HC 296 Public Accounts CommitteeWritten evidence from the Thameslink Programme

In Q102 Michael Hurn was asked about the financial savings achieved from the changed plan for London Bridge station. The query came in the context of Michael’s explanation in response to Q101 that the overall cost estimate for Key Output 2 (KO2) at its worst had been over £600 million over budget. In the discussion after Q109 Michael took the opportunity to clarify that the savings at London Bridge mostly concerned the track around London Bridge rather than the station itself.

The Department can provide an explanation for the specific savings attributable to changes at London Bridge, as set out below. All figures are provided with an outturn cost base to be consistent with Michael’s answer to Q101 which was referring to an outturn figure.

The Rev 20 estimate, produced in December 2009, contained the highest forecast cost overrun of £655 million against budget at outturn prices for the Thameslink programme.

In Rev 20 the work package for “London Bridge Station and Bermondsey Dive Under Civils” had an anticipated final cost (AFC) of £651,708,000 and the Work Packages for Railway Systems around London Bridge had an AFC of £594,140,000.

The overall Thameslink programme was back within budget—the Department’s focus—by the time of the Rev 37 budget produced in December 2010.

In Rev 37 the work package for “London Bridge Station and Bermondsey Dive Under Civils” had an AFC of £755,539,000 and the Work Packages for Railway Systems had an AFC of £407,995,000. The numerical difference in AFC for the work packages is therefore an increase of £103,831,000 for London Bridge Station and Bermondsey Dive Under Civils and a decrease of £186,145,000 for Railway Systems. This results in an £82,314,000 saving for the London Bridge area as a whole (taking both work packages together) and this corresponds to the approximate £100 million saving Michael Hurn referred to at the PAC hearing.

The Thameslink programme is now working to the Rev 40 cost estimate last updated in December 2012. This is a significant step forward from Rev 37 as it:

Is based on GRIP 4 (single option development stage) for constituent projects other than High Capacity Infrastructure.

Reflects the agreed planning permission received for London Bridge.

Is based on the final London Bridge track layout agreed with the train operators.

Is based on an agreed access strategy for the construction of the KO2 works.

Benefits from a full Quantified Risk Assessment.

Is supported by contracts reached with the supply chain (covering 76% of the value).

Has been peer reviewed within Network Rail and by EC Harris on behalf of the Department.

In Rev 40 the London Bridge Station and Bermondsey Dive Under Civils work package AFC is £735,238,000 and the Railway Systems (including the High Capacity Infrastructure Works to deliver the 24tph train service) work packages AFC is now £413,243,000, a further reduction of £15,053,000 from Rev 37. Of greater importance to the Department—the Rev 40 cost estimate as a whole remains within the budget for the programme.

I have confirmed all of the figures provided in this response with Network Rail.

David Blackall
Deputy Director

5 July 2013