Borders Railway Finally Derailed?

I've just got hold of the Due Diligence Report into the Borders Railway prepared by Cyril Sweett and it makes far from sweet reading for those who have supported the project with such fervour. Yesterday the information I had came from the Sunday Herald article but in the full report there are even more damning indictments of this crackpot scheme.

• No provision within the programme to secure and undertake the necessary modifications to link the existing Network Rail track to connect to he Borders line. Nor is there even any time allocated to this task.
• The cost estimates appear understated by approximately . . . the figure is blacked out. • The programme is overly optimistic • The management of risk is logical but the financial provision is low.

In the business case analysis things go from bad to worse.

• Mathematical and methodological errors are found in the business case
• They urge caution over the economic benefits
• There is unexplained growth in the railway's patronage up to 2016, so much so that they exceed the capacity of the railway
• Given the optimistic traffic forecasts it is worrying when they are allied to significantly higher capital costs.

This is the closing paragraph in the report that is better seen than reported (click to enlarge)

If the train was hitting the buffers this report is in danger of derailing it. Given the economic climate, the recent history of schemes that are over budget and over burden the electorate, surely it's better to stop this madness now rather than just push on blindly in an act of hope of reality? This railway has always been unfit for purpose. A cut price solution aimed at justifying the building of new homes against a background of an ill thought through economic plan by a bunch of enthusiastic amateurs. The above picture from the report is surely proof of that? All too often people find it hard, having committed themselves to something, to change tack. There needs to be leadership from the Scottish Government to stop what is, on paper, a good idea that is being addressed by the wrong solution.

Is The Border's Railway Going to Hit the Buffers?

So the plans for the Border’s rail link are flawed! What have we been saying for years? According to a report obtained under FOI, “significant mathematical and methodological errors" are included in it as well as "inappropriate application of economic techniques". Now a first year statistical student or transport planner on a university course could have told them that, so why has the whole thing continued to be pushed through by Scottish Borders Council, Holyrood and applauded by a number of MSPs who ought to know better? Well of course it’s politics isn’t it, nothing to do with what is really right for the Scotland, the Borders or the people that live here.

The latest report into the folly of the ‘tram to Gala was compiled by Cyril Sweett, a London-based international construction and property consultancy. The report highlights the fact that the costs of the project had been underestimated, the management had been inadequate and vital information is missing. "The technical and financial elements of the business case are not considered as robust as they should have been. They go on to say that "a number of potentially significant flaws", are contained in the plan and it is. " Overly optimistic and not robust in its structure." This includes,

• The cost of land or the effect of inflation.

• No provision seemed to have been made for buying land necessary for connecting the Borders line to existing tracks.

• The rail link plan rested on "significant unexplained growth" in demand for new homes in the Borders, the report argued.

• Assumptions implied rush-hour trains would become overcrowded, with some expected to be carrying double their maximum capacity by 2035.

Perhaps most astonishing of all are reports in the Sunday Herald that quote a member of the Waverly Trust who are supporting the line’s reopening.

"Many of the criticisms in this report are valid. We've long had doubts about the way this scheme has been managed. To survive and prosper the Borders rail link needs to be rethought, and we're hopeful that under the new management of Transport Scotland that will happen."

So here we are then, the Waverly Trust helped push through a scheme they thought was flawed, probably knowing full well that if the correct figures and information were laid before Holyrood et al then it would have hit the buffers before we even got started. However, according to a Transport Scotland spokeswoman. “The report did not reflect the most up-to-date information, for example on patronage levels, train timetabling and expected housing developments.” So why didn’t Transport Scotland give them the most up to date informant having commissioned them to do the report? Apparently the agency therefore overhauled the business case, which improved the project's cost/benefit ratio. "

In my world that means they fudged the numbers.

The absurdity of this situation is beyond belief. We have a plan approved by parliament based on dodgy numbers. When it final gets under way the budget will be way over the £295 million that they are currently working on. The obvious questions about how on earth can this project make money remain. Even more so given the revelations that the railway line has passenger forecasts that are way too high. Don’t forget, even with the high passenger numbers it was still set to fail to cover its operating costs.

