The decision to pull key rail electrification projects is long overdue, says Katie-Lee English…
The decision to renege on a political commitment is never an easy one – but in this case, it is the right one.
Long ago (at the point Network Rail, the ORR and the DfT were agreeing on what Network Rail should do between 2014 and 2019), electrification of key mainlines was a no-brainer. It ticked all the boxes – it chimed with the government’s infrastructure investment agenda, sat well with environmental priorities, and opened the door to much needed new rolling stock orders. And the icing on the cake – the business case stacked up too.
Flash forward a few years and suddenly things don’t look so rosy. The projects are delayed, and so to ensure there are trains available to run on key routes like the Great Western Mainline (where new homes have already been found for the existing fleet when the current lease expires) and that a brand new fleet of trains doesn’t end up sat in the sidings until electrification is complete, the government has to do some speedy negotiations with manufacturers to switch the shiny new electrics rolling off the production line in Newton Aycliffe to slightly less-shiny new bi-modes. Not only that, but it turns out that it’s going to cost more too – a lot more1.
Once the cost and time overruns became apparent, diligent officials across government would no doubt have been busily updating the original business cases for key electrification projects.
But by this time, ministers had cited electrification as the pillar of their investment strategy too many times to make rowing back a political option– no minister (least of all chancellor George Osborne at the time) was going to be responsible for pulling the plug, not least where projects affecting the Northern Powerhouse were concerned.
But that was the wrong decision. The cost and time overruns have near-destroyed the case for some electrification projects. On Great Western, once the decision to switch to bi-modes was made, the case for electrification of the final leg (Cardiff to Swansea) shrank – the marginal benefit of a shift to full-electric trains from bi-modes is much smaller than the benefit of moving from 30-plus year old diesel HST’s, and the cost of installing the electrification infrastructure needed to facilitate electric trains is far more than first thought.
As such, I was reassured recently when, as part of the planned HLOS2 announcement, and in a break from tradition, instead of announcing a host of exciting new infrastructure projects, secretary of state for transport Chris Grayling announced the substantial culling of major electrification plans including Cardiff to Swansea on the Great Western Mainline, the Midland Mainline and Windermere to Manchester Airport3.
That’s not to say electrification is a bad idea per se – on the contrary, it is critical for rail to retain its environmental competitive advantage over other modes of transport (most importantly the car and air travel). With the announcement last month that the UK government will ban sales of new diesel and petrol cars by 2040, that is going to become increasingly difficult.
The challenge is how to meet this challenge without remaining wedded to a delivery approach that is no longer viable. Rail electrification requires electricity to be provided to the train via either the track or overhead lines, with the latter being favoured for new electrification on safety grounds. But overhead wires are straightforward where the terrain is nice and flat and there are no tunnels and bridges – Network Rail owns over 25,000 of the latter4, an indication of the fact that rail in Britain doesn’t quite fit this utopian mould. So where does that leave us?
Contrasting rail and road is a good place to start – why has the government simultaneously announced two seemingly contrasting policies – how is it that electrification is good for road but bad for rail? One key difference is that cars can go where they like. Once the battery is charged, cars are not restricted to driving on ‘electric friendly’ roads (ignoring for a moment the need to re-charge). Electric trains relying on a constant power source enjoy no such luxury. That means that you can’t part-electrify a route without either a) requiring the other part to be served partly by diesel trains or b) using bi-mode trains (electric under the wire, diesel off).
So what can rail learn from road?
The most obvious response is batteries. This is not new –Vivarail has been developing battery train technology for a number of years using old London Underground stock. The government’s signal to the motoring industry is no doubt designed to give car manufacturers the confidence to invest heavily in developing battery technology for the mass market. Rail can piggy back on that research.
Making rail more environmentally friendly, reducing journey times (through increased acceleration) and improving the comfort of travel are all good reasons to pursue electric trains. But it is critical to keep an eye on these underlying objectives – if new, more efficient bi-mode trains or battery technology can achieve these benefits more cost-effectively, or faster than installing overhead lines around the country – that is what should be done. Sticking dogmatically to the one means to an end and losing sight of the end is not the way forward. And we all know what economics tells us about not getting hung up on the sunk costs…
Katie-Lee English is a senior consultant at Oxera
1. According to the National Audit Office in 2016, the London to Cardiff electrification is expected to cost £1.2bn more than the originally planned £1.6bn. ‘Modernising the Great Western railway’, November. https://www.nao.org.uk/wp-content/uploads/2016/11/Modernising-the-Great-Western-railway.pdf
2. High Level Output Statement – the statement of what government wants to buy from Network Rail and the industry over Control Period 6 (CP6). Historically, this announcement has focused on major investments which will be funded over the period, but these were largely excluded from this announcement, partly as a result of the cost and benefit uncertainty which led to the issues with electrification.
3. DfT (2017), ‘Rail update: bi-mode train technology’. https://www.gov.uk/government/speeches/rail-update-bi-mode-train-technology