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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Andrew Gwilt   04/07/2017 at 10:08

So when will the Rotherham extension open once the extension and electrification is completed and the Class 399 Tram-Trains units to operate on the new line to Rotherham as all 7 of these vehicles have been delivered ready to be used for passenger service.

Sonning Cutting   04/07/2017 at 11:08

Most knowledgeable Engineers know that on UK Infrastructure the concept of Tram/Train is a nonsense. There are too many conflicting standards and parameters to embrace. Much better to copy what has been done in Manchester et al and convert Heavy Rail to Light Rail, but not try to blend the two.

Lutz   04/07/2017 at 11:22

You would have hoped that NR had sorted itself out long before now after a number of big planning failures in recent years, but this is just another indication that is not there yet. This fail indicates that the organisation is still in such a poor state that it can not be trusted to deliver anything above medium sized projects in the rail sector. Extraordinary! Well, I think this is a bad omen for the allocation of funds in CP6.

J, Leicester   04/07/2017 at 13:52

I wouldn't even call this more than a "medium" sized project in the scheme of things, Lutz. It's nothing short of embarrassing. That being said, it's not really in Network Rail's interests to invite what is likely to be a loss-making service onto its rails using bespoke arrangements which will not benefit national rail services and potentially impact capacity. I lived in Sheffield for 3 years, and though the tram was available, I always took heavy rail to Meadowhall from the city centre. It was cheaper and, surprisingly, more frequent than the tram service, even when I forgot my young person's railcard! I can only see this experiment with tram-trains to Rotherham suffering the same fate. The same can be said for bus travel in Sheffield too - it's far cheaper than using the Tram, even with its various subsidies. It pains me to say it, given I do enjoy riding the tram and love seeing them in Sheffield's streets, but the entire Supertram network has been a white elephant since its inception.

Jimbo   04/07/2017 at 18:18

@Andrew Gwilt - have you even read the article? Summer 2018 to answer your question. So the cost for 7 new trains and some minor track upgrades is £75million - amazing how badly wrong this is for a so-called "pilot". How much would a standard heavy rail solution have cost? Somehow this doesn't look like a success even before it starts. What hilarity this must be causing our european cousins!

Roger, South Yorks Council Tax Payer   05/07/2017 at 07:40

Should have had the Germans on this job from the beginning; they're the ones with the expertise. Can't believe the latest fiasco. How can they get to this late stage before finding that College Road bridge by Rotherham Central station was too low?! I worked on Nottingham Express Phase 1, alongside the Robin Hood line. How many walkouts does it take to spot something as basic as this? J, look at the Supertram passenger loading figures!

J, Leicester   05/07/2017 at 09:42

Roger, I see that passenger figures peaked in 2012 and have been declining ever since. I do recall some major track renewal works a couple of years back that may have impacted on those figures, however. Stagecoach has given vague assurances that the system is now "profitable", but has never backed those claims up with solid figures. I think it's likely that a significant subsidy from SYPTE isn't being fully disclosed - after all, the 1998 concession was a measly £1.15 million after the absurd amount of money thrown at getting the system off the ground - a massive loss for the SYPTE and an acknowledgement of its failings. Who would have wanted to take on a system with heavy debts and complex infrastructure needs, which was not proven to turn any sort of profit, without financial reassurances that would make it a risk-free enterprise? Either way, if you add this latest ballooning cost to the £240 million spent building the original network and the further £32 million burnt on the aforementioned track renewal (which, it turned out, needed doing a full decade earlier than at the 30 year interval which had initially been predicted!), the network is nowhere near breaking even, and probably never will be. I will reserve judgement for the tram-trains until they begin operation, but I'm going to put my neck on the line and say they will not be profitable, for the reasons I previously mentioned with regards to my journeys to and from Meadowhall - and that's not to mention the maintenance requirements for a system which is bespoke not just within the Supertram network, but for the whole of the UK. I acknowledge that some relief is needed for passengers travelling to and from Sheffield for the town, as buses and rail services are packed, but I'm not sure the tram-train is the best option.

Andrew Gwilt   06/07/2017 at 03:12

Maybe you are right @Jumbo.

Andrew Gwilt   06/07/2017 at 08:35

@Jimbo my mistake. Fs.

Spider   06/07/2017 at 12:06

Has no one in Network rail considered the example of the Sunderland extension to the Tyne and Wear extension in determining costs and issues to be attended to. Surely that would have informed their planning!!

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