In 2000 the costs of restoring a railway to Tweedbank was estimated at £73m. When MSPs voted to restore it in 2006 the costs quoted were £155m. Next we were told that the costs will be £178M - but don't worry. According to local MSP Jeremy Purvis "detractors of the rail project had been proved wrong, and maintained: It will be delivered on time and on budget." Apparently the reason for the increase were due to a, "much more detailed technical assessments. These identified that significantly more work was required on structures such as bridges and tunnels than originally estimated. In addition, costs have increased due to general increases in track, signaling, earthworks and other factors such as environmental mitigation, some land acquisition and design and management. In addition to inflation, there are also new costs such as landfill tax that has now been built into the revised cost estimate. 


When the scheme was approved the SNP Transport Minister Stewart Stevenson said the cost had increased because of additions such as an extra station at Stow. Increasing land costs and extra strengthening work on bridges on the line.

All this proves it’s a railway built on the politics of creep. Many people have a vested interest in seeing this line built because it supports their political aims, they have investment riding on the project, jobs depend on it and egos are at stake. However, whether or not it’s a good thing for the Borders, and Scotland seems to be getting lost in the mix. We need to stop this madness and the latest report is a timely reality check.

The Waivering Waverley Line?

Does anyone really know what's happening with the Waverley line? Time just seems to drift along, all we hear are rumours about rising costs coupled with a quirky financial plan to get private investment into something that’s unlikely to ever give investors a return. How does this all make sense? Any hope of seeing this line built and operating by 2013 or 2014, even if someone is foolish enough to invest in the project, must be out of the question. In the meantime all that is happening is mounting expenditure, to which I assume Scottish Borders Council is contributing. This vanity project needs to be stopped and sensible thinking about the transport needs that are required across the Borders should begin. What sort of sophisticated bus network could have been operating by now with the many millions that have been spent on the folly of ‘a tram to Gala’?

How To Finance a Railway

Is it that politicians think they can somehow defy the basic principles of business just by speaking or am I missing something? Then again maybe once they enter the rarefied atmosphere of government they somehow stop having rational thoughts. Well it certainly seems so with what is going on with the Borders rail project. According to reports in the media this week, Stewart Stevenson, the transport minister, is “heartened by the response from firms who saw the project as an excellent investment opportunity”. The proposal for a private/public partnership that would plough profits into community projects ranks up there with the Darien scheme of the 17th century as a triumph of hope over reality.

The cost of the line is estimated at somewhere between £235 and £295 million – an awful lot of investment. To get any kind of return on this investment the line has to carry enough passengers to cover the train operator’s costs and other costs which is where there appears to be a fatal flaw in the scheme. The last figures I’ve seen indicate operating revenues of close to £7 million per annum. What will the profit be on this level of revenue? The answer is very little. Let’s look at the potential for upsides.

If £7 million is the annual revenue that would probably be somewhere in the region of 560,000 passengers at an annual one way fare of £12.50. That’s a little over 1500 passengers a day – there will be a lot less at weekends. It certainly puts into perspective the scale of the business opportunity. Let’s assume they do 50% better than they predict in passenger numbers. Let’s also assume that the £7 million in revenue covers their operating costs – total pie in the sky but stick with this. As in any transport business extra passengers do not come at the average yield they are generally produced by competitive pricing. Therefore an additional 280,000 passengers per annum might produce additional revenue of £2.8 million. Given the construction costs then it would take a month or two under 85 years just to pay back the construction costs without any consideration being given to interest charges….and the small point of the private investors wanting to make some money.

No doubt there have been enquiries to the Scottish government from the private sector about this ‘opportunity’ but quite how anyone could see a sensible business case eludes me. Or am I missing something?

Non Profit Vehicle

The capital costs of the Borders railway, which are between £235m to £295m, are to be funded by an aptly named "non-profit distributing vehicle" (NPD). This apparently means that the cash will be borrowed from the financial markets. It will be repaid by annual charges met from the budgets of the national agency Transport Scotland, and with contributions from councils.

Now all this sounds very simple but it is potentially a huge financial hole for Scottish Borders Council. With funding apparently capped at £30 million it is potentially good news for the Scottish Borders Council but the risk to tax payers is huge. The fact remains that the forecasts of passenger numbers are very superficial, with a whole lot of assumptions that will make operating profits very unlikely. Given the continually rising capital costs of the project then the whole scheme could become a millstone around everyone's neck. How many of these NPD's have been tried on projects like this?

While the Borders party is dedicated to every aspect of Border's life there's no escaping the fact that the Waverley Line is skewing the thinking of the council and many other organizations. Our continued opposition to it must remain as a core policy.

