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Is the InterCity Express Programme dead? No, IEP is not quite dead. But it is fading fast. Like Dr Who, it would have to regenerate in a new and different form in order to survive, says Paul Clifton The government-commissioned independent report into the project’s value-for-money pulls no punches. Sir Andrew Foster, a former head of the audit commission, lays into the way the Department for Transport (DfT) handled the whole process, alienating much of the rail industry as it went, and failing fully to consider cheaper alternatives. In simple, straightforward language, it is a damning indictment of the way the DfT operates. The result: a scheme of perhaps £7.5bn is kicked into the Comprehensive Spending Review, due in October. We can expect the government to crush a whole range of expensive schemes in one big hit, on the grounds that the nation simply cannot spend money it has not got. This would be one of the biggest: the end of a project trumpeted by the old government as the UK’s most significant investment in rolling stock for more than 30 years. In the meantime, the value-for-money of the Hitachi order will be assessed once again. So what went wrong? Foster concludes that it is ‘a mould-breaking initiative’. In a 41- page report, he describes it as ‘ambitious and forward-looking, seeking to bring together a range of financial, technical and passengerexperience elements not brought together in this way before’. He says the deal with Hitachi could prove ‘transformational’ and he praises the confidence of the manufacturer in its product, and its willingness to take on commercial risk. From the DfT perspective, he says, the financial incentives are unusually well-aligned with the desired outcomes. That is about all the praise Foster has to offer. Of course, the timing was bad. IEP was conceived five years ago, and the economic circumstances have changed. Projections of future passenger numbers are lower than before. Rail policy changed too: electrification of the Great Western was proposed. ‘The programme currently looks rather different from the original plans’, as the report succinctly puts it. Although IEP still has an acceptable benefit:cost ratio showing value-for-money, it is now significantly lower than originally predicted. Instead of being ‘exceptionally high’, it is now on ‘the threshold of mediumto-high’. The bi-mode variant of the train is singled out: ‘There are no long-distance high-speed intercity bi-mode trains operating anywhere in the world, and the UK rail industry does not appear to be supportive on the concept.’ Foster suggests that ‘we should be learning more energetically from international experience and expertise’ – a polite way of pointing out that the UK government has been heading up a blind alley, and no-one else is following. ‘A number of experts have doubts about the bi-mode’s likely performance, particularly in the hillier off-wire regions where they will be called upon the most.’ In fact, Foster found that some journey times would actually be longer using the new trains, compared to today’s 30-year-old stock. He repeats what the industry has long warned. He says that the key IEP objectives of increasing both train and network capacity may not be realised, because the trains are to be shorter than envisaged and with a lower performance than first proposed. He finds that on the Great Western, IEP would, in some cases, result in fewer seats being available than there are today. And the timetable would require almost 100 per cent utilisation of the network’s capacity, putting ‘unsustainable pressure’ on day-to-day operations. Most importantly: ‘No Plan B is seen to have been convincingly sought or specified.’ So if IEP is to die, what is the alternative? Refurbishing the current fleet of inter-city trains to continue until 2030 is seen as both technically feasible and cost-effective. By then the trains would be approaching 60 years old. Great Western’s most recent refit ‘Foster found that some journey times would actually be longer using the new trains, compared to today’s stock’ PAGE 22 AUGUST 2010
Rolling stock of HSTs was designed to last only until 2013-2015. It could be coupled with a ‘pick and mix’ approach towards buying off-theshelf electric trains that are already in service around the world. ‘Existing stock will need to be replaced in the short-to-medium-term. Their specification would ideally allow manufacturers to tender a development of their existing product range.’ Music to the ears of Bombardier, Siemens, CAF, Alstom and the Chinese CSR. They could be back in the game. ‘It seems likely that more than half of the benefit on the East Coast route, and probably around three-quarters of it on the Great Western routes, could be captured for between 40 per cent and 60 per cent of the cost.’ Now to the really illuminating conclusions and recommendations. They are spot-on in line with the observations of Rail Professional over the last year and, indeed, the industry in general. ‘In particular,’ says Foster, ‘there is a pressing need to ensure that experienced railway engineering managers, with commercial experience, are actively involved in the key decisions of the procurement process.’ Ouch! So the DfT should employ people who know what they are talking about, ‘and reduce its reliance on external advisers’. Michael Roberts of the Association of Train Operating companies says the government has spent £21m in consultancy fees since 2005, ‘and has so far failed to produce a single train.’ The report concludes that buying alternative trains ‘could provide sufficient benefits… with a lower cost and risk profile than IEP. These alternatives warrant serious scrutiny.’ So the report is saying the DfT was so focused on its narrow pursuit of a one-sizefits-all brand new bespoke design that it didn’t bother to see cheaper, simpler, quicker solutions. So complex was the discussion with Hitachi after it won preferred-bidder status that Foster admitted: ‘my team and I sometimes struggled to make sense of the multiple changes to programme specification, and their effect on the BCR upon which value-for-money is based.’ In 2009 when Hitachi was named preferred bidder, the order was for 10-car and five-car trains. It now includes seven, eight and nine-car formations. ‘In short, there is a good deal about the programme as it stands that is unresolved, unproven, uncertain and carries risk.’ In the private sector, a report this critical of an eye-wateringly expensive, 30-year project would, without doubt, lead to the sacking of the chief executive and the resignation of the board directors responsible for such massive errors of judgement. Understatement ‘There are,’ says Foster with polite understatement, ‘some issues around DfT’s management approach and its engagement and communication with the railway industry. ‘In summary, industry stakeholders feel unengaged and distanced from IEP.’ Put another way, he believes civil servants in Marsham Street simply did not pay attention to what rail professionals at First Great Western, Atoc and Network Rail were telling them. It had all started out so well. When the project was called HS2, the level of consultation with train and track operators was well-regarded. ‘The turning point is felt to have been the launch of formal Artist’s impression of Hitachi’s design, for which Agility Trains was named preferred bidder AUGUST 2010 PAGE 23
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