British Construction Costs and Centralization
There’s an ongoing conversation in the United Kingdom right about state capacity and centralization. The United Kingdom is notable for how centralized it is compared with peer first-world democracies of similar size. It also has weak state capacity on matters including infrastructure construction, which quite a lot of analysts and thinktanks assume is connected. Most recently, I’ve seen conversations on Bluesky in British media, talking about how the loss of state capacity in the UK in the last 45 years has really been about centralization of functions that local and county governments used to do and therefore the solution is to devolve some functions in England to counties or regions. Much of this discourse is by people I deeply respect, like the Financial Times’ Stephen Bush, pointing out sundry services Greater London ran before Margaret Thatcher’s anti-local government reforms in the 1980s. And yet none of this is relevant to infrastructure construction costs and the country’s inability to build more than a half-phase high-speed line at costs that would be high for a subway.
English centralization…
England has been very centralized for a long time, since the Early Middle Ages. It never really had anything like the German or Italian states, or even French provinces, not have its reforms to local government established anything like the French regions. Scotland, Wales, and Northern Ireland have extensive devolution, but 85% of the population lives in England, and the overall character of the state is never driven by peripheral regions comprising 15% of it. Indeed, in the OECD, by one measure, the United Kingdom has the single largest share of taxes going to the central government, and the second largest share of spending decided by the central government behind New Zealand. The other reasonable measure of centralization would be to do the same but assign social security to the central government, since it invariably either is national or comes with extensive equalization payments; then a few small countries like Israel and Ireland end up more centralized, but none of the European countries of comparable population.
How to fund and what to devolve to local government in England has been a complex issue over the last few generations. Local taxation is weak, and there is nothing like the German system in which the federal government, which collects 95% of taxes, distributes the taxes to the states by formula to do with as they please. The succession of local council tax programs to fund such governments culminated in Margaret Thatcher’s community charge, better known as the poll tax, which was so unpopular it led to her overthrow in a palace coup; at the time, Labour was polling 20% ahead due to backlash against the proposal.
Thatcher herself worked to disempower regional governance that had been established in the two decades before she took office. She aimed to destroy three institutions that she believed were keeping Britain socialist and thus backward: unions, public-sector bureaucracies, and regional governments. On the last point, she led a reform that eliminated regional governance in the Metropolitan Counties, creating a unique situation in which the constituent municipalities of these counties are single-tier municipalities with no level of governance between them and the state. Anything else would permit powerful Labour regions to challenge state privatization and deunionization schemes. Indeed, reforms by the New Tories to undo this and devolve some functions to the Met Counties created elected mayors, and now the mayor of Greater Manchester, Andy Burnham, has arisen as a powerful Labour politician who is mooted by many (including the Green Party) as a potential replacement for Keir Starmer in an intra-party palace coup.
…is not the reason for high costs
The truth is that while the United Kingdom is atypically centralized, at least in England, the exact same problems are seen across the Anglosphere, with roughly the same origin (except in the United States, whose problems have a different origin). British costs exploded in the 1990s, and Canadian and Australian costs followed suit in the 2000s and 2010s, imitating bad British practices. Australia and Canada both have some of the fiscally strongest states/provinces in the OECD, the exact opposite of the United Kingdom.
Across Europe, subtracting the United Kingdom, there isn’t an obvious relationship between centralization and poor state capacity. The Nordic countries are both rather devolved for small unitary states, managing health care and education subnationally. For example, in Finland it’s done in 21 health care regions, with ongoing debates over reducing the number of regions, but no attempt to eliminate devolution and make it a national system, in a country that after all has about the same population as Scotland. On the other hand, Italy is not much less centralized than the United Kingdom, and its infrastructure construction program is excellent, limited by money and uncertain growth prospects but perfectly capable of building a national high-speed rail network for less than half the budget of the 225 km High Speed 2. In democratic Europe, the strongest correlate of high costs is exposure to the United Kingdom and its way of doing things, with the Netherlands having the worst costs and most compromised infrastructure construction.
The privatization of state planning
At the Transit Costs Project, we are putting together a cost report on London, largely about Crossrail but also other recent urban rail expansion including the Docklands Light Railway and the Northern line extension. And what comes out of this history is that it’s not really about centralization. Rather, the United Kingdom invented what I called in the Stockholm report the globalized system, in which planning functions are privatized to large consultant firms while the role of the state is reduced to at most light oversight.
The explosion in costs in the 1990s, producing the Jubilee line extension at nearly four times the real per-km cost of the original Jubilee line, was part of this transition. It was easy to miss the first time we looked because the telltale signs of the globalized system, like design-build contracts, weren’t there yet. If anything, DLR was more privatized in its project delivery, and had reasonable costs until the Bank extension. And yet, delving more deeply, we (by which I mean Borners) found that beneath the surface it did have quite a lot of those negative features.
For example, while the Jubilee line extension was designed with in-house planning, it was understood that future projects would transition to more privatized planning. Thus, there was no expectation that the knowledge gained while building the extension would stick around, and at any rate, there was pressure to build like in Hong Kong, where pro-privatization British consultants cut their teeth in the 1980s and early 1990s. In effect, while the extension was designed in-house, it had all the features of a special purpose delivery vehicle (SPDV, or SPV), the preferred British and increasingly pan-Anglosphere way of delivering large projects: each project’s team is specific to the project itself and after completion the employees, drawn from a mix of private consultancies and public agencies, scatter and are not reassembled as a team for future projects. DLR was if anything the opposite: it was nominally private in its delivery but the same designers were involved throughout, moving between private employers and functions, so it was not de facto an SPDV, whereas the Jubilee line extension de facto was one.
