Cost escalation of light rail schemes

[mrmartin]

I was amazed to see the proposed DLR to Thamesmead has an estimated cost of up to £1.2bn (or more).

The Woolwich Arsenal extension in 2009 cost £180m - https://tfl.gov.uk/info-for/media/p...ry/mayor-unveils-dlr-woolwich-arsenal-station

The Mayor of London, Boris Johnson, today officially opened a £180m extension of the Docklands Light Railway (DLR) to Woolwich Arsenal, which delivers another vital north-south link across the Capital.

To my untrained eye, these two schemes look very similar in so much as having an underground aspect under the Thames and being nearly the same distance (2.5km vs 3km). Admittedly the newer scheme has two stations.

However I can't see how we've had a near 10x cost increase in 15 years.

I'd be really interested if people knew a breakdown of where the cost increases have came from on projects like this, or are they really such different schemes?

 

[edwin_m]

If I have my maths right, it's increased by a factor of 6.67 and that works out at about 13% inflation per year compounded up. In some of the intervening years inflation has been close to that, but construction prices have generally run ahead of general inflation. Reasons may include increased safety standards and increased wages for specialised workers, particularly after Brexit now it's less easy for them to move from a European project to a UK one.

The scope of the contracts may also be different - if a period of maintenance is included in the price then this will increase it considerably. Woolwich did include maintenance but I don't know if that element was within the £180m you quote.

 

[Haywain]

Reasons may include increased safety standards and increased wages for specialised workers, particularly after Brexit

There was also a significant increase in costs around Covid and the Ukraine war, which has particularly affected materials such as steel and energy costs but also impacted labour costs. With Brexit it’s a sort of triple whammy.

 

[Mcr Warrior]

Seem to recall that the Edinburgh tram system came in significantly over budget when it eventually opened a decade or so ago. Anyone in the know on here able to precis what had gone wrong with the original costings?

 

[stuu]

Also worth noting which year the prices are in. The Woolwich section was contracted in 2005 so that may well be the year the cost was fixed, so it's nearly 20 years of inflation.

 

[Ken H]

There was also a significant increase in costs around Covid and the Ukraine war, which has particularly affected materials such as steel and energy costs but also impacted labour costs. With Brexit it’s a sort of triple whammy.

Cost of timber has risen a lot. Important for concrete construction as shuttering.

Many trades people make more money on domestic work. Our village seems to be busy with renovations and repairs all the time. Much cash in hand.

 

[edwin_m]

Seem to recall that the Edinburgh tram system came in significantly over budget when it eventually opened a decade or so ago. Anyone in the know on here able to precis what had gone wrong with the original costings?

Seemed to have been a combination of problems with utilities and bad management of same. Compare and contrast the Metrolink extensions around the same time, when they got about four times as much tramway for twice the money. The secret there was probably to have a rolling programme with the same contractor throughout.

 

[Haywain]

The secret there was probably to have a rolling programme with the same contractor throughout.

I'm sure that the failure to have any sort of continuity is a major issue for such projects in this country (see also railway electrification), even moving from city to city would provide benefits

 

[mrmartin]

If I have my maths right, it's increased by a factor of 6.67 and that works out at about 13% inflation per year compounded up. In some of the intervening years inflation has been close to that, but construction prices have generally run ahead of general inflation. Reasons may include increased safety standards and increased wages for specialised workers, particularly after Brexit now it's less easy for them to move from a European project to a UK one.

The scope of the contracts may also be different - if a period of maintenance is included in the price then this will increase it considerably. Woolwich did include maintenance but I don't know if that element was within the £180m you quote.

There hasn't been a single year that "general" construction cost increased has increased at that rate: https://www.statista.com/statistics/1308264/construction-output-price-index-uk/

What explains this huge gulf? There must be a more detailed breakdown of the 'statement of work' for each project which you could compare.

 

[Gostav]

Today’s high safety standards have also pushed up construction costs. For example, the practice of using emergency doors at the ends of trains with narrow tunnels is no longer allowed. Instead, the gap between the train and the tunnel must provide sufficient evacuation space, which means that the tunnel limit must be large and more expensive.

 

[mrmartin]

Today’s high safety standards have also pushed up construction costs. For example, the practice of using emergency doors at the ends of trains with narrow tunnels is no longer allowed. Instead, the gap between the train and the tunnel must provide sufficient evacuation space, which means that the tunnel limit must be large and more expensive.

