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Great Western Electrification costs increase to £2.8bn

Network Rail chief executive Mark Carne has told MPs that the cost of electrifying the Great Western Main Line could go up to £2.8 billion.

Addressing the public accounts committee, Carne said the increase was a “significant disappointment”.

Electrification of the route between London, Oxford, Newbury, Bristol and Cardiff was originally estimated at £874 million, with a planned completion date of 2019.

Carne said that inadequate planning, poor cost estimations and the company’s change in status will see that figure rise to between £2.5 billion and £2.8 billion.

Outlining the cause of the project’s current challenges, Carne said: “First, there was inadequate planning and scope definition of the project in the early phases.

“Secondly, there was poor cost estimating, particularly on the portfolio as a whole on electrification projects. It is important to note in that regard that, of course, Network Rail has not done any electrification of any significance for 20 years, so the cost base was out of date. The railway bears no resemblance, really, in some respects, to that of 20 years ago.

“The third reason is that the intended flexibility of the regulatory regime has changed post-reclassification of our debt.”

2 COMMENTS

  1. This points to a greater need for a systems approach to be adopted right from the start of a project, particularly one as huge as the Great Western Electrification programme. Most of the cost estimation omissions would have occurred at interfaces and as a result of failure to identify all affected parties and aspects of the system railway early on.

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