Western Main Line electrification programme rose by £1.2 billion in the space of a year—an increase described as "staggering and unacceptable" by the Committee.

Its new Report takes forward the Committee's examination of Network Rail's investment programme in 2015, finding the extent of failings on the Great Western project which led to cost overruns and a delay up to three years "are now clearer".

However, the Committee concludes it is still unclear whether the Great Western electrification project can be delivered to the revised target of December 2018 and budget of £2.8 billion.

Network Rail must improve "ability to produce realistic cost estimates"

Network Rail has stated "every single part of the programme is absolutely on the limit" and as a priority the Committee urges it to "ensure that all risks to the project are identified, monitored and controlled".

Network Rail must improve its ability to produce realistic cost estimates, says the Committee, and make sure that robust and detailed plans are in place for infrastructure projects before starting construction.

Assurance must be place before taking decisions on infrastructure investment

Among its other recommendations, the Committee calls on the Department to ensure suitable assurance is in place before taking decisions on infrastructure investment "and other major decisions which depend on infrastructure being available".

The Department and Network Rail must plan major developments to rail services in a way which brings together trains, infrastructure work and the operation of services, obtaining independent assurance on their plans.

The Department should also reassess the case for electrification section-by-section and fund schemes "only where worthwhile benefits for passengers could not be achieved otherwise at lower cost".

Chair's comments

Meg Hillier MP, Chair of the PAC, said today:

"Mismanagement of the Great Western programme has hit taxpayers hard and left many people angry and frustrated.

This is a stark example of how not to run a major project, from flawed planning at the earliest stage to weak accountability and what remain serious questions about the reasons for embarking on the work in the first place.

The sums of public money wasted are appalling—not least the £330 million additional costs the Department for Transport will have to pay to keep the trains running because of delays to electrification.

The Department failed to adequately challenge Network Rail's plans to carry out the infrastructure work and, even now, casts doubt on whether electrification work on this and other lines is even necessary.

Government accepts it got this project badly wrong and must now demonstrate it has learned the lessons.

Network Rail admits there are still very significant risks in the Great Western scheme and it is vital these are fully identified and carefully managed.

It must work with the Department to ensure this information is properly factored into the whole rail modernisation programme.

For its part, the Department should urgently review its plans for electrification—not just on the different sections of the Great Western route, but also on the Midland Main Line and TransPennine routes.

Electrification was heralded with the promise of benefits to passengers but the Government has a duty to determine if, in fact, these benefits can be delivered in a more timely and cost-effective way."

Report summary

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 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.

Significant failings in "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.

Questions raised about whether full electrification is most appropriate option

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.

Further information

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