Great Western rail modernisation costs rocket, says NAO

The government has been blamed for huge extra costs and lengthy delays to the modernisation of the Great Western railway network in England and Wales.

The National Audit Office (NAO) says the estimated cost of the project since 2013 has shot up by £2.1bn to £5.6bn.

Meanwhile delays have added between 18 and 36 months to the project's timescale.

Yesterday the government said electrification of four short parts of the network would now be "deferred".

The audit office's report puts the blame for the project's problems firmly on poor government planning.

It said the modernisation plan was a "case study in how not to manage a major programme".

"Before 2015, the Department of Transport did not plan and manage all the projects which now make up the Great Western route modernisation industry programme in a sufficiently joined up way," said Amyas Morse, head of the NAO.

The Great Western network, which stretches from London out to South Wales and the south west of England, is particularly busy and overcrowded.

The number of passengers arriving at Paddington during the daily peak period is predicted to rise by 81% in the five years up to 2018-19.

Modernisation of the Great Western network started in 2014 and involves electrifying various lines including the one between Maidenhead and Cardiff; ordering new trains; modifying or building new bridges; and changing various services.

Among the problems identified by the NAO were that by the time an overall plan was eventually devised last year:

• new trains had already been ordered two years before, and even before infrastructure planning had been completed
• electrification work had already been going on for more than a year
• the estimated costs of the project were unrealistic
• the number of bridges that would need replacement or alteration was underestimated
• before electrification actually started, Network Rail had failed to devise a "critical path" describing the "minimum feasible schedule for the work"
• surveys for the locations of some new structures had not been detailed enough and therefore had to be repeated.

The result, the NAO said, was that electrification alone will cost an extra £330m and the extent of that element should now be reconsidered.

The government auditor also said that the new trains will have to be reconfigured so that they can run under both electrical and diesel power.

Meanwhile the Great Western franchise operator, FirstGroup, will have to bear much higher costs which, combined with less passenger revenue than expected, means the government will earn less money than expected from the franchise.

Mr Morse added an optimistic note, saying: "It is encouraging that since 2015 the department and Network Rail have a better grip and put in place structures to manage the programme in an integrated way."

"However significant challenges to the timetable still remain and there is more to do to achieve value for money," he added. 

But Meg Hillier MP, chair of the parliamentary committee of public accounts, was not impressed.

"The Department for Transport and Network Rails' failure to integrate crucial elements of the modernisation into one programme from the start has cost passengers and taxpayers' time and money," she said.

"I do not understand why it took the department two years from agreeing to buy new trains to produce a business case," she added.