Trams to run on rail network project now five times over budget, two years behind schedule

Modification of the rail network for the UK’s first tram-train project has run five times over budget, a public spending watchdog has found.

Network Rail’s work in South Yorkshire will cost £75.1m, compared with an initial estimate of £15m when the Sheffield-Rotherham scheme was first approved in 2012, according to the National Audit Office (NAO).

In July last year, the Department for Transport’s then-permanent secretary Philip Rutnam recommended the programme should be cancelled amid rising costs to save at least £20m, but Rail Minister Paul Maynard insisted it should continue, the report said.

Tram-trains were due to begin running on street tracks and railway lines in December 2015, but the project is at least two-and-a-half years behind schedule.

It is intended to be a pilot scheme to test the concept for possible wider roll-out across the UK to reinvigorate under-used rail lines, improve access to city centres and release capacity at mainline stations.

Modification of the national rail network is part-funded by the Government and managed by Network Rail.

Outgoing Liberal Democrat leader Tim Farron described the project as “a total disaster from start to finish”.

He said: “The fact they can’t keep control on a flagship scheme like this shows what a total sham the Northern Powerhouse really is. This report is an auditor’s version of a character assassination. It is utterly damning.”

The NAO found that the DfT initially accepted the programme’s financial benefits were uncertain and the Treasury gave it the go-ahead in May 2012 on an exceptional basis to allow a more detailed evaluation of the value for money of tram-trains.

Cost increases were blamed on a number of issues such as the work being more complex than expected and the condition of railway infrastructure being worse than initially assumed.

A number of Network Rail projects have been blighted by cost overruns and delays in recent years, with disruption to the electrification of the Great Western, Midland and TransPennine routes.

The DfT claimed the tram-train project will “transform services for passengers” by enabling faster journeys and reducing congestion.

A Department spokeswoman said: “There will be uncertainty when developing new innovation and technology and we are disappointed that the cost of work increased and the scheme was delayed.

“But this ground-breaking project is now on track and Network Rail has learned important lessons that will help the roll-out of similar schemes that will bring all of these benefits to more passengers in the future.”

Rob McIntosh, a route managing director at Network Rail, said: “Costs and timescales have moved as the project itself has grown in scope and complexity and has had to incorporate more significant infrastructure changes than originally planned.

“Good progress is being made and a new project team is now in place and driving the scheme to its conclusion.”

In May it was revealed that Hitachi had started work in Japan on constructing 65 new trains for use by Virgin on the East Coast main line. 

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