NAO slams Great Western fiasco

A report from the National Audit Office, says that the cost of modernising the Great Western railway has risen by 60% in the past three years and there are delays to the electrification of the route of at least 18 to 36 months.

The project cost is currently estimated to be £5.58bn, an increase of £2.1bn since 2013.

Delays to the electrification programme will cost the Department for Transport (DfT) up to £330m. These cost increases and recent changes to the new trains order mean that the value for money of the programme needs to be reassessed, and the extent of electrification reconsidered.

The NAO report says that until 2015, the DfT did not plan and manage all the projects which now make up the Great Western Route Modernisation programme in a sufficiently joined up way. It did not produce a business case bringing together all elements of the programme until March 2015, more than two years after ordering the trains and over a year after Network Rail began work to electrify the route. When the DfT entered into a contract to buy the Intercity Express Trains, creating fixed deadlines for electrification, the infrastructure planning work was still at a very early stage of development. This is illustrated by the fact that Network Rail had only just identified that it would need to develop a new type of electrification equipment. “The electrification timetable was not based on a bottom-up understanding of what the works would involve,” the report says.

“The modernisation of the route has potential to deliver significant benefits for passengers but this is a case study in how not to manage a major programme,” said Amyas Morse, head of the National Audit Office. “The department's failure to plan and manage all the projects which now make up the Great Western Route Modernisation industry programme in a sufficiently joined up way, combined with weaknesses in Network Rail's management of the infrastructure programme, has led to additional costs for the taxpayer. It is encouraging that since 2015 the Department and Network Rail have a better grip and put in place structures to manage the programme in an integrated way. However significant challenges to the timetable still remain and there is more to do to achieve value for money.”

In 2015 Network Rail re-planned the infrastructure programme after it became clear that costs were increasing and the schedule could not be met. Electrification between Maidenhead and Cardiff is now expected to cost £2.8bn, an increase of £1.2bn (70%) against the estimated cost of the programme in 2014.

The NAO says that Network Rail’s 2014 cost estimate was unrealistic. “It was too optimistic about the productivity of new technology. It underestimated how many bridges it would need to rebuild or modify and also the time and therefore costs needed to obtain planning permission and other consents for some works. Failings in Network Rail’s approach to planning and delivering the infrastructure programme further increased costs. It did not work out a ‘critical path’ – the minimum feasible schedule for the work, including dependencies between key stages – before starting to deliver electrification. It also did not conduct sufficiently detailed surveys of the locations for the structures, which meant that some design work had to be repeated.”

Earlier this week the government announced that it was deferring four electrification projects that are part of the programme of work along the Great Western route, saving between £146m and £165m. The deferred projects are:

• electrification between Oxford and Didcot Parkway
• electrification of Filton Bank (Bristol Parkway to Bristol Temple Meads)
• electrification west of Thingley Junction (Bath Spa to Bristol Temple Meads)
• electrification of Thames Valley Branches (Henley & Windsor).

The full NAO report, Modernising the Great Western railway, is available at www.nao.org.uk

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