MPs condemn 'staggering' rail electrification cost increases


MPs have raised severe concerns about rail investment in the UK and called for a "fundamental review" of the industry's regulator.

The House of Commons Public Accounts Committee (PAC) described cost increases on Network Rail's (NR) electrification of the Great Western railway line between London and south Wales as "staggering and unacceptable".

It also found there is "far too much uncertainty" over costs and delivery dates for electrification of the Midland Mainline from Sheffield to Bedford and the TransPennine line between Manchester and York.

The committee concluded that the 2014-19 rail investment programme "could not have been delivered within budget", and claimed the use of five-year funding cycles is "not adequate" for major projects.

Its report found the Office of Rail and Road's (ORR) scrutiny of costs was "unconvincing" and urged the Department for Transport (DfT) to assess its future.

"The department should carry out a fundamental review of the regulator's role and effectiveness in rail infrastructure planning," the PAC stated.

Ministers were accused of deceiving the public when the overhaul of the Midland Mainline and the TransPennine routes were put on hold just weeks after the general election.

Transport Secretary Patrick McLoughlin went on to order the work to resume following a review by NR chairman Sir Peter Hendy.

MPs were told last month that the cost of Great Western electrification could rise to £2.8 billion despite an estimate of £1.6 billion being given just 12 months earlier.

PAC chair Meg Hillier said: "Network Rail has lost its grip on managing large infrastructure projects. The result is a two-fold blow to taxpayers: delays in the delivery of promised improvements, and a vastly bigger bill for delivering them.

"The potential near-doubling in cost of the electrification of the Great Western line is a symptom of seriously flawed control and planning. Another is the continuing uncertainty over electrification of both the TransPennine route and the Midland Mainline.

"The Government has identified rail infrastructure as a vital part of its economic plans, for example in establishing what it describes as a Northern Powerhouse. It is alarming that in planning work intended to support these plans, its judgment should be so flawed.

"Our inquiry has found that the agreed work could never have been delivered within the agreed budget and time frame. Yet Network Rail, the Department for Transport and the regulator - the Office of Rail and Road - signed up to the plans anyway.

"Passengers and the public are paying a heavy price and we must question whether the ORR is fit for purpose."

NR accepted that its understanding how to plan and deliver major electrification schemes "was not good".

A spokesman said significant changes have been made which mean schemes now only progress once "a reliable cost estimate can be established".

The ORR issued a statement in which it welcomed the report and accepted that escalating costs and late delivery of rail projects "are unacceptable".

The regulator added that a review of its own role in infrastructure work was "appropriate" following last year's reclassification of Network Rail as a public sector body.

A DfT spokesman said: "We are proud to have a hugely ambitious investment programme, but agree that lessons should be learned on all sides.

"We are committed to seeing the £38 billion programme through and delivering the railway passengers deserve."

He added: "We will respond to the PAC in due course."