Written evidence submitted by Professor Stuart Cole (CAN0019)

 

THE ARGUMENTS FOR AND AGAINST ELECTRIFICATION OF THE RAILWAYS

Rationale

The justification for major rail investment is:

•              Increases in train frequency

•              Increased capacity on trains

•              Reduced journey times

•              More modern, comfortable trains

•              Infrastructure investment at stations

 

DfT Plan as at 1 March 2011

  1. Electrification of the GWML to Cardiff and Swansea
  2. Consider electrification of the ‘core’ Valley Lines Network – Cardiff to Treherbert, Aberdare, Merthyr, Rhymney, Barry Island and Penarth.
  3. Not included was the Vale of Glamorgan line beyond Barry to Bridgend; Ebbw Vale and the Maesteg line

 

Economic Analysis applying the DfT / HM Treasury Transport Business Case to the next stages in electrification gives good Benefit / Cost Ratios

  1. ‘Core’ valley Lines network would give no net cost to government
  2. Electrification of the wider Valley Lines Metro including the Vale of Glamorgan line / GWML to Bridgend has a BCR of over 4.0:1. This exceeds many other competing schemes and compares well with HS 2 at 2.0:1 and Crossrail at 1.9:1 the latter of which is now being funded
  3. The extension of electrification from Bridgend to Swansea would then be no net cost to government

 

The reasons for no net cost to Government are:

  1. costs of operating electric rolling stock are lower than diesel in terms of fuel and track charges
  2. new trains will be required in the next 10 years because the present diesel stock on VL and GWML are time expired
  3. use of cascaded stock on valley Lines from the London area will keep replacement rolling stock costs down


Potential value for money benefits of electrification

  1. Cost reductions over the life of the next Wales and Borders franchise of 20% (even with the DfT Registered Asset Base costs included) and the SWML> The McNulty Report suggested a cost reduction of 30%. Electrification is the only option which offers the potential of reducing costs to this level whilst delivering passenger experience improvements. Heavy maintenance is a significant cost component for rail operations and these routine costs are generally 30% t0 40% higher for diesel fleets compared with electric rolling stock.
  2. Use of more efficient standardised rolling stock. Having an electric fleet and a diesel fleet is considerably more expensive than using one form of motive power
  3. Improves the journey to work experience from Swansea to Cardiff through more on board capacity
  4. Reduces journey times through faster acceleration of electric trains.
  5. The Cardiff Area Signalling Programme (CASR) increases the throughput of trains on the GWML line. This could give more frequent services between Swansea and the capital and with the bigger trains significantly improves the journey.
  6. Running time reductions through higher performance electric units will allow an improved and more even timetable to Swansea. However the speed limits on the SWML referred to in this paper preclude any significant journey time reduction. A report in September 2016 however referred to an additional 5 minutes journey time penalty between Swansea and Cardiff on IEP trains compared with IC 125. This was due to a capping (muzzling) of acceleration on the bi-modal version of the new train. Taking off this cap will retain the 54 minute journey time but at extra fuel cost to increase acceleration rates
  7. This form of investment generates more passenger demand (the so called ‘sparks’ effects) thus having an impact on road traffic congestion a particularly serious problem for Vale commuters
  8. Could be the basis for a further electrification programme by the Welsh Government and the private sector in for example the proposed rail link (2011) to Cardiff Airport
  9. Emissions from electric traction are reduced both locally and potentially at the generating point
  10. Assists in regional regeneration in south central and west Wales
  11. Provides a long term investment in south Wales
  12. The original business case (2012) that included 4 electric trains per hour between Swansea and Cardiff, This was the DfT’s basic criterion for electrification. These were

 

Electrification SWML and pros & cons of bi-modal trains

South Wales has looked forward to electrification of the main railway line since it was agreed by HM Treasury in the 2009 report ‘Britain’s Transport Infrastructure – Rail Electrification’

The trains

Putting up the wires

 

The original DfT plan was to run Swansea – Cardiff local services as EMU’s with possible extension to Bristol TM. This would give a through service to provide for central south Wales commuting and also the Cardiff – Bristol commuter. This required electrification into Bristol TM; Bristol Parkway and the line through Bristol Abbey Wood station. This would then make Cardiff and Bristol TM hubs for passengers travelling to / from Wales

So overall an increase in local diesel services west of Swansea taking advantage of the rebuilt Llwchwr (Loughor) Viaduct. Swansea would become a hub for 2 or 3 tph from the west and 4 tph travelling east.


