Business Case news

East West Rail Co. Have Overstated EWR Benefits

In response to an open letter from Cambridge Approaches, EWRCo. tackled the important issue of the economic justification for the railway. They made the following statement.

By providing reliable, affordable and sustainable transport for people in and around Cambridge, businesses will thrive and grow, igniting an exciting ecosystem of business and academia that The Economist recently reported could contribute up to £274bn per year for the UK in gross added value. Seen in that context, the value driven by EWR is clear. More than that, it’s a catalyst for economic growth that will support the wider UK recovery.” East West Rail Co. Article in Cambridge Independent 16/8/2022

Implication – build EWR and you will get £274bn/year just from the Cambridge economy. Let’s fact check this claim.

The article they refer to in the Economist actually says:

“A study prepared by the Oxfordshire Local Enterprise Partnership in 2020 found that the region between Oxford and Cambridge contributed £111bn in gross value added to the economy every year; the government reckoned that could rise to between £191bn and £274bn a year if a programme of building created new homes and linked up towns by rail and motorway.” The Economist 20/7/2022

So the figure is actually £274bn -£111bn = £163bn for the whole area between Oxford and Cambridge inclusive, not just Cambridge. Which just happens to be the same figure as is quoted in the “Transformational” scenario of the National Infrastructure Commissions (NIC) report “Partnering for Prosperity” on the subject of the OxCam Arc.

Whoever wrote the article in The Economist clearly does not want to mention the OxCam Arc because they know that the government side-lined that project in favour of levelling up back in February 2022.

This NIC report is in turn based on work from Cambridge Econometrics which was analysed by Oxford Professor David Rogers as shown:

Prof. David Rogers analysis of Cambridge Econometrics Report underlying Partnering for Prosperity Report 6/5/2021

The part of the £163bn GVA attributable to transport and agglomeration is only 9.2% of the total. EWR Co. need to tell us what tiny fraction of that they think EWR will contribute – if the OxCam Arc Transformational scenario were adopted and they can entice a significant number of people to actually use their EWR.

EWRCo.’s article is probably overstating the benefit of building the railway by at least two orders of magnitude. Even that assumes that the OxCam Arc transformational scenario is actually built.

The same article from EWRCo. goes on, implicitly accepting that car owners may prefer not to use their EWR. More broadly, there are a variety of reasons why owning a car is not an option for many people. Perhaps the purchase, maintenance and running costs of a car are just too much, their homes do not have access to parking, they have physical limitations which don’t allow them to drive, or they are prioritising sustainability for themselves and their families.”

One question – how many of these highly-paid transformational scenario biotech workers are not going to be able to afford to run a car?

If you are reading this from EWRCo. and you can understand the issues pointed out, then I suggest you need to submit a correction to the Cambridge Independent or risk losing credibility.

12 replies on “East West Rail Co. Have Overstated EWR Benefits”

It is scandalous that EWR could massage the figures to show a benefit that doesn’t exist. Surely they must know if the railway does get built they will be found to have built a loss making white elephant.

“Surely they must know if the railway does get built they will be found to have built a loss making white elephant.”

Bluntly: so? They’ll have cashed their cheques and run for the hills by then. Loss-making? White elephant? The people driving this project won’t (and don’t) care about that.

It’s the polar opposite of turkeys voting for Christmas (a suitably analogy escapes me). ‘People that make money from EWR say EWR is a jolly good idea.’ – colour me shocked.

Deceitful – so what can be believed from EWR Co? EWR Co are not choosing the right route and are also not on track with their business case … this needs to be challenged at high level!

Hi Peter, As William pointed out in his excellent response to the Bridget Smith letter (see his post on this site) “Diesel powered trains emit about 5 times less CO2 per passenger or freight kilometre than cars and lorries.” So if a diesel powered EWR was indeed replacing a significant number of cars or lorries there would, in time, be a big emissions savings (after the carbon costs of the construction itself were “repaid”). Electricity would be better, of course, but either way what the EWR consortium has failed to show is that the train would in fact replace these cars and lorries, or that the route was chosen to maximise the replacing of cars and lorries. To my mind, that should have been the first and strongest argument they could have made – the fact they didn’t make it leaves us wondering whether they actually believe the train will get much use. Or maybe, since the whole scheme is based on creating massive growth in the Arc, they couldn’t make the numbers work, and both environmentally and economically it’s one big gamble. It’s pretty sad to me, at this time of environmental and economic crisis, that the government, which set up the EWR company, has failed to forefront the environmental argument. I think we’d have had a better scheme if they had.

Hi Michelle,
I was really pointing out the farce of building a railway in the 21st Century that isn’t electric from inception!

Is there a standards body that this could be reported to? Surely a correction statement from the article authors is warranted ?

To add to the above: Once the A428 is duelled from Cambourne to Blackcat travelling between Cambridge and MK will be transformed – especially if it was in electric cars as you have pointed out earlier.
And another great benefit of going to Cambridge North is a possible link into Northstowe encouraging more local use of railway with all the associated benefits in a way that keeping South couldnt possibly match.

Brilliant comments and follow-ups.

Do we know what the Terms of Reference are for this EWR Company when it was set up? I suspect that the time lapse since then has changed a majority of the criteria to negative or non-existent, in which case it should be dissolved. It can’t be self-funding.. in which case the body paying it must have some means of assessing its current viability and future worth.

Their arrogance and incompetence is staggering they can’t even be bothered to do enough background research to get the facts right they are quoting. In addition they clearly think the population they are talking to is too stupid to realise and they can fob them off with unsupported references and quotes. It is NOT sufficient or “clear” to state an article from The Economist to justify a multi bn £ project like this. Its not good enough and for the fact they are frying several millions each months this is definitely inadequate. As for the economic forecast, this railway will not help most commuting to Cambridge. There is only a station planned in Cambourne and Bedford so how many people in the industry sectors we are talking about here (like science) will commute from there? Everybody else who lives within normal commuting distances around Cambridge will have no benefit from this whatsoever.

I think this line is likely to be a white elephant if this new line doesn’t get to Cambridge from Oxford , How Many people will Board the service if it Hits the buffers at Bletchley, Passengers will just Board the X5 service at Milton Keynes. This isn’t good enough for passengers who wants to travel to Cambridge from Oxford, I already hear passenger’s on the Stagecoach coach service from Cambridge to Oxford complaining to the driver about the three hours coach journey to Oxford, this isn’t just about people of Cambridge it people the other side of Country. The decision needs to be made on which route this line going beyond Cambridge to Bedford, Time to stop arguing.

Leave a Reply

Your email address will not be published.