How much will it cost? Expanding the network.

[whole diary]

[Red Squirrel]

How much will it cost?

Another forum member raised this question in the context of Dawlish, but I think it is worth widening it into a general discussion about rail investment.

There's a facile way to answer the question, which is to calculate how many holes you need to dig, how many metres of rail you need, how trains and so on. That doesn't tell you very much though, because we're talking about an investment and you measure the value of an investment against its returns. But we also know that if rail was expected to wash its face in pure business terms then the GWML^▸ (Great Western Main Line) would end at Bristol Parkway, something even Margaret Thatcher stopped short of.

This whole business of calculating BCR^▸ (Benefit Cost Ratio) is probably pretty much nonsense, given that the benefit is unquantifiable: how much is it worth to the economy if Jo Smith can get to work by train, or if Mo Khan can get to see his gran a bit easier, or if a business relocates to Galashiels? The only honest answer is surely that no-one really knows.

I don't think anyone pretends that Beeching's rationalisation was perfect, either in its analysis or in its execution; its effects have left us with a network which could perhaps best be described as unfair. If you live in Chippenham or Ebbw Vale, you have access to a pretty good train service; if you live in Hawick or Cheddar, you don't.

So how do you decide where to invest? This is particularly difficult given that our railway is, and must probably remain, state-owned in one way or another. Rail investment has to stand up against education, health and all the other government budgets that make this a civilised country. We have to concede that keeping the existing network safe, reliable and attractive must take priority if we accept that funds are limited. But do we accept that the network cannot be expanded, and that this unfairness should persist? Is it romantic nonsense to believe that many parts of the country suffered damage when the railways were ripped up, damage that no bus service could ever compensate for?

The cost of building new lines along the courses of old ones - 're-opening' is a misnomer - sometimes appears to be astronomically high, probably inflated by applying stricter rules to rail than to road transport. But do we just give up on this, or do we accept that cost of reinstating some key routes is the price we have to pay for the mistakes of the past, and just get on with it?

[grahame]

Some key questions ... and where does one start?

What's it going to cost to plan, design, build and commission?
What extra costs in terms of new (or second hand) trains and staff take on costs?
Who's going to pay that money and on what terms?
How accurate can we be in our costings?
Are there none-core elements to what's being done that could be saved?
While we're at it, should we making provision for potential following stages?
Are we going to cause problems elsewhere that will require money to be spent there?

What will the [annual or other period] running costs be?
How will or could those annual running costs change over time?
Will we be damaging traffic on other services to their cost and detriment?
Is there a logic train operator and is so are they capable of taking on this operation?
Who do we charge with making this work, and how do we enable and motivate them?

What benefits will the line / service / station bring to the neighbourhood it serves?
To the wider area which is part of the regional / intercity network?
How do we convert part of that benefit into capital and operational payment?

You have so many variables and incalculables that you'll never come up with a quirk-free system that gives you  a level playing field measure.  Who's to say if you're looking at a 3 year or a 30 year target?  Who's to set probability factors?   Who sets the price of people's time saved as they travel, or the cost of a life if your scheme improves air quality?  If your scheme is causal in generating new development, how much of that development do you factor into your sums?

Sorry - were you asking questions to see answers?  All I seem to have done so far is to generate more questions!.    It is - I think - worth asking yourself early in the process of suggesting things ALL of the above questions.  Elephants in the room can be quite easily spotted.  Hippos lying in the river with just their nostrils above the water are far harder to see.

From The BBC^» (British Broadcasting Corporation - home page)

Ungainly as it is, the hippopotamus is the world's deadliest large land mammal, killing an estimated 500 people per year in Africa. Hippos are aggressive creatures, and they have very sharp teeth.

And you would not want to get stuck under one; at up to 2,750kg they can crush a human to death.

[Oxonhutch]

From The BBC^» (British Broadcasting Corporation - home page)

Ungainly as it is, the hippopotamus is the world's deadliest large land mammal, killing an estimated 500 people per year in Africa. Hippos are aggressive creatures, and they have very sharp teeth.

And you would not want to get stuck under one; at up to 2,750kg they can crush a human to death.

Completely trashed one of my African field camps did hippos. Bean-counters demanded proof that they hadn't just trashed it themselves - a bag of fresh hippo poo, care of camp leader,  was on the Chief Accountant's desk the next day.

Sorry, off topic ...

[TaplowGreen]

From The BBC^» (British Broadcasting Corporation - home page)

Ungainly as it is, the hippopotamus is the world's deadliest large land mammal, killing an estimated 500 people per year in Africa. Hippos are aggressive creatures, and they have very sharp teeth.

And you would not want to get stuck under one; at up to 2,750kg they can crush a human to death.

Completely trashed one of my African field camps did hippos. Bean-counters demanded proof that they hadn't just trashed it themselves - a bag of fresh hippo poo, care of camp leader,  was on the Chief Accountant's desk the next day.

