The enhancements delivery deficit
In June 2015 the Secretary of State for Transport, Patrick McLoughlin, “received advice that the costs and timescales of some of Network Rail’s enhancement projects had increased beyond expectation”.
In his oral statement to Parliament he announced the appointment of Sir Peter Hendy as the Chair of Network Rail; and commissioned him to conduct a thorough review of the Control Period 5 (2014 to 2019) enhancements programme in England and Wales, to identify what could be delivered in an affordable and timely way within the funding period to 2019.
The Hendy Report was published on 25 November 2015. In its January 2016 draft Enhancements Delivery Plan Update, Network Rail claimed that “most of the originally planned projects will still be delivered in Control Period 5 (2014 – 2019) with significant benefits for passengers and freight users”. (Investment on Britain’s railway is based on five year “Control Periods” similar to those of the former Eastern bloc economies.)
However, the “project entries” suggested that a major part of the CP5 programme was not deliverable in CP5. The Secretary of State is “minded to accept Sir Peter Hendy’s report, subject to a period of consultation, to ensure the most efficient and effective plan is executed and maximum value is derived for passengers, freight users and taxpayers”. The consultation runs until 18 March 2016, and is “a critical input” on how “the rail upgrades programme will be delivered”.
Following the conclusion of the consultation process, the DfT will analyse the responses and publish a report summarising the responses made and the Secretary of State’s decisions on investment priorities in the light of them.
The problem is that almost no information is available about the economic worth or business case for the schemes in the Enhancements Delivery Plan. Where in the public domain, for example, is the economic case for the Great Western electrification, the East Coast Connectivity Fund, or the “Electric Spine”?
The escalation in capital costs of Great Western electrification must have economic and technical implications for other enhancement projects. But the Department for Transport is refusing to provide an updated benefit-cost computation, or details of its costs and benefits.
Because of the transparency deficit, there is no way of establishing which enhancement schemes ought to be progressed, or when.