Why do Brits blame centralization?
High costs in the United Kingdom cannot have much to do with the extent of devolution. Australia and Canada have adopted the same way of planning, after all. The British system in which big decisions can only be made by the minister and not by senior, let alone mid-level, civil servants, can be implemented regardless of scale, and Canadian provinces and Australian states are thus without exception not capable of building infrastructure for costs that were routine as late as 20 years ago.
But it can look like centralization, for all of the following reasons:
- The United Kingdom really does have issues with overcentralization and underempowerment of regional governments, though the latter is being fixed to some extent, at least for the Met Counties. It is natural to see two governance problems that cooccur and assume they’re related.
- The origin of the British cost explosion is, ideologically, the same process that also disempowered regional governments. It took some work to figure out the exact process, which was not at all the same as the conversion of the Met Counties to single-tier authorities. Indeed, in Canada the disempowerment of local or regional authorities never happened, but the transition to privatized planning with political rather than civil service oversight did happen, with large design-build contracts with more consultant involvement.
- The implementation of centralization in the United Kingdom has relied on ministerial approvals, and those genuinely bottleneck the state. A better system of centralization, such as in Italy, relies on trust in the civil service. But a prime minister whose favorite television show was Yes, Minister would never have produced such a system.
But that it may be reasonable for a Brit who doesn’t look too closely at how Canada and Australia fail in parallel ways to assume that it’s about centralization does not mean that it is in fact about centralization. Centralized states that don’t speak English routinely build infrastructure efficiently and highly devolved ones that do are incapable of relieving the most important bottlenecks in their city centers.
Pedestrian Observations 
A vote of no confidence is the way many democracies work. It involves….. voting… Your authoritarian tendencies are showing. Again.
I’m not in the mood to dig up organization rules for British political parties. I’m sure voting was involved. Or for organization rules states I haven’t lived in. Here in New York every party has to have an annual organization meeting where the committee members vote on who will hold each office. Your authoritarian tendencies are showing. Again.
It was literally called a palace coup in contemporary media. For example, here’s the first hit I got on Google: https://www.latimes.com/archives/la-xpm-1990-11-29-mn-7469-story.html
I’m sure other outlets were delighted. That doesn’t mean you have to denigrate democracy in action.
Is it not notable that the corrupt globalized system emerged in two cities (Hong Kong and Singapore) which both enjoyed massive location rents that meant that they could easily afford to be inefficient?
Singapore enjoys a strategic position at the head of the Straits of Malacca, by which any ship not wanting to take a long diversion must mass if they are travelling between East Asia (on the one hand) and Europe, Africa, the Middle East or India (on the other hand).
While Hong Kong under British rule was effectively a tollbooth standing between a closed Chinese economy and the outside world: indeed it was likely the loophole in the CCP’s system of economic controls that set China on course to become the world’s factory. I remember as a kid in the 1980s seeing most of my toys labelled “Made in Hong Kong”: I now wonder how many of those toys were made by firms registered in Hong Kong, but physically produced in factories in Guangzhou or the infant Shenzhen?
Singapore also has no natural resources, it is threatened militarily by its larger neighbours so has to spend a lot on defence and yet it has a sovereign wealth fund. I am not sure you can criticise it too much.
It’s not just location – Panama has a great location too but is middle-income. Singapore and Hong Kong are very efficient about a great deal of things: developmentalist policy, public transport-first policy, public housing (more in Singapore than Hong Kong), public health, high education outcomes. This is why they can get away with the one thing, leading to very high construction costs. And precisely because they’re both efficient in ways that are visible to the upper middle class – for example, Changi is a remarkably fast airport to get in and out of and has been for decades – the FILTHs think that everything they do is efficient and do not believe me when I point out that they actually have high construction costs and are not to be learned from, not on this topic at least.
How much of this is health and safety or the river crossings or the inability to use Irish navvies or 1/3rd of the new stations being under a park and 1/3rd of the stations being a combination of two existing stations so the surface works were likely more limited?
When the Americans were doing Obamacare and there were lots of international comparisons on healthcare costs floating around the British NHS was one of if not the cheapest/best value for money. Maybe that’s changed but still.
Ok so let’s talk about HS2 phase 1 first. There are probably five drivers of high costs in phase 1:
I mean quite frankly if you look at that list either stuff is unavoidable or it could be solved with a couple of better special advisors.
Now in terms of phase two or at least phase two between Lichfield and Crewe, yes that should have been massively cheaper and has virtually no excuses like phase one for the overspend. North of Birmingham stops at Lichfield and Stone would be very reasonable and would give you Japanese stop frequency without disrupting services.
But I am not sure you can blame the outsourcing model for overspending on phase 2 when phase 1 can mostly/all be explained by other factors and when the overspend on phase 2 is worse.
Why would that be relevant, given that the original Jubilee line (to which Alon was making the comparison) was hardly built with Irish navvies either?
I am pretty sure the Victoria Line used cheap Irish labour and the Jubilee line from just south of Baker Street to Charing Cross was only built shortly after that
Do you actually have a source on that, beyond just “there were Irish workers on the project”?
Indeed, I was interpreting Matthew’s use of the word “navvies” more as a reference to low-tech labour-intensive construction (as used in the 19th century) than as a reference to the nationality of the workers involved.
