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Crossrail: behind schedule, over budget and under pressure

Νίκος Καραγιάννης



Londoners should have been travelling on the central section of the British capital’s new Elizabeth Line by now, but the £14.8bn Crossrail project is unlikely to open until 2021 and will cost even more than revised estimates. David Briginshaw reports on the project’s difficulties.

Until last summer, the Crossrail project team was confidently predicting that the 21km central section of the 118km Elizabeth Line between Abbey Wood and Paddington would open on budget and on time in December 2018. The final section of 42km of bored tunnels under central London was completed on June 4 2015 allowing fitting out to commence and the £14.8bn Crossrail project was declared 65% complete.

Tracklaying was completed in September 2017, and the 25kV ac electrification in the tunnels was energised in February 2018 enabling test running to commence. At the time, Transport for London (TfL) said the Crossrail programme was 90%-complete and on schedule to open in December.

Meanwhile, in July 2014, TfL awarded MTR Corporation a £1.4bn eight-year concession to operate Crossrail with an option for a two-year extension. The first of the fleet of Bombardier class 345 Aventra EMUs carried their first passengers on June 22 2017, when the trains entered commercial service with TfL Rail between London Liverpool Street and Shenfield.

TfL announced on July 13 2017 an order for four additional nine-car class 345 Aventra EMUs from Bombardier to support higher frequency services on the Elizabeth Line, expanding the fleet to 70 trains.

In May 2018, MTR started to operate a shuttle service using Crossrail trains between Paddington and Hayes & Harlington. The trains are also being tested for ERTMS operation on the Heathrow branch, but they are not yet allowed to carry passengers between Paddington and Heathrow Terminal 4, and this service is still being operated by class 360 EMUs.

The first signs of trouble regarding a potential cost overrun emerged in July 2018 when the Department for Transport (DfT) and TfL allocated an extra £300m to Crossrail. Infrastructure manager Network Rail also received £290m in the summer to complete the surface works.

On August 31, Crossrail announced that the opening of the central section would be delayed until autumn 2019. Crossrail said contractors needed more time to complete the fit-out of the central tunnels and stations and develop the railway systems software. Further time was also required to complete the full range of integrated tests.

In December a revised financing package for Crossrail was announced by the Mayor of London, Mr Sadiq Khan, the Greater London Authority (GLA), and TfL. The GLA would borrow up to £1.3bn from the DfT and repay the loan from its Business Rate Supplement and Mayoral Community Infrastructure Levy. The GLA would also provide a £100m cash contribution, taking its total contribution to £1.4bn, which it would provide as a grant to TfL for Crossrail. But with the final cost yet to be confirmed, a contingency of up to £750m was set aside by the DfT in the form of a loan to meet the remaining cost of the project.

On December 5, Sir Terry Morgan stepped down as chairman of both Crossrail and High Speed 2 (HS2) a few days after he told the BBC that he expected to be fired because of the delays to Crossrail. Morgan had been chairman of Crossrail since June 2009, the year in which construction started.

The total cost of the project has so far risen by 19% from the £14.8bn agreed in 2010 to £17.6bn, and Crossrail is unable to provide a new opening date.

On April 3 the British parliament’s Public Accounts Committee (PAC) published a damning report on Crossrail. “We are not satisfied by the DfT’s vague response to our questioning on how it protected taxpayers’ money when overseeing delivery of the programme,” the PAC report says. “We are not convinced that new services will start to run in 2020 as now hoped, nor that the additional £2.8bn of funding provided will be enough.”

“It is clear that the delivery deadline of December 2018 had been unrealistic for some time,” says the PAC chair, Mrs Meg Hillier. “But the DfT, TfL and Crossrail Ltd continued to put a positive face on the programme long after mounting evidence should have prompted changes. Wishful thinking is no basis for spending public money and there remain serious risks to delivering this programme, with a revised schedule and costings for completing the work still to be agreed.”

“It is unacceptable that parliament and the public still do not know the root causes of the failures that beset this project. Nor will we accept the DfT and Crossrail Ltd’s description of these serious problems as systems failures.”

The PAC lists six key findings and actions it wants the DfT to take regarding Crossrail:

Finding 1: the DfT, TfL and Crossrail’s fixation on a delivery deadline of December 2018 led to warning signs that the programme was in trouble being missed or ignored.

Action: explain within six months the steps the DfT is taking to encourage a culture of openness and transparency and how it will ensure that project teams reconsider completion dates for major programmes at key points through the programme.

Finding 2: it is unacceptable that the DfT and Crossrail are unable to identify the root causes of the programme unravelling so quickly and so disastrously.

Action: consider the root causes of cost increases and delays and set out by June 2019 lessons learned and their impact on the DfT’s approach to the project.

Finding 3: the unacceptably laissez-faire attitude by the DfT and Crossrail to costs potentially rising by nearly £3bn.

Action: the DfT should set out how it considered the value for money for taxpayers when it agreed to increased funding in 2018.

Finding 4: the programme is at risk from further cost increases and delays.

