04.07.17
Costs of Sheffield tram-train pilot soar to five times its original budget
The costs of the beleaguered Sheffield tram-train project are expected to have run over five times the original budget after months of delays and uncertainty, a scathing report has today revealed.
Releasing its independent findings, the National Audit Office (NAO) stated that costs for the budget will have spiralled by 401% by the time works are completed in May 2018 ready for it to be used by passengers in summer that year – more than two years later than originally expected.
Originally given a budget of £15m by Network Rail and DfT in 2012, the auditor reported that costs started to rise significantly early on the project. By November 2014, costs had already tripled to £44.9m.
And by June 2016, NR admitted that costs had bumped up even further by up to £25m while the expected opening date was also pushed back two years.
The DfT and Network Rail now expect the work to cost over £75m, a fivefold increase from the original price tag as a result of revising the plans in December last year.
As of June this year, the infrastructure owner had achieved significant construction milestones in preparation of the delayed opening date of summer 2018 – including installing new track, the power supply and a tram-train platform at Rotherham Parkgate. But this was after testing was delayed on a number of occasions, before it finally started a few months ago.
Commenting on the delays and growing expense of the tram-train pilot, Rob McIntosh, Network Rail’s London North Eastern and East Midlands route managing director, argued that costs and timescales had moved as the project grew in scope and complexity.
“Good progress is being made and a new project team is now in place and driving the scheme to its conclusion,” he explained. “The project has learned from tram-train systems in Europe that have encountered their own challenges but there were still a significant number of unique issues to the UK that had to be overcome.”
McIntosh also revealed that the infrastructure owner had now changed the way it manages the project, added new expertise to the construction team and created a more robust schedule that was already yielding better results.
“Upcoming milestones include the completion of the tram-train stops at Rotherham Central and Parkgate and the completion of the overhead line power system,” he concluded. “We look forward to continuing to work with our partners to enable the introduction of a full tram-train service for passengers in 2018.”
Overall, the DfT assessed whether it should push ahead with the project in two separate occasions. When the Treasury gave it the green light in 2012, it admitted that it was being approved on an ‘exceptional basis’ to allow for a more detailed evaluation of tram-train schemes. In July last year, the department’s then permanent secretary recommended stopping further work, but the transport minister rejected this and asked Network Rail to meet the project’s funding shortfall.
The infrastructure owner then had to allocate almost £5m from its own renewals budget to address issues with the poor condition of the existing assets, and proposed to complete the construction works by re-prioritising funding from its wider enhancement programme. Overall, it re-allocated around £22m to the tram-train work, a move endorsed by the transport minister in March.
While the DfT and NR claim to have “learned lessons” from the pilot, it is still too early to conclude whether it will truly realise strategic benefits. While the infrastructure owner has already shared these lessons with other tram-train promoters and established new technical standards for signalling, the department has not yet evaluated the project’s value for money.
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