Conclusion

This means the business case for electrification to Swansea was not just for IEP benefits (i.e. the London service).The process adopted of ‘competitive dialogue’ differed  from the process used by England’s DfT; Scottish Government’s Transport Scotland and other EU governments where franchising of railways takes place.  That process allows the transport authority to specify the service required.

Had WG been able to insert a requirement for electric local services in a detailed franchise specification as per the original business case in 2012, DfT would have had great difficulty in rejecting electrification to Swansea and the outcome may have been quite different.

In 2011 the estimated benefit cost ratio (BCR) to Bristol and Swansea were both above HM Treasury’s base acceptance rate of 2% and when Valley Lines was included reached over 4%. However the cost estimates were based on previous average costs and the more detailed recent analysis showed large cost increases, bridge reconstruction in particular, west of Cardiff - see evaluation Economic Case (value for money) and Financial Case (affordability)

However journey time savings are not possible between Swansea and Cardiff as line speeds are restricted to 75 – 90 mph, a result of winding track resulting from the topography and 1850’s deals with local landowners. But this indicates the lack of a rail strategy for Wales and England (from Westminster) including line straightening taking place in advance of electrification providing  a further 20 minute time saving resulting from 140 mph train speeds, as will occur east of Bristol Parkway.

Restarting Swansea electrification in the future, apparently a UK Government option, will incur the set up costs of a new project –putting a new technical team together, a new supply chain for materials and equipment and renewing funding, evaluation and planning processes. The planned major electricity sub-station at Llanwern has not been mentioned in the statement despite being a pre-requisite for Swansea and any Valley Lines electrification.

In his telephone call to me in July Alun Cairns indicated he was in negotiations with Chris Grayling (Westminster Transport secretary) regarding new express services running directly between Carmarthen and London using the Swansea district line adjacent to the M4.  Their economic benefit to west Wales is an attractive proposition as was his suggested park and ride station at Velindre – proposed in my report to Welsh Government on public transport hubs in Swansea (2016). But this could already have been in a strategy.

And the forecast 142% SWML passenger growth becomes a major challenge.

Options for alternative train services (2018)

 

 

Other changes in 2018

  1. New Wales and Borders franchise let (?)
  2. New rolling stock (either diesel or electric) will be required as the current diesel rolling stock is approaching life expiry (2020)B
  3. Follows naturally from the decision to electrify the GWML to Cardiff. The continuous electrification onwards from that scheme would reduce any incremental cost of a restart of the work by 20%.

 

 

THE COST OF ELECTRIFICATIONOF THE RAILWAYS IN WALES

  1. The cost of £450m - £500m (the latest published figure) provides an attractive return (DfT economic and financial cases) for what is a modest investment when amortised over two 15 year franchise periods. The electric wiring and the cascaded rolling stock would not be expected to be life expired before the end of that period.
  2. The High Level Output Statement(HLOS) and the Network rail Control Period 5 (2014 – 2019) needed to have this scheme in them if the finance is to be forthcoming

Tranche 2 and previous reviews

In 2009, the House of Commons Welsh Affairs Committee was ‘disturbed’ by a DfT map showing planned electrification in two tranches: the first to Bristol and a second tranche through the Severn Tunnel to Swansea. DfT officials, it was suggested, did not favour electrification west of the Severn Tunnel and on its own that benefit cost ratio would be insufficient to justify investment.

Transport secretary Andrew Adonis ordered an analysis of the through route to Swansea where overall construction costs, journey time benefits and revenues provided the economic return required.  This was agreed by HM Treasury and published in ‘Britain’s Transport Infrastructure – Rail Electrification’ in July 2009.

A third review of electrification ordered by the next minister, Philip Hammond (2011), caused further delays in the electrification programme.

The Rt Hon Patrick McLoughlin’s statement on ‘which of the new IEP (trains) will be able to run’ and ‘electrification to Swansea – all the way – is a top priority’ requires clarification. 