Action: after reaching agreement with Crossrail, the DfT must outline how it has assured itself that the revised schedule and cost to completion are robust; the DfT should also detail how the £2.8bn of extra funding will be allocated.

Finding 5: weak governance by the DfT and Crossrail characterised by a catalogue of failures to adequately oversee performance.

Action: the DfT must explain by July 2019 how it has changed its contractual relationship with Crossrail so that it can properly exercise oversight and hold Crossrail to account for its performance managing the programme to completion.

Finding 6: the DfT and Crossrail have been unwilling to accept their responsibilities for the significant delays and cost overruns.

Action: the DfT should clearly articulate by the end of April 2019 what it, TfL and Crossrail are responsible and accountable for and what the consequences have been for those senior officials in positions of accountability and responsibility for failures on the programme.

It should have been apparent to Crossrail management well before August 2018 that the project was running late and that more money was needed for completion. Either managers were woefully out of touch with reality or were hoping against hope that everything would come good by the December 2018 deadline. In the meantime, limited train testing is continuing on the central section, but most of the fleet is in store and likely to remain so until 2021.



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FirstGroup-Trenitalia wins West Coast Partnership

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Britain’s Department for Transport (DfT) has selected a joint venture of FirstGroup and Trenitalia UK as operator of the West Coast Partnership (WCP) franchise, which encompasses inter-city services on the West Coast Main Line (WCML) and the initial phase of operations on High Speed 2 (HS2).

The 70:30 First Trenitalia West Coast Rail joint venture will take over operations from Virgin Trains on December 8. In the first phase of the franchise, First Trenitalia will operate existing InterCity West Coast (ICWC) services while acting as shadow operator for HS2, providing design, development and mobilisation services for the new line from London to Birmingham and Crewe.

First Trenitalia will operate ICWC services as a normal franchise, sharing revenue risk with the DfT through a GDP-based revenue protection mechanism and an additional Forecast Revenue Mechanism (FRM) from April 2021.

The former mitigates the financial impact of macroeconomic conditions, while the FRM can be triggered if revenue variances exceed a set threshold from the bid assumptions for any reason. FirstGroup says it believes its TransPennine Express and South Western Railway operations would have remained profitable if these revenue sharing mechanisms had been included in the agreements for these franchises.


First Trenitalia expects to generate premium payments of £1.6bn in real Net Present Value during the first phase. the joint venture will directly fund £11m of residual value assets, and deductions from the premium will fund First Trenitalia’s £252m investment in the first phase. A further £453m will be funded by rolling stock leasing companies for new and refurbished trains.

First Trenitalia forecasts a combined annual growth rate (CAGR) for seat miles of approximately 1.2% annually during the first phase. Passenger revenues, which were £1.2bn in 2018-2019, are expected to increase at a mid-single digit CAGR over the duration of the first phase, lower than the historic growth rate of the franchise over the last decade.

In the second phase, First Trenitalia will operate the recast ICWC services and HS2 services between March 2026 and March 2031 as an integrated operation under a management contract, with revenue and cost risk transferring to the DfT.

During the second phase, First Trenitalia will be paid a management fee equivalent to a low single digit margin annually, with additional incentive payments for good performance. The contract includes an option for a three-year extension.

The fleet of 56 Alstom class 390 Pendolino tilting EMUs currently used by Virgin will be refurbished at a cost of £117m with 25,000 new seats, additional luggage space, improved passenger Wi-Fi and at-seat power sockets across the fleet with wireless charging and onboard entertainment. Catering will also be upgraded with at-seat service in both first and second class.

First Trenitalia says it will introduce “an easily understandable range of fares and fewer ticket types” with an “easy and rapid” delay-repay system and mobile and smartcard ticketing.

By 2022 the joint venture will introduce 263 additional services per week, with new direct services to Liverpool South Parkway, Walsall and Gobowen and increased services for Rugby, Llandudno Junction, and Motherwell.

Subject to approval from the Office of Rail and Road (ORR), First Trenitalia will operate two services per hour between London Euston and Liverpool Lime Street.

New trains

A new fleet of 10 EMUs and 13 bi-mode multiple units will be introduced by December 2022 to operate the enhanced timetable and replace the fleet of class 221 Voyager DMUs, which are used on services from London to North Wales, operating long distances under the wires. In the meantime, the fleet of 20 five-car Voyager trains will be internally refreshed.

First Trenitalia says the replacement of the Voyager fleet will enable it to reduce rolling stock CO2 emissions by 61%. LED lighting and driver advisory systems will also be installed to improve the environmental performance of the fleet.

Stations will be upgraded with improved waiting rooms, shelters and seating. New first class lounges will be opened at Preston, Stockport and Rugby, while ticket offices at Glasgow Central, Preston and Rugby will be modernised. Passenger Wi-Fi will be upgraded and 10 new secure cycle storage facilities will be built. There will also be 900 additional parking spaces and 100 electric vehicle charging points.

The new franchise will invest £20m in performance enhancements, including developing joint plans with infrastructure manager Network Rail to reduce incidents and installing onboard and trackside infrastructure monitoring equipment.