Sorry, off topic ...

On the upside, for the next ten years his roses won prizes.

[Red Squirrel]

...a bag of fresh hippo poo, care of camp leader,  was on the Chief Accountant's desk the next day.

Well that to my mind is how engineers should treat accountants. There's something badly wrong when people who create things are seen as subordinate to people who count them.

[TaplowGreen]

...a bag of fresh hippo poo, care of camp leader,  was on the Chief Accountant's desk the next day.

Well that to my mind is how engineers should treat accountants. There's something badly wrong when people who create things are seen as subordinate to people who count them.

Probably best for all to treat each other, and each other's roles with mutual respect and work together as closely as possible, helps to avoid this sort of thing............

https://www.maidenhead-advertiser.co.uk/gallery/maidenhead/106878/auditors-slam-2bn-rail-electrification-overspend.html

[Lee]

Having advised politicians as well as having worked on a number of rail business cases in the past, I do find myself concurring with a lot of what Red Squirrel says. Whilst BCR^▸ (Benefit Cost Ratio)'s and the like are an important component of individual schemes, when it comes to broad-brush transport strategy such as whether to take forward high-speed rail, whether to proceed with an electrification program or whether to expand the rail network, it is always the political decision that ultimately takes precedence over the business case.

Take HS2^▸ (The next High Speed line(s)) for example – For years we were told that the figures didn't add up, until one day a political decision was taken, and suddenly they did. The same is true of electrification, out of favour throughout the early years of privatisation because of “lack of flexibility” until one day a political decision was taken, and suddenly it was all the rage again.

That doesn't, of course, answer what I believe were Red Squirrel's two separate main questions though – Namely “How much will expanding the rail network cost?” and “Should we just get on with it or simply give up?”

I've been giving this some thought over the last day or so, and here's what I'm going to do. I'm going to give you a scenario where it is absolutely 100% in the political interests of either the current Conservative Transport Secretary, or a potential incoming Labour Transport Secretary, to embark on the biggest expansion of the non-devolved UK^▸ (United Kingdom) rail network in terms of lines and stations in living memory. Futhermore, in this scenario, just one political decision is required to make it a reality, and no, it isn't scrapping HS2 – We can still have that as well, should we so wish.

First though, we need to decide what our network expansion program will consist of, and (ta-daa!) “How much will it cost?”

In choosing which line reopenings to include, I've gone with the relatively well-respected Campaign for Better Transport's list of “Top 12 Line Reopenings”, with one slight alteration – The list included the line between Stourbridge-Walsall-Lichfield, but since it was published, the section that includes Wednesbury and Dudley has been approved for conversion to light rail, so I've gone with Walsall-Lichfield instead.

In terms of costings, had I given myself weeks perhaps stretching into months to reply to this topic, I would have loved to have based them on following grahame's list to the letter. However, I've only actually given myself a day, so I'm afraid you'll have to excuse me relying on other people's calculations on this occasion. What I've done in each case is to take a rail industry recognised business case figure, and where necessary uprate it for inflation. This is obviously not perfect, as it's effectively my best guess based on the best guesses of those who officially studied the relevant case. As a result, some figures do look rather on the high side (and you can tell that from those cases which I've included that we've discussed at length on the forum), while some others look rather on the optimistic side to say the least:

Ashington-Blyth-Newcastle - £203 million

Portishead/Metrowest Phase 1 - £116 million

Walsall-Brownhills-Lichfield - £157 million

Newcastle-Washington-Durham Parkway-Ferryhill - £111 million

Lewes-Uckfield - £186 million

Skipton-Colne - £103 million

Leicester-Burton - £186 million

Fleetwood-Preston - £21 million

Wisbech-March - £122 million

Totton-Hythe - £15 million

East West Rail Complete Oxford-Cambridge - £1 billion

Bere Alston-Tavistock-Okehampton - £479 million

TOTAL - £2.699 billion

In addition, I will also include an additional £341 million for a massively-enlarged New Stations Fund, so we can get as many of those much-needed schemes opened as possible, rather than languishing on the drawing board indefinitely.

FINAL TOTAL - £3.04 billion

So how are we going to pay for all this, I hear you ask.

The DfT^» (Department for Transport - about) has a Road Investment Strategy which will see £15.2 billion invested over 5 years in over 100 major schemes to enhance, renew and improve the road network, which equates to roughly – you've guessed it - £3.04 billion per year. The period runs from 2015-2020 and is known as RIS 1. In parallel to RIS 1, the Road Investment Strategy for the period post-2020 – known as RIS 2 – is being developed along very similar lines, but crucially for us, hasn't been finalised yet..