I believe part of the reason the Swiss and Istanbul construction costs are low is because they get labourers in from Italy and eastern turkey respectively where costs are lower than with local workers. We used to do that with the Irish before they got rich.
So clearly the monument to the Tunnel Tigers in Donegal, Ireland is celebrating a myth???
Define “myth”.
There’s also the inclusion of the rolling stock (and the amount of rolling stock given the extremely high initial service level) in HS2 which is excluded for other projects. But that should mostly be against phase 1 I think?
You are missing one little thing: outcomes. Far worse in the UK than its peers. Until relatively recently it was a lot cheaper than EU peers but the burden of repaying those PFI debts plus the cost of unmediated decrepitude have seen the costs approach within 1-2% of GDP of peers without improved health outcomes. So even worse than before.
and
And how does this compare to other countries? Do they really avoid these problems?
One wonders if today’s announcement of reanimation of Northern Powerhouse Rail provides a slightly different way forward? It appears to bring in the mayors of the major cities (Manchester, Leeds, Bradford, Sheffield, York), and perhaps give them an executive role? Too early to tell and the fact that central government Treasury has imposed a £45bn cap is not a good sign of applying sensible cost controls other than the brute force one of implying that those northern mayors will have to raise the money if the cost exceeds this. As usual the timetable stretches out over decades.
It is disappointing that it doesn’t include an underground station at Manchester Piccadilly which I think adds quite a lot of value compared to some of the other parts of the scheme.
That said this is an urban mountainous route so costs would be expected to be high in general.
A £45 billion cap on Northern Powerhouse is like the XKCD strip about the teacher who always wears a condom while he’s in class. It elicits a “what the fuck?” response more than anything; after all, in PPP terms, this is about the same as the cost of every LGV open to date combined.
The right level at which to plan something like Northern Powerhouse is the state. Met Counties are a good level for planning local and regional public transport, but intercity transport and long-distance regional transport cannot be so devolved – and even if there were devolution to the Regions of England then trains from Yorkshire and the Humber to North West England should be a state responsibility. The usual arguments for devolution do not work when it’s infrastructure that crosses regional lines and is of national significance as it connects metro areas #3, 4, 5, and 7 in the country. Germany is after all one of the most devolved modern democracies by most accounts, and yet here intercity rail is planned by the Bund and not the Länder.
Of course. But we know that the UK state is utterly incompetent at these things. Involvement of mayors or other regional players could hardly make things worse and could just feasibly bring a different approach. Some of these mayors are ambitious, like Andy Burnham (Manchester) so would be very motivated to bring better infrastructure and better cost control. When I read the latest stories on NPR I thought this was the sole difference to before. No acknowledgement of rebuilding state competence. Just a tiny opening for these regional players to perhaps rebuild it from the ground up. Ridiculous but …
The only other tiny glimmer is that Mark Wild runs HS2, after being brought in at the last moment to get CrossRail completed. Unlike all the other CEOs and MDs who barely paid attention to the job, he is not an ennobled member of the establishment (though that must be in train). They could do a lot worse than have someone like him involved from the (re)start of NPR. He’s from Leeds so has the right pedigree to show it takes a non-London/SE group to rescue the project.
So progress. It might not be perfect but we are going in the right direction now.
Do not forget that HS2 phase 2 unlike phase 1 is much more similar to the European projects that are delivered cheaply so was far more unreasonably priced than what came before.
But it also goes past more houses than every LGV open to date combined, and needs more urban approaches than every LGV open to date combined does. And urban approaches are extremely expensive in any country.
Look the Antwerpen Centraal upgrade cost €765bn, call it €1.5bn in todays money adjusted for construction inflation or £1.3bn.
Even just Liverpool-Manchester needs three Antwerpen Centraal’s. Manchester for capacity, Liverpool for approach speed and Warrington for passing/joining up the southern/middle routes. So probably a minimum of £4.5bn would be needed even for a budget proposal there.
Then Leeds and Bradford probably need another Antwerpen Centraal each as well (another £2.6bn) and there is the £9-11.5bn already allocated for the Transpennine route upgrade – which is probably bad value for money, but online upgrades with high levels of service are expensive in any country.
Depending on what you are planning to do between Manchester and Leeds the £45bn could even be good value. Certainly it is at worst overpriced by a factor of 2.5 or so, which is in line with HS2 phase 1 and far below the 10-20x over budget than HS2 phase 2a was.
I’m guessing you meant to say that the Antwerpen Centraal upgrade cost €765m, not €765bn!
Current proposals from Northern Cities are all best seen as rent extraction/job creation schemes, rather than transport proposals. Wanting a medium speed railway Manchester-Brum? A 4th Liverpool-Manchester railline? A 3rd Aiport connector? A tram that goes between Bradford-Leeds?
For the record, Andy Burnham likes to say that when he as no.2 in the Treasury in 2008 approved Crossrail, he was given to understand the North would get similar generosity. That’s actually not what happened, Livingston and co put together monies from various sources and needed central state to provided the final 1/3, and only 1/4 overrall was central government grant. NLE was 90% London funded too. Whereas Manchester’s metro-cost tram extensions, Ordsdall loop-to-nowhere and current Transpennine Upgrade are all 100% state funded.