Waverley Rail Project Dead & Buried

You'll be amazed to know that the Waverley Rail Project has issued a press release; it's first in five months. In it they tell us that 'The Waverley Railway Project is on track to re-establish a passenger service from Edinburgh through Midlothian to Tweedbank in the Scottish Borders.'

Slight problem here. Work on construction is supposed to start this year. Any sign of it happening? First trains to run by 2011?

They also say. 'As a result of the planned change in Authorised Undertaker to Transport Scotland, Scottish Ministers are conducting a due diligence exercise, at the end of which they will state the way forward for the railway.' Does the appointment of an undertaker mean the project is dead and buried?

Funnily enough still no mention of a revised budget. Makes you wonder how much has already been spent on consultants and other preparatory work.

Rail link will do more harm that good – scrap it before it's too late

This is Nicholas Watson's piece published in the Scotsman's Comment section on Friday 8th February.

So, the ungrateful natives of the Borders don't want the railway? At a recent meeting, SNP MSP Chris Harvie's motion in favour of re-opening the Waverley Line was defeated by 206 votes to 67.
How can this huge majority have been hidden behind Scottish Borders Council's claims of "overwhelming support"? Simple: this, at last, was a public debate, widely-advertised, open to all and in stark contrast to the process that has excluded many people with genuine concerns. The debate's results should not be ignored.

This was not a battle between good, train-loving people and the wicked tarmac lobby: the two sides' aspirations for the Borders are probably much closer than it seemed. We all like trains and we all care for the future of our planet. However, detailed scrutiny of the Waverley project reveals a scheme that will do more harm than good.

A train service taking more than an hour from Tweedbank to Edinburgh is useless to all but a tiny part of the Borders around Galashiels. Passengers on a slow, inconvenient and underused service would be right at the top of the carbon footprint scale, and top of the public-subsidy scale, too.

If we are serious about improving public transport, then we must remove sentimentality from the process. A first-rate, flexible bus service connecting our towns and villages to each other as well as to Edinburgh, and serving the whole of the Borders, could be provided at a fraction of the cost to the environment and to the public purse.

Delivery of the Waverley Line is tied to a very damaging pattern of development, which threatens the vitality of places such as Hawick and Jedburgh, as much as Galashiels itself.

Are ministers aware that Lochcarron Mill, described to the Waverley Bill committee as Galashiels' prime tourist attraction, has been demolished to make way for a new retail park, which is proudly supported by the Waverley project?

Even steam enthusiasts are troubled: steam specials are not on the menu – no turntable is planned at Tweedbank.

The proposed line cannot carry freight. Calls for freight services to the Borders are minimal, but the strongest case for extending the line to Carlisle – the prospect of relieving the main north-south lines of freight traffic – has been extinguished.

Many of the 17,200 who petitioned parliament for the return of real Waverley Line now feel betrayed.

Even the sensible option of building only the northern part of the line to Midlothian has been spitefully prevented by clever wording in the bill.

Full marks to the government for commissioning a due- diligence review.

Some MSPs may be indifferent to rising costs, and ill-briefed on both the scheme's detail and its wider consequences, but others recognise the environmental and financial folly of the Waverley Line, and we call upon them to talk to ministers before it is too late.

There is no need to fear losing votes: the present scheme is, regrettably, flawed. Borderers would welcome its rejection.

The Great Railway Debate - Result

News of the debate has spread far and wide across the land and not just the Borders. Curret;y exiled in Sheffield for 48 hours I can bring you the result.

The motion - “That the proposed rail link between Edinburgh and Tweedbank should proceed.”

For: 67

Against 206

First Public Debate on the Waverley Line.

The first public debate on the return of the controversial Waverley Line will take place in the Borders next week.

Scottish Borders Councillor Nicholas Watson and Christopher Harvie MSP, both known for their passionate views on the project, are preparing for the debate which will also involve input from the audience. Jack Clark, Managing Director of John Swan Auctioneers, Newtown St. Boswells, will take the chair.

Nicholas Watson says “The only real debate about the return of the Waverley Line seems to have been in the pages of the local press. At last we can have a public debate and we’re very grateful to Chris Harvie for his willingness to take part, and to Jack Clark for agreeing to see fair play. Everyone is welcome, especially if you haven’t made up your mind yet. This is a rare opportunity to ask questions and hear both sides.”

