Great Western upgrade heading over budget again

Network Rail still has work to do to get the costs of its Great Western route modernisation project under control, a new report by the public accounts committee of MPs has said. The latest PAC report into the electrification of the line between Maidenhead and Cardiff has clarified previous findings on reasons behind the project running three years late and £1.2bn over budget. Network Rail considers the overall scheme back on track since it was replanned, but there is very significant risk of the work going over its new budget, the PAC report says. A current financial exposure of £274m is £49m over contingencies Network Rail has available. 

The PAC report calls for a further reassessment of the risks the project is facing, with a general and more widespread improvement in the way Network Rail plans major route upgrades including electrification. The Great Western project has been delayed partly due to its lack of a proper plan for obtaining 1800 separate planning consents from local authorities. Network Rail should have considered the alternative of obtaining a single Transport and Works Act Order for the entire route, the PAC report says.

Network Rail revisited and replanned its entire Control Period Five investment programme after the problems besetting the Great Western upgrade came to light in 2015. Some sections of the Great Western project and other electrification schemes were knocked forwards into CP6 from 2019-2024 as the overall cost of CP5 was revised £2.5bn upwards to £40.5bn.

According to the PAC, Network Rail has acknowledged that early stages of the Great Western electrification fell short of necessary planning and cost estimations and controls. A report by Network Rail chairman Sir Peter Hendy found a lot of the problems down to a lack of project managers experienced in electrification schemes. It is now over 20 years since any of Britain's main line railways were electrified.

Network Rail claims to have reinforced the way it embarks on major upgrade projects. In a statement, it said: “Network Rail and the Department for Transport have learnt the lessons from the poor early planning of this project.

“Today we do not take forward major projects until they are properly scoped and planned, with a robust estimate of what the cost will be. Despite the continued challenges and complexity of the Great Western programme we are making good progress and real passenger benefits have started. This year we and our colleagues at GWR have already introduced the first ever electrified services between Paddington and Hayes & Harlington.”

However, the PAC points out that continuing risk of project cost overruns is putting other major projects, including the Midland Mainline electrification and TransPennine Route Upgrade at risk.

The chair of the PAC, Meg Hillier said: "Government accepts it got this project badly wrong and must now demonstrate it has learned the lessons. Network Rail admits there are still very significant risks in the Great Western scheme and it is vital these are fully identified and carefully managed. It must work with the Department for Transport to ensure this information is properly factored into the whole rail modernisation programme.

"For its part, the Department should urgently review its plans for electrification—not just on the different sections of the Great Western route, but also on the Midland Main Line and TransPennine routes."