What I would propose is that the road schemes that would have been funded in the final year of RIS 1 – 2019-2020 – be deferred for one year and instead become the schemes that are funded in the opening year of RIS 2 – 2020-2021. Although this will undoubtedly inconvenience those road scheme promoters affected, remember we are not talking about cancelling any road schemes that have been approved as part of the RIS, and only delaying a few by just one year. When you consider that every scheme on our rail expansion list has been deferred by a lot longer than a year at some stage, I don't think this is a huge amount to ask.

The £3.04 billion that would have been allocated to RIS 1 in 2019-2020 would instead be allocated to the biggest expansion of the non-devolved UK rail network in terms of lines and stations in living memory, and that's the political decision that would have to be made.

So why would taking this decision be absolutely 100% in the political interests of either the current Conservative Transport Secretary, or a potential incoming Labour Transport Secretary?

If you are the current Conservative Transport Secretary, then you've gone from being the Transport Secretary who really wanted to be Transport Secretary to being the Transport Secretary who it all went wrong for. Whether there's a new train to be introduced, a line to be wired up, the integrity of a franchise system to uphold, a new timetable to smooth the way for, or interminable strikes to avoid, it's pretty much been rail industry failure all the way, and all on your watch. However, if you take this political decision, then although those of us with some rail knowledge might find the link tenuous at best, it's entirely possible that the public might look back and say “Until he came along, I never thought these lines and stations would reopen, but look at the network now!” and judge your overall time accordingly.

If you are an incoming Labour Transport Secretary in a Corbyn-led government, then you have to get straight on with renationalisation. Whatever your views on the merits or otherwise of this, there's no doubt that this will be a rocky process, with heated battles likely with those whose positions depend on the status quo being maintained. When things inevitably don't all go according to plan, there is clearly the potential for your time at the helm to be equally mired in the brown stuff. However, if you take this political decision, then although those of us with some rail knowledge might find the link tenuous at best, it's entirely possible that the public might look back and say “Until renationalisation, I never thought these lines and stations would reopen, but look at the network now!” and judge your overall time accordingly.

In the wider political context, unless the UK really is about to turn backside-over-bosum on its axis and vote to remain in the EU^» (European Union - about) in a second referendum, then either a Conservative or Labour government is going to have to steer us through Brexit at the end of March 2019, and who knows what awaits us then? However, if you take this political decision, then although those of us with some rail knowledge might find the link tenuous at best, it's entirely possible that the public might look back and say “Until Brexit, I never thought these lines and stations would reopen, but look at the network now!” (you get the picture...)

Finally, if you happen (god forbid) to be Network Rail, having really not had the greatest of times recently in terms of figures, planning, delivery and pretty much everything else besides, perhaps this is an opportunity for me to focus on something you really have managed to get right (Savour it folks, it aint gonna happen often...)

Following the collapse of the tender process, Network Rail stepped in to take over the construction of the Borders Railway in November 2012, and agreed to build it by mid-2015. Despite major challenges, and having been praised along the way for deploying ground-breaking techniques to overcome line blockages, they duly did indeed build the Borders Railway by mid-2015. It's entirely possible that if they sign-up for this expansion program in late-2019, and build these lines by mid-2022 the public might look back and say “I thought Network Rail were on their last legs, but they built all these lines and stations, and look at the network now!”

I don't think even those of us with some rail knowledge would deny them the credit for that.

[SandTEngineer]

Having worked myself on a number of proposed re-openings and quite a few resignalling/enhancement schemes from NR^» (Network Rail - home page) GRIP^▸ (Guide to Railway Investment Projects) 1 level, the one thing that has always concerned me is that you come up with a delivery figure (usually quite pessemistic), add a contingency number for potential undefined issues, then at the end the financial 'experts' add a 60% Optimisation Bias add on cost.  This completely inflates the scheme cost way beyond anything ever likely to be reached.  Try taking that 60% off some of the figures quoted above and they look much more attractive and the BCR^▸ (Benefit Cost Ratio) probably swings way into positive territory.

The other thing I always have an issue with is why its NR that has to deliver these 'Green Field' schemes.  I note what you say about the Borders Railway but thats a 'one off' in my book.  Time to give somebody else the chance to prove they can deliver.

[Red Squirrel]

Time to revisit the Squirrel Formula!

The Borders Railway ought to be a good benchmark for how much it really costs to build a new railway largely following an old alignment - it involved restoring existing structures, stabilising cuttings and embankments, moving a motorway and other roads, building new bridges and stations. It cost £294,000,000 for 50km, i.e. about £6 million/km.

But that project was completed 3 years ago; things must have changed since then...

The Filton Bank project involved demolishing and rebuilding a viaduct, stabilising cuttings and embankments, rebuilding a station... it should work out more expensive, you might think, because it involves not just laying two tracks throughout, but also re-signalling four lines. It cost £33,000,000 for 6km, i.e. about £5.5 million/km.