Professor Chris Harvie, of the Scottish National Party, has long been an advocate of traveling by train and has close links to the Campaign for Borders Rail.

The debate will take place on Wednesday 16 January in the Village Hall in St Boswells, (next to the bus station). The meeting is open to members of the public and starts at 7.30pm. There is no entry fee.

The event is organised by The Borders Party, which was founded in the Autumn of 2006. Nicholas Watson is leader of the new party and opposes the return of the Waverley Line, claiming it can only serve a tiny part of the Borders, that it is driving a damaging pattern of development and is a colossal waste of public money. “Good planning,” says Watson, “is about relating development to local needs and local employment. Planning for people to live forty-odd miles from their place of work is sustainable development turned on its head. Hardly anyone in Holyrood seems to realise how unpopular the Waverley Project is in the Borders.”

Waverley Line - The Latest Attempt At A Fudge...

According to today's Scotsman the Waverley line could be the first in Britain to be run separately from the rest of the rail network, under radical plans to bridge its funding gap. Apparently the Scottish Government is considering whether the line should be built, financed and maintained by a single company - rather than handed over to Network Rail when it is completed.

Reopening the 31-mile line, which closed in 1969, is a contender to be the first project carried out under the SNP's Scottish Futures Trust, a non-profit version of the private finance initiative. It is thought this could be cheaper than traditional government funding. The estimated cost is £174 million, but The Scotsman reported in September that this had risen to nearly £200 million. Most of the funding is due to come from the Scottish Government. Stewart Stevenson, the transport minister, said in June the funding package "will not be sufficient to deliver the project" and the planned opening date of December 2011 "is not achievable". Construction has already been put back from 2008 to 2009.

Meanwhile the review of the project by Transport Scotland, which was expected to be completed in September, is still under way. According to an agency spokesman. "We are examining the funding and procurement of Borders rail and considering non-profit distributing models, such as the proposed Scottish Futures Trust. It would be a value-for-money decision, and the winning bidder would build and maintain the railway for a pre-determined period."

It strikes me that the Government in Holyrood are up a bit of a gum tree. The costs are out of control and they're desperately tying to find a way to get the project financed out of their tight budget - which will be impossible without some kind of investment. Anyone with half a brain can look at the proposed passenger forecasts to tell that there is no way that the line can make any money - so an investor in whatever form is going to be hard to find.

It's never going to happen....

Waivering About The Waverley Line

According to the BBC, Scottish Borders Council (SBC) has set up a new group under a local councillor to "tackle the shortage of affordable homes in the Scottish Borders.". The report says "average property prices were now running at eight times the average salary in the area. The proposed reopening of the Waverley Line has also driven up housing demand." It goes onto say that Eyemouth has seen some of the sharpest increases in the UK with prices rising 82% in three years.

Well Eyemouth is 48 miles and around an hour and twenty minutes away from the central Borders terminus of the Waverley Line, so the railway has little or no affect on prices. The fact is that house prices in many areas of the Borders are driven by four factors. The ease of commuting to Edinburgh (by road), the attractiveness of the lifestyle, coupled with prices, for people moving from the south of England in particular and the opportunity for people to buy second properties here in the Borders for holiday homes. Last, but by no means least, is the fact that the ripple effect from Edinburgh as people move out to get cheaper housing has driven prices at a faster rate, off the lower base price that Border's housing enjoyed (?) for many years.

According to the councillor in charge of the new group. "The average income has to be multiplied by eight times to allow somebody to buy a house round here given the average house prices. We are going to have a wide-ranging look at what other people in other parts of the country are doing. We're going to get examples of best practice and nothing is off the table, in coming back to council, so that we can get some fresh ideas and see what we can do to make a real difference to this major problem."

Well good luck, but unless the council take control of the supply of affordable rental housing then there's little hope of any change. Developers who are building new homes for sale have no imperative to supply affordable housing, whatever that means, and so in general bigger, more profitable housing is built.

As for the railway line boosting things it's even more doubtful that it is going to be built. Having said that nothing is slowing down the expenditure on the project by SBC, a burden on the taxpayer and a diversion from the real problem. Meanwhile the Scottish government is saying no more money can be allocated to the project. All this is against a background of everyone knowing that the budgeted figures are way too low. It is disingenuous of the council to be ploughing ever onwards, probably diverting money from other schemes across the Borders, to support the white elephant of a railway line that is unfit for purpose.