Northern Government and Civil society are incompetents* and liars. IPPR North or Tom Forth, or that stupid Yorkshire Rail Report all use statistics where TfL fare revenue, and the Mayor’s share of Business rates are treated like central government grants rather than local funding. And also make sure to emphasise the years 2018-2019, when Thameslink, NLE, HS2, Crossrail where all happening at the same time. And also ignore that Northern Trains alone gets annual operational subsidies equal Crossrail’s annual construction spend 2010-2018.
*The one London project that was 100% state funded was Thameslink which
If you want to run a service from Liverpool to Manchester in about half an hour every 15 minutes you do need to improve the speed of the Liverpool throat towards the south and add more capacity in central Manchester. Now that would be cheaper (and better) than the current proposal to spend £15bn on a line from Liverpool to Manchester, but even at Belgian costs it is certainly going to be several billion and not super cheap.
The argument that needs to be made I think is that once that is done that you are then in a position to send the London-Manchester trains on the existing line north of Crewe.
OK so if you say the £10bn Transpennine upgrade matches the Crossrail spend then I think you have a point.
According to the rail finance report from 2024/25 the Northern rail operational subsidy amounts to £700m? So a bit less I think. Also if you were to improve the Liverpool throat and add more central Manchester capacity I think that subsidy would go down quite a bit.
A parkway station just off the M6 for Liverpool and Manchester would help as well, Birchwood I guess gets close but the service is a little weak.
If you look at the south route today the fastest train takes 10 minutes to get to Liverpool South Parkway, 13 minutes from there to Warrington and then 17.5 minutes from Warrington to Manchester Oxford Road, now sure more time is lost with acceleration than with electric for that. But the 10 minutes to get to Liverpool South Parkway when you can do Paddington-Old Oak Common in 4.5 for a similar distance is definitely a real pain point.
If you could get to Liverpool South Parkway in 5 minutes from Lime Street then I think you could get to Manchester Oxford Road in a little over half an hour with some pretty modest speed increases over the remaining sections. But without speeding that bit up it is difficult I think.
The big electrification gain is really that it allows the stopping service to go quicker so the express services could be actually express – maybe only calling at Warrington, and then have a semi-fast as well – perhaps every half an hour or hourly calling at the current express stops as well as the full on stopping services.
In terms of a passing loop I am not sure where that would go bearing in mind that I think it would need to include a couple of stops and the track in between given British train reliability.
So, the issue isn’t even about planning being public or private, but is about whether the construction process and the knowledges from that are one-off or whether they can be inherited and reused for next project?
I mean even in Japan, railway construction is centralised to a large extent to JRTT since only the biggest JRs can afford to have in-house staff at scale to manage major capital projects.
And Japan is the most privatised system in railways in the world. UK only pseudo-privatised.
The other thing is while in general Britain is definitely over centralised with sometimes ministers making a decision about whether a school should sell off part of its playing fields for housing I am not sure that is true in transport.
The national highways network is if anything small. The rail stuff is sometimes interfered with by the central but the operations are pretty decent and certainly at least arguably better than France/Germany on service offered and reliability respectively
The airports are private or run by local councils
Not sure whether this statement is more or less inaccurate than claiming the Victoria line was built with Irish navvies. British ministers micro-manage all sorts of rail and road investment decisions down to extremely mundane renewals/’state of good repair’ issues like signalling replacement – you should see the complete lack of import of 90% of the sorts of things that are presented to them. With recommendations mostly fed to them by civil servants whose expertise lies not in building or operating transport networks but in lackeydom and political intrigue, and who rotate out of the job every 2-3 years (double the term length of an average junior minister, of course – making those civil servants look like old hands). Blows the mind
Surely in transport they just follow the network rail/national highways recommendations – and those are made by actual experts?
And do they really micromanage councils roads repairs?
Hahaha, people listening to Network Rail, that’s funny.
I disagree with Fjod, I don’t think the Civil Servants are the source of micromanaging, but how the political system works. UK ministers have a huge amount of discretionary power, but sit atop a highly dysfunctional organisational structure which means they easily get bogged down in each controversy. Additionally UK’s Planning system and to a lesser extent its building regulation system are extraordinarily discretionary, which means local councillors, local MPs, parliamentary committees, quangos, CPRE etc can very easily impose their petty selfishness because instead of the regulatory system being a menu of set actions, everybody is a given a paintbrush and vague guidelines.
UK is simultaneously a very open political system where pressure from any quarter can have impact, and deeply undemocratic because it denies the construction of majority rule. UK is a system of competing forms of minority rule. Which means nobody has legitimacy, nobody is willing to sacrifice for a civic good etc.
What I find interesting is the ignorance of the past. Taking London as an example there was no real central planning until 1933, before that the various rail lines/subways were constructed by private companies and all designed by private consultants and architects, and interesting attracting a lot of investment from the US. Nationally until WW2 heavy rail was built, maintained and operated by private companies. Once British Rail was created then planning for rail got centralized under the British Rail umbrella. Highways were perhaps less centralized but at some point Highways Agency or whatever it was called had regional offices to deal with regional improvements but the M6, M1 etc. were nationally planned endeavors. Back in the 1980’s those regional offices were all “privatized”. What are the big consultants now were much smaller back in the 80’s, for example Mott MacDonald or back then Mott, Hay and Anderson were around 750 staff in the mid 1980’s, although growing as a result of the design work for Channel Tunnel. As the various design units from BR and the highways were privatized consultants started to grow and the institutional memory of those agency offices transferred to the consultants. I’m not saying this was good or bad but its what happened.
