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Thu April 15 2021

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Network Rail ‘has lost its grip’ say MPs

20 Nov 15 A committee of MPs has demanded a revised programme of rail electrification improvements from Network Rail, with tighter project planning, costing and cost control throughout the organisation.

The House of Commons Public Accounts Committee (PAC) has published the results of its inquiry into Network Rail's 2014-2019 investment programme and highlighted severe planning and budgeting failures.

It was “an unrealistic programme”, the MPs said.

In particular it points to "staggering and unacceptable" cost increases in the project to electrify the Great Western Main Line from London to Cardiff, which is now expected to cost up to £1.2bn more than the £1.6bn estimated a year ago.

The Committee says there is still "far too much uncertainty" on costs and eventual delivery dates for the electrification of both the TransPennine route and the Midland Main Line – and warns more projects could be delayed in order to balance Network Rail’s budget.

In light of its findings, the Committee calls for a fundamental review of the regulator’s role and effectiveness in planning rail infrastructure.

It also urges the government to publish a revised and re-costed programme of electrification improvements, including the rationale for prioritising different schemes, following a review by Network Rail chairman Sir Peter Hendy.

In October 2013 the Department for Transport, Network Rail and the ORR agreed a £38.3bn rail spending programme covering the period from April 2014 to March 2019.

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The MPs say: “The programme contained too much uncertainty around the costs of many large projects when it was signed off. Since then Network Rail’s work has cost more and taken longer than expected. We are concerned that the ORR, Network Rail’s regulator, lacks the capability to robustly scrutinise Network Rail’s plans and cost estimates.”

PAC chair Meg Hillier MP said: "Network Rail has lost its grip on managing large infrastructure projects. The result is a twofold 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 Main Line.

“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 judgement should be so flawed.

“Our inquiry has found that the agreed work could never have been delivered within the agreed budget and timeframe. 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."

The full report, Network Rail's 2014-2019 investment programme, is available on the Parliament website.

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