Minister admits value for money of electrification of Great Western line is now 'not great'
Jo Johnson was challenged on the benefit-cost ratio of the controversial electrification project
David WilliamsonPolitical Editor
Transport minister Jo Johnson has admitted that the value for money of the modernisation of the Great Western rail line is now "not great".
The soaring costs of the flagship infrastructure project led to the cancellation last year of plans to electrify the Cardiff to Swansea stretch of the line.
Newly appointed Mr Johnson appeared before the Westminster's Welsh Affairs committee and was challenged that the benefit-cost ratio of 1.13:1 meant it was now a "low value for money" project.
Mr Johnson said: "It's not great," adding: "As it stands today it's still generating a net present value of over half a billion pounds but obviously that's on the back of a very substantial investment of around £5bn or so. It's not a massive return on that investment."
Newly appointed Transport Minister Jo Johnson gave a frank account of what had gone wrong with the electrification upgrade (Image: Parliament TV)
He said the Department for Transport had learned "that we need to make sure that the cost of these projects is properly bottomed-out before we commit to them" and that it "needs to monitor Network Rail much more closely".
The National Audit Office reported in 2016 that the cost of the modernisation had soared to "£5.58bn, an increase of £2.1bn since 2013". Journey times between Cardiff and London are due to fall by 15 minutes.
Mr Johnson said costs had been "blowing out of control," stating: "[The] bald truth is their estimates were massively wrong. We had to reset the programme in 2015 as a consequence when we realised how wrong those estimates were."
Plaid Cymru Westminster leader Liz Saville Roberts challenged Mr Johnson about the need for rail investment in Wales, describing it as the "poorest nation in the United Kingdom".
She said passengers see a "steady deterioration in the quality" of transport as they travel further into Wales.
Electrification work underway inside the Severn Tunnel
The Dwyfor Meirionnydd MP made the case for "desperately" needed investment, saying: "Wales has 6% of the rail network, 5% of the UK population and only receives 1% of rail infrastructure funding."
Mr Johnson said: "The department looks at all potential transport investment systematically across the country and where there are strong cases for investment they go forward for consideration. The lessons that we are learning from the examples [that] haven't worked are that we need to have a much tighter grip on capital allocation through Network Rail. That's become much more relevant in an environment in which Network Rail's borrowings are on the public books, which they weren't when programme was set out earlier on."
The new vision that sees Cardiff Central railway station transformed
The minister appeared alongside Brian Etheridge, director of network services at the Department for Transport.
When asked what he would do differently, he said: "We would advise a minister not to go public on expectations, delivery dates, scope and cost without giving us the opportunity to work those thoroughly through... We were dealing in immature schemes which were not thoroughly worked through.
"People had not understood the implications of these in terms of delivery times and costs and we can now see the complications and potential damage that that causes."
Committee chairman and Monmouth Conservative MP David Davies suggested the project had been a "complete shambles".
It is hoped that the upgrade of the London to Cardiff stretch of the railway will be completed this year.
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Great Western Main Line
Liz Saville Roberts