It is here that the Mr McLoughlin’s words of ‘an IEP train’ to Swansea may be reflected in several indicators and may have suggested the cost basis was that was affordable:

Elements in the BCR analysis

These indicate the cost (affordability) element, the net cost (with revenue):

 

Benefit Cost Ratios (BCR’s) as known as an affordable cost indicator

London – Bristol: above 6:1. Therefore well above the HM Treasury acceptable limit of 2:1 and under construction. Costs are relatively low; few tunnels or old overbridges; runs through open land. Passengers are 100% of the flow at the Reading section and fall to about 50% of the flow at Bristol on the both routes

Bristol – Cardiff (current figures not available to me). Previous BCR varied from 2:1 to 3:1 so acceptable to HM Treasury and would be in competition with other schemes but for ‘the priority given to the GWML’. Passenger numbers are high with about 30% of total flows on the line

Cardiff – Swansea (current figure N/A to me) previous figures for this section as a stand – alone project was 0.9:1 so below HMT minimum. In basis terms it is 25% of the route miles but with <10% of passengers loadings. This could only ever be electrified now on a sequential basis (so now is the last chance for probably 40 years). With any new schemed 30% of the costs are set up costs. Crossrail has acquired much of these set up costs for GWML. These would only reduce the BCR for Cardiff Swansea

In the earlier studies for WG when VLE and GWMLE / SWMLE were combined they achieved a BCR of 4.6:1. This was based on the lower cost of VLE compared with now and a high passenger flow on VL.

Network Rail is transparent about the challenges and risks in meeting the deadlines to Cardiff (2017) and Swansea (2018).

However any backwards move for the completion date to Swansea would be unacceptable in Wales although up to a year late might be palatable if it brings the required electrification.

As with all rail infrastructure investment it is amortised over 60 years. An investment of say £550m with interest changes of 3% pa (as WG / NR backed by HMT) would cost circa £25m pa

BCR methodology / assumptions – capital costs

Two key questions to be asked in determining between electric or bi-modal trains are:

 

HOW CANCELLING ELECTRIFICATION WILL IMPACT ON SWANSEA AND CARDIFF

Wider economic benefits are lost

 

Rate of return

The BCR using conventional criteria may be unacceptable to progress investment. However the imagery for inward investment and for sport and tourism will not put areas west of Swansea not the city in a favourable light.

Electrification to Swansea as a stand - alone project has a low rate of return. However as an incremental project following immediately behind completion of the wires to Cardiff it achieves the lowest construction cost.

Through these two changes, incremental construction and adequate specific funding, electrification to Cardiff will be complete by 2019.and followed immediately by the wires moving west to Swansea by 2020.

Local communities will not be temporarily without a convenient rail crossing but local residents and planning authorities should consider the major benefits to the south Wales economy resulting from electrification. It has been a long battle to achieve this and we have to ensure success at this last stage.

No electric trains unless DfT changes its plan

Unfortunately the late delivery of electrification by two years has required the Department for Transport to order more bi- modal diesel – electric trains which are heavier than electric trains as they have a fuel tank and generators aboard thus resulting in slower acceleration and lower journey time savings. This has avoided storing electric trains but it does imply wasteful operational costs of diesel trains operating under wires. It has also made the abandonment of electrification on Cardiff – Swansea, London – Bristol Temple Meads and Cardiff – Bristol TM all of which would have benefited south Wales. It has been suggested that once the decision for a total bi – modal fleet (September 2015) was made the Cardiff – Swansea electrification scheme was in doubt.

The majority of rail investment schemes are being delivered on time and on budget. But, in particular, electrification cost forecasts were lower than the outcome costs. Network Rail has not had experience of electrification projects for 20 years so it worked with limited cost support but planning and scope was inadequate in the early stages of projects.

 

 

 


THE CASE FOR DEVOLVING RAIL INFRASTRUCTURE SPENDING T0 THE WELSH GOVERNMENT

The term transport devo – max (coined in 2014) relates to those aspects of transport policy and expenditure which have to be transferred from Westminster so the National Assembly can make integrated decisions in Wales.

Moves to extend the Assembly’s transport responsibilities have set the basis for radical change (the 2006 Transport Wales Act) but the Silk Commission 2014 recommendations has seen little commitment from the DfT.

Roads and public transport revenue support are determined in Wales. However the current transport governance gap prevents logical expenditure decisions on different options resulting in the current controversy over Valley Lines electrification and ports development. Consequently transferred responsibility is the only rational way forward.

Wales should acquire the responsibilities set out below and the consequent fiscal arrangements to pay for them. The objective of successive Welsh governments and three and possibly four main stream political parties has been to approach transport investment and operations on an integrated basis to provide best value for money, ease of personal travel and efficient freight movement.

The creation of the new Traffic Commissioner for Wales (Wales Act 2017) with bus and truck responsibilities was a major step forward

The powers and structures required are:

 

 

 

There must be a strong rationale for these transfers based on benefits making passenger travel easier and more affordable and freight movements more efficient. They of course require a commensurate transfer of additional financial provision via the Welsh Block grant and radical APD, income and corporation tax changes in Wales.

November 2017