So how do these real costs compare with some proposed schemes?

Carmarthen-Aberysywth: 91.2km, budgeted cost £775,000,000 = £8.5 million/km
Exeter-Okehampton-Plymouth: 92km (that's the whole route, from Exeter St Davids to Plymouth), budgeted cost £875,000,000 = £9.5 million/km

I really don't go in for conspiracy theories, but I can't help thinking these estimates are rather inflated...

[CyclingSid]

My recent background has been in public health. I do wonder if some of the problems public health has with investment are similar in a wider context. There is one paper (American) I came back to when the moved public health to local government. One section has the following:

When considering a public health investment today (e.g., improving road safety, preventing mad cow disease, or limiting climate change) that will potentially yield benefits in the future, many politicians correctly understand that their administrations will bear the costs, but the benefits will be reaped on someone else’s watch. They therefore put great effort into putting out today’s fires and relatively little into preventing tomorrow’s conflagrations.

.
How much does this reflect some of the decision making in public transport?

[Lee]

Depends on the investment - If it's something like a "normal" line or station reopening, then it is entirely possible that the current administration will reap the benefits. If it's something like HS2^▸ (The next High Speed line(s)), then it is clearly very likely that future administrations will reap any benefits that may accrue, or indeed suffer from some yet to be foreseen pitfalls.

[stuving]

This fits here quite well, though arguably it ought to be with the rest of the HS2^▸ (The next High Speed line(s)) stuff. A report has just come out (it's on the DfT^» (Department for Transport - about) site) called "High speed rail international benchmarking study". Its conclusions are not novel:

Findings
In summary, the study has found the following:

• HS2 Phase Two has a unique set of strategic objectives and constraints that are not typically present in comparator high speed rail projects.
  
• There are short to medium term opportunities to reduce the capital cost of HS2 Phase Two by up to 27%.
  
• Further capital cost reductions may be possible but would require the relaxation of the strategic objectives or sponsor requirements and their associated benefits.
  
• HS2 Ltd, DfT, HMT, UK^▸ (United Kingdom) Government and the UK industry all have a role to play in the realisation of the opportunities.
  
• HS2 Phase Two is at an early stage in the design process with an inherent level of immaturity in design, schedule and cost estimate.
  

As HS2 Phase Two develops, and with the lessons learnt from this study, these areas can be addressed. In addition, organisational capability and lessons learnt that will flow from Phase One should also result in a more optimised programme.

The study has also found the following options where innovation can be exploited in delivery to make substantial cost and schedule reductions:

• UK Infrastructure Context and Sponsor requirements: Options remain to save cost through localised route and scope refinements, and HS2 Ltd should evaluate these holistically based on estimates of costs and benefits that have been rigorously validated.
  
• Delivery model and the UK industry: There is an opportunity to improve efficiency within the supply chain, through consolidation of the currently fragmented market, including through partnering type arrangements and increased investment in people, plant and innovation. Continuity of the supply chain from Phase One to Phase Two will enable continuous improvement through a step-and-repeat approach to delivery.
  
• Design requirements and assets: There is an opportunity to optimise specifications, employ innovative designs and construction techniques used by international comparators to reduce construction time and costs for linear assets (e.g. viaducts, permanent way), as well as stations and maintenance depots, by taking a cost-led approach to design within affordability limits.
  
• Scope and estimate development process: There is an opportunity to improve the current scope and estimate development processes to enable better understanding of the costs of scope and design decisions, to provide transparency of how costs are driven by requirements, improve the traceability of requirements to their source, and to improve confidence in allowances for uncertainty and risk.
  

The report is presented quite clearly, as these things go, though you wonder why they anonymised the comparator projects but give enough data that I'm sure they can be identified.

The dates are a bit puzzling - commissioned by the government (treasury plus DfT) in December 2014, cover dated 2016, published yesterday. The foreword (not itself dated) says "Since the completion of the initial benchmarking work 18 months ago, HS2 Ltd and DfT have incorporated many of the lessons from comparator projects and made a number of material changes to the early stage design and route." Presumably that refers back from now (2018) to the 2016 date - or did they do they do the bulk of the work in less than six months?

[Red Squirrel]

Depends on the investment - If it's something like a "normal" line or station reopening, then it is entirely possible that the current administration will reap the benefits.

That surely ought to be the case, but it isn't, is it? I takes more than a decade to organise running passenger trains down an existing freight line.

[Lee]

There are also a number of line and station reopening examples that have been both authorised and completed within the lifespan of a political administration. I said "entirely possible" not "always" 

[martyjon]

It takes more than a decade to organise running passenger trains down an existing freight line.

.... until something goes wrong and then its only a case of minutes like when a freight line is used for ECS^▸ (Empty Coaching Stock) workings to and from a depot and the crews have signed the route for such movements.