Press Release - The Modernisation of the West Coast Main
Line
22 November 2006
The Strategic Rail Authority (and, subsequently, the Department
for Transport) and Network Rail have successfully turned around the
programme to modernise the West Coast Main Line. To date, Network
Rail has delivered the new strategy for the line on time, achieving
benefits for passengers, including shorter journey times and
improved punctuality. Network Rail is likely to overspend its
budget for the programme by £300 million and will bear this
cost.
By 2001, neither the rail infrastructure renewal and upgrade nor
the new trains were on course for delivery as set out in the 1998
agreement between Railtrack and Virgin Rail Group, to provide for
140 mph train running from mid-2002. The estimated final cost of
the programme had increased sixfold to £14.5 billion (in 2002),
contributing to Railtrack being put into Railway
Administration.
In January 2002, the Secretary of State asked the Strategic Rail
Authority (SRA) to intervene and find a way forward. By March 2002,
although £2.5 billion had been spent, including £350 million on
developing new technology later dropped from the scheme, the
programme was only a sixth complete.
In 2003 the SRA developed an industry-accepted strategy for the
programme to deliver 125 mph running along the route from 2004-05,
with later capacity increases, at a planned cost of £8.3 billion.
Key lessons from turning around the programme have been the
importance of engaging stakeholders, using proven technology,
tightly controlling scope and having the expertise to effectively
manage and monitor delivery by a large number of contractors.
As forecast in April 2006, the programme is likely to cost £8.6
billion, with Network Rail achieving 70 per cent of the £940
million efficiency savings the Rail Regulator assumed it could
achieve, but overspending by £300 million (10 per cent) on the
Regulator’s £3 billion programme funding allowance for 2004-09.
This overspending is balanced by underspending on the West Coast
regional renewals funding allowance.
In addition to the programme cost of £8.6 billion, the SRA and
the Department for Transport paid £590 million more in subsidy to
Virgin West Coast in 2002-06 than envisaged in its franchise
agreement, to sustain train operations.
Carrying out the upgrade to a tight timescale, in order to
achieve early passenger benefits, put pressure on costs, but
Network Rail has improved its cost control. Problems in
implementing new signalling and train control technologies
increased costs by over £35 million and 8 per cent of the time the
track was booked for engineering work was unused in 2005-06. But,
between 2003-06, programme track renewal unit costs fell from 60
per cent to 14 per cent above the network average.
So far, the programme has delivered its planned benefits to
passengers. The fastest journey between Manchester and London has
been reduced by 36 minutes and from London to Glasgow by 42
minutes. Punctuality and passenger satisfaction are much improved
and the number of passenger journeys on Virgin West Coast increased
by 20 per cent in 2005-06, which was 4 per cent more than expected
in the business case. The programme’s remaining key projects will
increase capacity for passengers and freight, but the industry
consensus is that the line will not be able to sustain current
growth levels beyond 2015-2020. There also remains uncertainty
about the expected lifespan of some of the equipment on the
upgraded line.
Sir John Bourn, head of the National Audit Office, said
today:
“When the Strategic Rail Authority stepped in, the
project to modernise the West Coast Main Line was in disarray,
vastly over-budget and with few of the planned improvements in
place. It was only through good direction by the Strategic Rail
Authority and then the Department for Transport and through the
exercise of firm management by Network Rail that the project was
brought back on track so that benefits of faster journeys are now
being delivered to passengers.
“The weaknesses in the management of the project before
2002 should provide ample warning of the dangers of entering into a
scheme on this scale without clear leadership, plans and project
management expertise; without fully engaging stakeholders; and
using untried technologies.
"Future major projects should draw upon these lessons
learned, give careful consideration up front to the potential
effects of programme slippage and include plans to minimise these
risks.”
Notes for Editors
- In 1998, Railtrack, the private sector owner and operator of
rail infrastructure, and Virgin Rail Group, which operates the West
Coast passenger rail franchise, agreed to upgrade the West Coast
Main Line and introduce new trains to improve services. Railtrack
went into Railway Administration in October 2001 and Network Rail
took over its responsibilities in October 2002. The Strategic Rail
Authority provided direction and leadership for Britain’s railways
from 2001. Following its abolition in 2005, the Department for
Transport has been responsible for the letting of passenger rail
franchises and sponsorship of major rail investment projects. The
Office of Rail Regulation determines the efficient cost of Network
Rail’s work and is responsible for ensuring that Network Rail
carries out renewals and enhancements in a timely, efficient and
economical manner. It replaced the Rail Regulator in 2004.
- All figures in this press notice, and in our report, are in
2005-06 prices to aid comparisons. The expected final programme
cost of £8.6 billion is equivalent to the £8.1 billion total
previously reported by Network Rail, which was in a mix of current
prices.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office, which employs some 850 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 60/06
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