Home Infrastructure Rising cost of electrification schemes behind cancellation, report confirms

Rising cost of electrification schemes behind cancellation, report confirms

Rising costs and Network Rail’s reclassification as a public body were the main factors behind the cancellation of three rail electrification schemes last year, a report by the public spending watchdog has confirmed.

The National Audit Office (NAO) has published a report into its investigation of the government’s decision to cancel three major electrification projects in July last year.

The Department for Transport (DfT) initially identified 23 projects which could be cancelled or deferred to save money. It then ranked the projects based on potential savings, value for money, reputational damage and the impact cancellation would have on passengers and the supply chain.

Transport secretary Chris Grayling chose to cancel schemes to electrify the Great Western main line between Cardiff and Swansea, the Midland main line north of Kettering to Sheffield and the Oxenholme to Windermere line in the Lake District.

The announcement was met with heavy criticism, but Grayling defended the decision, claiming that electrification was no longer necessary and that bi-mode or alternative fuel trains could deliver the same passenger benefits without the disruption.

The NAO concluded it was the combination of rising costs and Network Rail’s funding constraints that ultimately led to the decision to drop the projects.

Cancelling the three projects is estimated to have saved up to £105 million in CP5 and a further £1.4 billion in CP6 (2019-2024).

The report suggests that it is too early to determine whether it is possible to deliver the benefits of electrification without electrifying the lines, but it did point out some of the disadvantages of using bi-mode trains instead of electric units, including increased track wear and higher energy costs.

The NAO said it was uncertain how much the new trains will cost but that the Secretary of State has suggested that it will be cheaper than pursuing electrification.

Darren Caplan, chief executive of the Railway Industry Association (RIA) said: “The National Audit Office’s (NAO) report today has confirmed that the cost of electrification was the main reason for the government’s decision in July 2017 to cancel a number of proposed schemes.

“The Railway Industry Association understand why this decision was made, but believes that electrification remains the best option for intensely used railways, due to its environmental benefits, improvement to journey times, and reduction in track wear. It is therefore vital that the government continues to keep electrification on the table when considering  future rail improvements.

“Nevertheless, the industry understands that we must work to see how costs can be reduced. RIA is currently running an Electrification Cost Challenge process, which seeks to do just that by bringing together relevant industry stakeholders and suppliers to look systematically at the cost of electrification and how it can be reduced.

“We hope that our report, due to be published later this year, will help open the door for future electrification schemes by showing how they could be delivered more cost efficiently and effectively.”

The DfT said the report highlighted its commitment to delivering improvements to services without carrying out disruptive engineering works.

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