FirstGroup: no more franchise bids

Following confirmation of its win in the WCP procurement, FirstGroup chief executive Matthew Gregory confirmed that the firm will not be bidding for any upcoming rail franchises in Britain.

“The differences between this contract and more traditional rail franchises were reflected in the terms set out by the DfT, which has resulted in a more appropriate balance of risks and rewards for us as operators,” Gregory says.

“The WCP first phase allows us to earn returns on the significant investments in services and facilities for passengers but protected by a much improved revenue risk sharing mechanism. This will transition to a management contract in the second phase, ensuring we can really focus on using the respective skills and experience within our joint venture to deliver the desired benefits of the HS2 project for passengers and the country.

“The Partnership strengthens and adds a fourth franchise to our UK rail portfolio. Following this award we will not therefore be seeking new franchising opportunities for the foreseeable future over and above our current negotiations with the DfT to extend Great Western Railway (GWR). Our focus remains on delivering sustainable shareholder value and we will actively manage our rail portfolio and its risk and reward profile accordingly.”

FirstGroup says its board has carried out extensive reviews of the WCP proposal and the bid assumptions have been tested and revalidated in accordance with the firm’s May 30 commitment to seek an “appropriate balance of potential risks and rewards for shareholders.”


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Western Greece: Major transportation projects underway in Achaia prefecture

Νίκος Καραγιάννης



Σιδηροδρομικός Σταθμός Αιγίου

One of the most active -construction-wise- parts of the country, tends to become Achaia prefecture, belonging in the Region of Western Greece, with many different projects being at the design or tendering stage.

The first major step was taken in 2017 with the completion of the western section of Olympia Motorway -from Kiato to Patras- changing Achaia, as the routes to other parts of the country through the new motorway network became much easier and safer.

Today, Achaia is preparing for a series of major infrastructure projects that will further develop transport networks and transform the region, with the main focus being on Patras, Greece’s third largest city.

However, this process is quite problematic as multiple factors have contributed to delaying the implementation of these necessary projects.

The active «fronts» of Achaia

The most important project concerning Western Achaia and its neighboring Ilia prefecture is of course Patras-Pyrgos Motorway and the changes that may be brought by the new Government in the «legendary» sliced project with the 8 contracts.

The second major front is the railway works which, from Aegion onwards comprise 3 sections: from Aegio to Psathopyrgos, from Psathopyrgos to Rio and from Rio to Patras Port.

The first two sections are under construction, for the new double-track railway line infrastructure. Next year will be crucial for the auctioning of projects that are essential for the reopening of the double-track line with electrification, all the way from Aegion to Rio.

The aim is for the project to have been completed by 2023 and the new, modern train to reach the  entrance of the city of Patras.

The third section prepares a contract that includes the study and construction of a comprehensive project for infrastructure, electrification, signaling, ETCS and stations from Rio to Aghios Dionysios with updated decisions being expected by the new Minister.

At the same time, the extension of the successful Suburban Railway of Patras, from Aghios Andreas to Kato Achaia, is due to operate in 2019. The first test routes will start in the next few days.

Apart from the above, another issue is the arrival of the natural gas. Movements are constantly taking place but to this day there are not any definite plans.

Another critical infrastructure is the completion of Peiros-Parapiros Dam which is in its final stage of construction. The debate remains about who will be the administrator of a project promising to solve water supply and irrigation issues throughout Achaia.

Finally, the completion of the construction works in the Port of Patras is expected soon. Here, due to the disruption of transport networks in the previous years, a large decline in the traffic  of the port has been observed.

Today, its lack of connection with the railway network is directly connected to its disadvantage in the freight transport sector, while in other ports such as Piraeus, Thessaloniki, Volos and Alexandroupolis, this infrastructure is directly linked to their growth path.

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Thessaloniki Airport “Makedonia” selected by the Airline Industry

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Thessaloniki Airport “Makedonia” was nominated by leading airlines and shortlisted for the «World Routes Airport Marketing Awards». This is the first time that a Greek regional airport secures a top 5 nomination in the «4 to 20 million passengers» category.

The nomination criteria included and examined the efficient management and support of airlines, route development strategy, the level of overall cooperation with the airlines as well as the implementation of innovative airport marketing solutions. Following an evaluation by an independent committee consisting of top industry executives worldwide, the winner will be announced in Adelaide at the “Routes Word 2019” conference in September. The other shortlisted airports are Budapest, Malta, Oakland and Stuttgart.

Mr. Giorgos Vilos, Executive Director of Commercial & Business Development at Fraport Greece, commented “Our participation in the final stage of the awards, is a great honor for the Thessaloniki Airport “Makedonia” and Fraport Greece. First and foremost because this the first time that a Greek regional airport is being shortlisted in a category with other top airports, but also because the shortlisted airports are being nominated by the airlines, a fact that proves that the industry acknowledges the quality of our work across all levels.”

For more than 20 years, “Routes” rewards excellence and innovation in air transportation. This year’s «World Routes Awards», are more competitive than in the past, as according to the organizers, there is a record-number of candidacies.

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