Unacceptable cost increases and delays on pilot tram-train project

15 December 2017

The Public Accounts Committee report says the failings echo modernisation of Great Western line; concerns remain over benefits and lessons for future.

Works encountered unacceptable cost increases and delays

The Sheffield to Rotherham tram-train scheme will see vehicles run across the local tramway and the national rail network for the first time in the UK.

In May 2012, the Department for Transport (the Department) approved a pilot project to test the costs and operational issues of this new technology, and consider the potential to roll-out similar schemes across other cities in the UK.

However, Network Rail's works to modify the national rail network have encountered unacceptable cost increases and delays. It seriously under-estimated the scale and complexity of the works, and failed to factor-in the risks involved in delivering new technology.

These are the same failings that we saw in the Department's handling of the Great Western Railway modernisation programme.

Costs rose from £15 million to £75.1 million

The Department failed to scrutinise or challenge Network Rail's plans at the outset and then did not challenge hard enough as Network Rail's costs rose from an initial budget of £15 million to £75.1 million.

Neither the Department nor Network Rail have properly quantified the benefits expected from the project, so decisions to go ahead and continue were made without knowing if it provides taxpayers with value for money.

Not enough done to learn lessons from project

Whilst Network Rail now has a revised plan to complete the works, albeit two-and-half years behind schedule, we are concerned that the project will not achieve the wider benefits that were originally intended.

Network Rail and the Department have not yet done enough to learn the lessons from the pilot project, including whether the technology is useable elsewhere and calculating the likely costs of developing new tram-train schemes.

There are wider lessons from this project for how the Department and Network Rail plan wider projects.

Chair's comment

Comment from the Committee Chair, Meg Hillier MP:

"This project promised great benefits for passengers and, importantly, a potential model for similar schemes in cities such as Manchester, Cardiff and Glasgow.
Instead the reality is another rail project with all the makings of a 'how not to' seminar for senior civil servants.
This pilot was trialling technology new to the UK, yet neither Network Rail nor the Department for Transport properly considered the high level of risk and uncertainty.
Unrealistic costings went unchallenged, resulting in an initial budget of £15 million spiralling to some £75 million. There have been long delays, and it is still not clear how, or even if, the experience of running this pilot will reduce the costs and improve delivery of any future tram-train schemes.
Not for the first time, we heard evidence intended to reassure Parliament and the public that lessons learned on this project will ensure the failings identified will not arise again.
We will be expecting Government to back this up with a meaningful review of the way it manages such projects, from calculating cost estimates through to transparently evaluating results.
Actions speak louder than words and on behalf of taxpayers we will, if necessary, recall witnesses responsible for current and future projects and hold them to account for their performance."

Further information

Image: Mikey (Creative Commons)