Looking at London Underground the entire network has been designed by consultants since its birth, so the assumption that this is some new approach is a little erroneous.
Perhaps when looking at costs you also need to consider the impacts of the Monopolies and Mergers commission elimination of rate sheets for designers and architects and their insistence on competitive bidding for design contracts to ensure value for money was achieved in the procurement process. Rather than being able to simply select the design staff with the right experience now the agencies had to undertake a competitive bidding process meaning that the best qualified did not necessarily win, thereby diluting the institutional design experience that was centered in the admittedly limited number of design folk that worked on past projects. This process was ongoing in the early 1980’s. Add to that the Latham and Egan reports of 1988 and 1994 that were commissioned by the Government in an attempt to improve the efficiency and productivity of the construction sector in the UK and you have a rapidly changing environment. Moving from Institute of Civil Engineers standard form of contracts, with detailed bills of quantities to the New Engineering Contract and target costs type contracts was also occurring at this time. One of the key findings of the Egan report was that the margins in construction were not enough to allow for adequate investment back into the construction firms, in other words Normal profits were not being made, and one of the main goals in the changes in the UK infrastructure procurement was to attempt to provide adequate returns to the construction companies to ensure they could invest in better work processes, training and become more efficient. Has that happened, I don’t know I’ve been out of the UK for too long to comment on that.
So is it really a surprise that costs increased? Inexperienced but cheap designers, with no institutional knowledge producing poor designs leading to increased outcome costs?
And finally, the ground. Much of the Underground is built in London Clay, if you could create the perfect tunneling material London Clay is as close to perfection as nature has developed. No water, good stand up time, not abrasive and can be mined using pneumatic clay spades. Sure the guys running the spades get white finger and are crippled as a result of hand arm vibration syndrome but hey those early tunnels were cheap to build. Once the Greathead shield was developed, tunneling was efficient. Once you get deeper into the Thanet Sands and Woolwich and Reading beds things get a little more tricky, the Thanet Sands can have artesian pressures in them which can cause major problems as Thames Water found out on the Ring Main beneath Streatham Common. So now instead of hand shields, clay spades and SGI segments your into pressurized face TBM’s, pre cast concrete segments and ground treatment for the stations and shafts etc. The easy stuff has already been built.
As for Thatcher, good riddance.
Taking London as an example there was no real central planning until 1933
That’s not quite true. By WW1 UERL is doing coherent route planning, and does so throughout the Interwar years. That’s why the government was willing to merge the Metropolitan line, buses and trams into it in 1933 into semi-private LT. That’s why LT also develops under Pick such a strong aesthetic culture, it was a very powerful corporate entity.
Ditto Southern with its program of 3rd rail electrification. You don’t necessarily need “central planning” so much clear lines of responsibility in terms of fiscal, operational and capital expenditure. And at that time the Private Railway Bill Process still allowed you to get away without locals plundering the project with betterments.
And if you look at the data I’ve uploaded to the TCP website, its clear that LT (plus a few BR projects like Stansted tunnel) were able to do affordable projects. They had other problems pre-Thatcher i.e. the de-urbanisation/industrialisation of London consensus of 1945-79 wrecked their customer base, and the Unions etc inhibited more efficient operations, except when political will was there (Beeching, and Network Southeast in the 1980’s).
Looking at London Underground the entire network has been designed by consultants since its birth, so the assumption that this is some new approach is a little erroneous.
There is a terminology slippage here, design consultancies like Mott where always used this is true, but actually LUL did a huge amount of the work in house, with very clear idea of what it wanted from its contractors. And not just with new alignments, but they also did a lot of the work designing and testing in collaboration with Westinghouse/Metro-Cammel. LT basically ran the entire testing and design process for the Victoria, testing ATO in the late 1950’s on the District line. And also organising the supply chain scheduling so that the contractors don’t bumb into each other. The “consultants” problem is the way post-1990’s projects ask generalist consultancies like Bechtel to do everything for them on project management, high-level design etc and they just can’t, both because capacity/risk limitations, but also a lot of the choices are fundamentally client decisions.
God this meme is overdone. Yes London clay is great, and waterlogged soils are a cost centre, but not to the extent we are seeing, most expensive part of the Liz line’s Civils was the clay bits not the Thanet Sands bits. Plus the superb cost performance of the two DLR Thames tunnels to Lewisham and Woolwich (both costing less than 200 million per km in 2023$) And actually I think the Thames should be seen as advantage to be leveraged, since you can use it to shift spoil, material and equipment. Lack of it is partly why the Bakerloo is looking at 1 billion per km.
Moving from Institute of Civil Engineers standard form of contracts, with detailed bills of quantities to the New Engineering Contract and target costs type contracts was also occurring at this time. One of the key findings of the Egan report was that the margins in construction were not enough to allow for adequate investment back into the construction firms
Yeah I think we have the UK doing a lot of bad innovation. I think the real problem is more upstream of contracting since DBB, DB and NEC contracts all produce similar bad results, (although HS2 which is SPV with big DBs/NECs) over the last generation. Those reports didn’t understand the main obstacle to a more efficient construction sector is the planning and building regulation system being at all levels extremely discretionary, which means economies of scale don’t work as they do elsewhere. Those reports like most UK “innovation” are insular except with refs to US, and unable to admit the UK is simply behind, and should just learn.
This seems like a much better explanation that explains why HS2 phase 2 is so expensive as it has all the betterments phase 1 has because its an AONB/wealthy/couldn’t have six stops.