On this video you can see that the tunnel has a walkway on the woolwich arsenal tunnel

== Doublepost prevention - post automatically merged: 26 Aug 2024 ==

If I have my maths right, it's increased by a factor of 6.67 and that works out at about 13% inflation per year compounded up. In some of the intervening years inflation has been close to that, but construction prices have generally run ahead of general inflation. Reasons may include increased safety standards and increased wages for specialised workers, particularly after Brexit now it's less easy for them to move from a European project to a UK one.

The scope of the contracts may also be different - if a period of maintenance is included in the price then this will increase it considerably. Woolwich did include maintenance but I don't know if that element was within the £180m you quote.

The other problem with this btw is that if this continues (and I can't see any sign of it slowing down?) in 10-20 years time the next 3km DLR extension will cost £10bn+. Seems mad that so little attention is paid to this in the scheme of things - its more "too expensive, we shouldn't build it" rather than "why is it so expensive"

 

[ScotGG]

Yep that cost has far outstripped inflation even accounting for the recent past

Also odd as the Woolwich Arsenal extension had to be built beside a busy existing railway and offers interchange which requires extensive capacity to handle flows including bridges and sufficient lifts. The proposed DLR to Thamesmead doesn't link to any other station.

 

[edwin_m]

Thamesmead cost probably has "optimum bias" added. At the stage it's at, that's probably over 50%.

 

[Bald Rick]

as @edwin_m hinted, much of this will be because of very different cost price bases, and the level of risk provision.

Stations are pricey too, especially if they have to be underground.

 

[eldomtom2]

This thread on a recent think tank report on high construction costs is probably relevant:

Report from Britain Remade think tank on reducing tram construction costs

Another report from a think tank, this time from Britain Remade, a vaguely right-leaning think tank that mainly consists of self-proclaimed "YIMBYs". This one focuses on the construction costs of tram and light rail projects, arguing that their costs are far too high...

www.railforums.co.uk

They primarily blamed a lack of standardisation, slow planning procedures, and excessive utility relocation.

 

[Haywain]

They primarily blamed a lack of standardisation, slow planning procedures, and excessive utility relocation.

Which accounts for high costs but not for cost increases.

 

[Bald Rick]

Worth looking at what has happened in Liege. Various articles on line.

 

[Tetchytyke]

It's not a peculiarly British problem, as @Bald Rick says, look at Liege. That's been estimated as now costing EUR 82M/km.

Whether construction companies have the correct incentives to keep costs under control when they know they hold all the cards, who knows. Colas in Liege managed to extract another EUR 79M plus an uplift in annual fees from the government by threatening to walk away. Colas certainly weren't taking the haircut on that mistake.

 

[eldomtom2]

It's not a peculiarly British problem

Well, as said before, there's a difference between cost increases and cost differences between countries. 82M Euros per km is 69M GBP per km, which actually compares favourably with a lot of recent UK tram projects.

 

[stuu]

Well, as said before, there's a difference between cost increases and cost differences between countries. 82M Euros per km is 69M GBP per km, which actually compares favourably with a lot of recent UK tram projects.

Absolutely. The current project to extend the West Midlands trams to Dudley is heading towards £100m per km and it is mostly an old railway so has few issues with utilities and traffic management. The city centre routes have cost much more, and they are more sensible comparisons for the Liege project

 

[signed]

I don't really know whether it's a British only problem, but it seems to be very much concentrated in the Anglosphere as a whole (when I hear the price on some tram projects in the US/CAN, it's really bad).

Belgians already have massive issues with the white elephant line 3 of the Brussels Metro (RTBF even did a 45min documentary about the massive joke of a project)

I don't know why our infrastructure in France is that much cheaper, but it is :

Rennes' light metro line b, fully grade-separated with both viaducts and tunnels costed €1.3 billion for 14km of track, 15 new stations and 25 CityVAL trains (I don't know whether that figure also includes building three whole Park and Ride locations). Which doesn't sound to be that outrageous.

Paris Tram 9, for infrastructure only is ~400mil for 10km of track, which makes it €40m/km.

Granted not everything is shinier here, far from it

- the Rennes metro B was an absolute disaster at launch and had to be stopped for nearly a year, both after it was discovered that they under-designed the electrical supply leading to a power panel exploding. Followed a few month later when the trains had to be shipped across the country to replace a part of the bogey that cracked

 

[stuu]

The Rennes issues seem to be caused by being the first to use the Neoval design, so I would hope the costs sit with Siemens. The Brussels plan to tunnel through the basement of a massive building seems utterly bizarre, have they figured out what to do yet?

 

[signed]

so I would hope the costs sit with Siemens

Only the cracking parts.

The electric panel exploding is a matter of under-dimensioning, so it's on the taxpayer