The UK government’s auditors, the National Audit Office (NAO), has warned a new East-West route in the south of England runs the risk of costing more than the benefits it brings.
The East West Rail (EWR), which is designed to connect Cambridge in the East with Oxford in the West, is likely to cost upwards of £7bn ($8.7bn). The rail route was initially proposed alongside a new road project, with the ambition of attracting new business and housebuilding to the area.
Go deeper with GlobalData
But the road project has since been cancelled, and a new housebuilding policy has been implemented by the Department for Levelling Up, Housing, and Communities.
According to the NAO, this means “[g]overnment risks the planning for both projects being at cross purposes.”
“To maximise the economic benefits from its investment in East West Rail, government must ensure stronger strategic alignment between departments and with wider local growth initiatives, so that there is a shared, coherent vision for the future of the region, and the contribution that the East West Rail project will make to it is clear,” NAO chief Gareth Davies explained.
Meanwhile, the Department for Transport (DfT) has reduced the estimated cost-benefit outcome of the rail project. Instead of a return on investment of more £1.10 ($1.37) per every £1 ($1.25) spent, the Department now estimates only 30-60 pence (37-75 cents) per every pound spent will be earned back in direct benefit to the community.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“These assessments do not quantify the benefit from the wider aims of the project to transform the economy of the region. DfT has concluded, most recently in May 2023, that there is a strong strategic case for the project,” the NAO added.
But there is a further cost that has yet to be decided on, or incorporated into the cost-benfit analysis.
The DfT has yet to decide how the EWR rolling stock will be powered. According to the UK government’s net zero goals, diesel-only trains should be removed from tracks by 2040. But estimates suggest full electrification of the relatively short line would cost at least £1bn ($1.2bn), making the total cost around £8bn ($10bn).
EWR project management and DfT said they are exploring other options, including part electrification of the line. Alternative technologies, such as battery-powered trains, would likely add costs to the project.
The project has also been criticised by locals who said they do not feel EWR has properly communicated with them.