Well the Egan and Latham reports did also look at some of what you mention. But their basic premise of a confrontational, inefficient industry was correct for the 1980’s early 1990’s. One example was the Royal Liverpool University Hospital, which had other issues as well but the outcome cost was 3x the original costs and the delay was 11 years!!
Agreed about UERL, what I should perhaps have said is something like TfL run by the state did not really exist until 1933 when UERL was effectively bought. As for the consultants agreed on the Bechtel comment, my point being that specialty consultants had been involved throughout the life of the Underground, and that outcome cost inflation is not necessarily a result of using consultants.
Again we’re talking past each other.
At TCP, when we criticise use of consultants, its not for use of completing civil engineering drawings for stations/tunnels. Its the use of consultancies for project management and high-level operation designs, plus systems integration. Those fundamentally need the client organisation which outside Japan are a state entity.
Or put in Crossrail terms, Crossrail ltd tendering out design contracts for each station was fine. The problem was that having most of Crossrail’s PM into 2 contracts one for Bechtel and the Transcend consortium of 3 consultancies (in fairness they realise that in 2011 and merge into a single ops with consultants on secondments).
And again its not so much these consultancies are bad, but that they don’t have the legitimacy/authority to say no/use state power to control costs. And they don’t run railways too, which creates its own difficulties because building a railway requires a transition from civil engineering, to MPE, to testing to operations.
If you are interested, I got this response from a rail industry professional when posting the section of this blog post that lays out the thesis regarding “privatised planning”:
I mean yes nominally costs have gone up. But the UK’s cost performance is just so much worse than other 1st world industrial countries. And actually in the last decade we’ve generally been investing more in rail than all other OECD countries sans Japan and have received rather little.
And I’ve encountered a lot of UK rail people who want to just say its because “its an accounting gimmick”, “Madrid is lying” or “the French don’t include rolling stock costs we do”. Its an excuse so the sector can avoid doing anything other than MOAR MONEY.
And 1980’s BR especially Network Southeast did more electrification than any other period of UK rail history, while subsidy to the sector declined, that speaks to cost efficiency not accounting gimmicks.
And late BR was also making a lot of progress on operations efficiency, getting quite a few driver only operations services in the London commuter belt. You can make a point of cut corners leading to Clapham Junction and Hatfield disasters though.
I found the costs for the new underground limited express platforms at Osaka station with the magic platform edge doors. £350m at market exchange rates – probably £800m PPP adjusted for construction inflation. And this is in a station with 300m passengers a year.
The current proposal for East West rail has £500m for a surface suburban station at Old Oak Common (see table page 8) for 4 trains an hour towards Aylesbury and maybe 2m passengers a year. It’s madness.
I definitely don’t think we are always bad. But there are definitely times where we are.
Generally Clapham is blamed not on cut corners but a poor safety culture…
I put your response to the same rail industry professional and got this response:
@eldomtom2, is it possible that when they built e.g. Haddenham and Thame Parkway in the 1980s that the rail replacement bus they did for the project was counted as operations or something and today it wouldn’t? Sure.
Is it likely that the SPV being the primary issue is unpersuasive given HS2 phase 2 is definitely worse on cost than phase 1? Sure.
But something has still definitely gone wrong. £50m or whatever an average station costs is crazy.
A brick wall costs something like £150/m, tarmac at 3m wide costs something like £270/m, the nobbled paving stones for the blind installed probably cost something like £75/m. So a platform is like £500/m – or two 200m platforms costing £200k. Now sure this is the domestic cost so add a railway multiple to that. But certainly you should be able to do it for £1m for two platforms.
Now sure you need a footbridge, lifts to access them (probably £200k a floor these days), ticket machines, ticket barriers etc.
Probably however the reason it’s £50m is that there is £25m of paperwork for the project, which is largely pointless. Likely HS2 phase 1 isn’t “that bad” because the paperwork doesn’t actually end up scaling quite as much as the other cost items.
Yeah France uses consultants, a then copied SPV for GPE and guess what costs exploded. And now GPE SPV is being turned into a permanent agency.
Again you and your source are confusing consultants and consultants, hiring design agencies to do last the last 70-90% of design is fine, especially if you have itemised cost lists, clear regulations and existing pre-fab menus to build trains out of. That’s how southern Europeans do it. But modern UK consultant dependency is having them do all the stuff that is the client/government’s responsibility. Private companies cannot wield political legitimacy to make political choices on design, permissions etc, which is why their only response to spend public money (which they are okay because they get a cut). Hence HS2 or East-West-Rail.
Yeah, sorry but overall rail spending in the last decade of the 1980’s wasn’t rising enough to explain the large increase in infrastructure projects at least NSE and Scotrail zones. Doing 2-3x the electrification over a decade compared to GWML era is kind of a tell.
Read Lines of Powers by John Buxton and Donald Heath (the latter was chief of ECML). You can also read the RIA electrification challenge. Unless you think all of them were liars and idiots.
Its worse, KitaUmeda platforms were also designed to deal with have stuff build on top of them. And the trains are longer.
HS2 is so bad that it has at least a dozen primary issues. What I can say is the 4 SPV projects HS2, East-West Rail, Crossrail and HS1 all have had worse relative cost-performance compared to Network Rail or TfL let alone international cases. The two latest HS2 and East-West Rail are dramatically worse than the earlier two. And HS1 has had disappointing benefits because of ops choices and fixable design choices (i.e. needs 2-3 more stations to provide good super commuter service).
