Fact Sheet 6 - Road versus rail -
Cost escalation for railway projects in the UK
- At privatization in 1994 the British Rail forecast for
track maintenance beyond 2001 was £774 million per
year (source, page 11 of the prospectus issued in advance
of sale). At 1999 prices that amounts to £0.888 billion.
- In contrast the network management statement for the
years 1996/7 and 2000 provide an annual average for the
10 years 1995/6 to 2005/6 at 1999 prices of £2 billion
per year. The 2001 network statement provides an average
of nearly £3 billion per year at the 2001/02 price
base for the five years 2001/2 to 2005/6. Thereafter the
cost is forecast to taper off to £2.2 billion in 2010/11.The
increase from £0.888 bn to nearly 3 billion, a factor
of over 3 is typical of the appalling record the rail industry
has for estimating its costs. Other illustrations follow
at 3, 4 and 5 below.
- The West Coast Main Line Modernisation Programme was
to cost £2.35 billion in 1997, £2.95 billion
in March 1999, £4.75 billion in October 1999, £5.56
billion in January 2000 and £5.8 billion at the start
of the Public Inquiry in February 2001. (Source is the Overview
Paper produced in May 2000 and a report to the Rail Regulator
by Booz-Allen and Hamilton dated June 2000). The price rose
to £6.3 billion during the inquiry when there were
press reports that it would cost £9 billion. By August
2002 the press was reporting £13 billion, but that
has now been cut to £10 billion after the Regulator
struck out enhancements otherwise required for the originally
proposed 150 mph speeds.
- An old cost for the Train Protection System is £1
billion but that rose to £6 billion according to the
press but the number is now quoted as £3.8 billion.
- Meanwhile the overall cost of Railtrack's nation-wide
Modernisation Programme has risen from £50 billion
through £60 billion to a projected £73 billion
- Sufficient to build the residential accommodation for
a city of 1.5 million people.
The original cost estimates misled the Government and shareholders
into commitments which may never have been considered if the
actual costs had been available. Possibly these massive cost
failures are deliberate. In any case they are mirrored by
equally massive misrepresentations to do with capacity, safety
and other issues, see other facts sheets.
August 2002
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