We also from the various tram projects semi-SPV, big DB contracts with similar problems.
One thing that came up in my report, is that the UK has had Permanent Revolution in institutional design since 1987. I.e. “its broken, break it again”.
On the plus side, we are moving back to more conventional “owned by the state, run by the state” model and we’ve been moving there since railtrack collapsed. The problem is high costs are entrenched and most of the industry sees our high costs as “cost of doing business”.
@ Borners: You said that costs exploded when France copied SPV for GPE. Besides the size of GPE’s stations, I do not see much inflation.
Latest prediction for the 33 km Ligne 15 Sud is Euros 8 billion or 242 million/km. This is remarkably close to the cost of the first M14 segment RATP opened in 1998 (1 bn Francs/km = Euros 232 m/km adjusted for 25 years of inflation), or the 2024 Orly extension (Euros 2.9 bn for 14 km = 207 mE/km).
Oh no, I would kill for GPE costs in London. Still lower according to PPP than the Jubilee Line extension. But according to our database GPE and other recent projects are clearly elevated costs. And yeah, station bloat seems to be a big part.
I mean this isn’t Canada since mid-2000’s explosion under UK influence. But a 20-50% increase in costs is still a big deal and not good.
SPVs will find it extremely difficult to avoid station bloat. Because they generally built in rejection of previous system (with its compromises in design) and lack traditional state organs legitimacy to say no on cost grounds. So they spend to solve obstacles.
Re-gallicise yourselfs! Ignore the siren calls of stupid vapid British decay.
The Société du Grand Paris did not lack legitimacy to say no on cost grounds. As far as I know, the Grand Paris Express large and at times spectacular stations are the SGP’s choice. When state organs like the Cour des Comptes and elected officials pointed out that Gonesse’s Europapark and the CDG4 terminal, which were supposed to be the main traffic generators on the northern segment of ligne 17, were not going to be built the SGP did not reconsider. Time will tell whether the SGP made the right choices for so far neglected banlieues, or was affected by “la folie des grandeurs”. In 2023, the SGP changed its name to Societe des Grands Projets because it wants to be involved in RER projects in provincial cities. A SGP most concerned about its own survival is unlikely to find a project it doesn’t like.
This concern, common to all institutions, is the reason why I never bought into the argument that transit projects are expensive in the Anglosphere because the various actors are inexperienced. They know what they are doing and are not going to learn how to cut themselves out of the gravy train for the sake of efficiency.
dralaindumas
I think that is correct. Also almost all the stations are interchanges with at least one other line so that adds complications (building around existing lines or stations) and expense. I think too they have learnt from building those RER cathedral stations in Paris all those decades ago (50y next year!). There was a lot of noise and consternation about their extravagant size and expense, but most will agree that they got it right. And we should note that the Brits copied the concept in the Elizabeth Line (and Australian in Sydney’s NorthWest Metro with its gigantic stations deep underground). Beancounters hate it but everyone else knows this is building for the ages.
Michael, I am afraid the primary function of the GPE grand stations is to impress the foreigner. In the words of the Chambre de commerce et d’industrie de Paris, goal #1 is “Promouvoir l’image de marque du Grand Paris aupres des investisseurs et des touristes dans les “Grandes Gares”, portes d’entree a l’international.” Their local function is secondary. These Gares are located at the very place you would classically avoid building a metro station, in a large empty space at a distance from existing activity.
As for their role as connector between subway lines, it is worth remembering that most Paris M14 stations are interchanges. They fulfill their mission thanks to their compact size. They are fully accessible but their surface footprint is minimal and discreet.
I don’t follow any of that. I mean when did French planners, especially transit or city planners, worry about what foreigners would think, and in the banlieu? (Thank goodness.) The location of stations is mostly determined by where the line intersects the radial Metro & RER. Or in the case of M14, by needs, ie. to service the Hopital/Institut Gustave Roussy which at the time I worked there was the largest cancer hospital in Europe. Plus another N-thousand workers at the many research institutes at nearby Hopital Paul Brousse, it will be an instant success and easily justifies building the giant station (these plans show a glass dome bringing light down the 5 floors, reminiscent of some on the Elizabeth Line). I hardly ever used M14 but I recall that the station at Bibliotheque Nationale is a gigantic affair and also has natural light coming from way above? (and a kind of mini-forest?)
The thing is that M15 (and M14) is closer to RER than Metro and that’s part of the deal with stations. And an explicit attempt to create a TOD type focal point. Here is a French commentary (via Google Translate):
http://transportparis.canalblog.com/pages/ligne-15–l-indispensable-rocade-a-haut-debit/27702103.html
@dralaindumas, I do think part of why the costs were higher for the Jubilee line extension was the (very large) cost of adding extra capacity later to the Victoria line stations where that wasn’t originally done.
Some of which is health and safety where the French are probably behind, but not by much.
I mean to be honest I am more concerned about e.g. Thanet parkway which got 125k passengers in year two and cost £40m to build than the jubilee line extension costs.
Beaulieu Park (120m I think), and Brent Cross West (400million) are much much worse.
Yeah no Green Park capacity upgrades were not a major cost centre, and certainly were a necessity rather than a luxury (of which the JLE had many). Health and Safety standards imposed some unnecessary costs, but were not the main problem. (they were worse for Crossrail).
JLE’s choice for architectural statements meant station dimensions were larger than they needed to be for capacity and could not use more standardised parts that could be made off-site (which DLR was doing at sametime).
They also got screwed, Heathrow Express’s NATM disaster, meant they had a 6 month delay and had to scale back use of NATM in Waterloo-London Bridge zone. Additionally politics imposed an insanely difficult Westminster station build and then made N. Greenwich the Millennium site, which then had the contractors esp fitting out people realise they could squeeze JLE/Gov for money.
That’s just the civils stuff, then you get the signalling/testing stuff. Which is a consistent problem for the UK system, Crossrail most infamously, but you can see it also in the troubles the sub-surface lines are still having completing the transition to CBTC.
Cambridge South being £225m is also pretty ridiculous.
I wasn’t aware of that. I was more thinking of the £810m increasing capacity at Kings Cross St Pancras in the 2000s, and the £700m spent doing the same at Victoria in the 2010s.
They add a heck of a lot of cost to the Victoria Line project if you essentially say they were “required” – more than a doubling of the cost in real terms I would have thought?
Yup, one thing to keep mind though is that the most expensive of these infill stations also combine having to realign more the rail/add passing loop (laudatory). So premium over Thanet Parkway is understanable.
Costs centres 1. Too many land takings for landscaping/parking 2. Station always has to be an architectural statement (Brent Cross west has like three styles across the viaduct it stands on) which means extra design pressure and you can’t used uniform parts. Compare with how classic Victorians tended to produce samey architecture, or the Underground with Green and Holden.
And this explosion is relatively recent, e.g. the surface new build stations of Crossrail, Abbey Wood station cost 130 million and Custom House 66 million (the latter is because they minimised takings and accepted DLR style pre-fab spare concrete).
GB Rail needs to have a itemised costed infill station menu, if a locality wants something different they can pay for it.
And Bank at a billion. All three of those station upgrades were much more extensive than JLE’s Green Park, which is really just an upgraded passage with nice finishing. Both KXSP and Bank had some new alignments added in a super complex interchange (remember Thameslink Tunnel and sewers). E.g. Bank added a whole Km of new track so they could use the old Northern line as a passage (northbound I think). And these were stations that you couldn’t really close either. I actually think by our standards these were relatively affordable. Not good, but they were genuinely difficult. Unlike the 43 million Colindale upgrade.
And the splice from the original Charing Cross Alignment caused trouble, but for Westminster rather than Green Park. And you can see that visually in that Green Park platform side looks like classic Tube, claustrophobic, cosy with tiling and then Westminster goes Bond Villain lair.
If Oxford parkway and Bicester village don’t have calls for fancieness nowhere needs it.
Westminster will be bomb proof don’t forget.
@Borners , put your response to the same individual again and got this response:
@eldomtom2
Obviously I haven’t done any research on this myself, but isn’t it enough evidence to say: the costs in the UK are unusually high, here’s what the UK does differently than lower-cost countries? What else would the high costs be caused by, if not by what the UK does differently than other countries? And the last paragraph of the quote talks about “the client not really understanding what they want” and “inappropriate contractual mechanisms”! From my understanding, this is quite close to the problems Alon points out in this blog.
@eldomtom2 if in the mid 1980s Winnersh triangle railway station cost £375,000 or under £1.2 million adjusted for inflation why does a basic station now cost 30x that?
And given that is the case isn’t it reasonable to argue that at least in some ways costs are out of control?
I find the argument broadly persuasive, but mostly as an aside, conflating unitary-local government centralization with federalism seems off to me. For the purposes of such investment, in Canada, the Province is the Central Government and Canadian Provinces are quite centralized. In British Columbia, translink the operator is well regarded but capital construction is undertaken by the Ministry of Transportation & Infrastructure and they have not done so well in recent years. Ontario all the construction has been taken over by the 10,000 vice presidents of metrolinx and their associated consultants, and the results have been abysmal.
Just to correct, I had used for the Bank extension of the DLR completed in 1991, a figure of 295 million pounds. I got this from a number of sources, this otherwise excellent report. Its not wrong, but it combines the Bank extension with a program of upgrades to the original DLR (Sel-trac signalling, new trains and lengthening platforms etc). I was not able to get a breakdown till today. The Bank extension cost 149 million in 1991 pounds, which means it cost 248 million at 2023 dollars, i.e. roughly global median. This difficult short extension, that had real trouble tunnelling under Mansion House (the house not the station) with the deepest platforms in central London at 41 metres, deeper than the Elizabeth Line. Its also the busiest part of the line. So this the kind
Which is to say, the DLR from 1987 to 2011, was really quite affordable. The UK while dismantling the “traditional system” did manage to build a reasonable scale light metro system at good costs. Alas I don’t think the circumstances are easily replicable sans easy take aways like “pre-fab your stations” and “not interlining systems makes things way easier”. More on this when the report is out.
I’ve actually seen an estimate that 1987-2020 some 1.7 billion was spent to build the DLR….the Thamesmead extension is going to be… 1.7bn.
Winnersh triangle from the 1980s even has a price – £375,000 – https://en.wikipedia.org/wiki/Winnersh_Triangle_railway_station
So an infill stop for 8 car trains should be doable for £1m in today’s money.
Winnersh triangle from the 1980s even has a price – £375,000 – https://en.wikipedia.org/wiki/Winnersh_Triangle_railway_station
So an infill stop for 8 car trains should be doable for £1m in today’s money.
I don’t think you quite need to go pre-fab, but it’s much more “get an architect who does small commercial and domestic work” not “get a fancy London architect”