Well, the Route Update Announcement (RUA) is here and the documents associated with it contain quite a bit of material about the business case for the railway. Here are some points that I found interesting.
Transformational Growth (ref: Economic and Technical Report Appendix 4 pp.59)
If you are environmentally conscious and concerned about the level of development we have already seen in our area (and that included in local plans), perhaps you think that new railways are a green form of transport. We could have the electric car vs rail debate, or we could talk about the lack of interest that EWRCo. have shown in taking freight of the road, or even the vast embedded carbon in construction of a new railway. But there is more direct evidence in the RUA material about the scale of EWR dependent housing development (economic growth’s ugly sister) that EWRCo. are assuming in their business model.
Look at the assumed growth in Cambourne and Tempsford from development dependent on EWR. Together, they would be houses for an additional 97,400 people and just about all on green field / prime agricultural sites. For comparison, the population of Cambridge in the 2021 census was 125,000. These are also only the people within 2km of an EWR station – the population of Milton Keynes is much higher than 66,000 shown in the table. The EWRCo. objective is to get more people commuting into high paid jobs in Cambridge where they can generate income and taxes for HMRC. But EWR is not very efficient and doing that. Not everyone in the new houses will commute to Cambridge and not all of them will use rail – see above for some optimistic assumptions. As usual, EWRCo.’s journey times are ridiculously optimistic since they do not include first and last mile or the time spent waiting for the next train or indeed the fact that rail tickets are just really expensive.
We had some level 2 BCRs in the 2020 Option Report which were all pretty low. Since then, the cost estimates have “matured” and I was going to say there had been inflation. However, notice this table is still at 2010 prices (PV) so we can add at least 30% to all these numbers to get to today’s prices.
The point is that the level 2 BCRs are all very poor and even adding a huge allowance for yet more “wider benefits” (tax revenue from new jobs), it’s still not looking like a good investment.
The rational decision here (unless, like EWRCo. employees, your job depends on it) is not to do the project. If you had to do it the best option is clearly HR2. But EWRCo. have chosen HR5 which has the lowest BCR. Strange, and perhaps indicative of the power of the Triple Helix. Read on to find out…
Updated Costs (ref: Economic and Technical Report Appendix pp.86-87)
Before we go there let’s have a deeper look at the construction cost comparison and what those HR numbers are. Here is the table with the latest costs and an explanation of the HR numbers. EWRCo. do not state the basis year for the costs.
There is also a caveat that HR1 uses a 4-track northern approach to Cambridge (NATC) while HR2 uses a new 3-track approach for the NATC. That presumably doesn’t involve knocking down any houses. It’s good that they now agree this is possible.
It also means that we can work out how much cheaper it is to approach Cambridge from the north than from the south. Base cost (HR3) – base cost (HR2) = £2.37Bn-£1.98Bn = £390 million. Actually, based on HS2, Transpennine etc, we should definitely be using the upper end of the risk range figures. That would be £620 million.
Similarly at the Bedford end base cost (HR5) – base cost (HR3) = £3.35bn – £2.37bn = £0.98bn, with the risk added £1.57Bn. You could do a lot for Priory Country Park on the Varsity route for that.
EWRCo. analysis assumes huge green field housing developments outside any local plan and, with the demise of the centrally driven OxCam Arc, no clear means to deliver or spatially plan them around EWR. EWRCo. analysis also assumes journey times that make no allowance for first and last mile. That implies perfect “place making” meaning they assume that everyone can get to the station immediately at both ends of the journey and a train just happens to be waiting for them. Despite all this, they can only get to a BCR less than one with 2010 prices. Furthermore, of the four options analysed, they picked the one with the worst BCR which avoids any damage to the Priory Country Park and has the first station that it reaches in Cambridge as Cambridge South and the Biomedical Campus (CBC).
They are targeting the creation of 80,000 jobs in addition to the 17,000 already there. There is little room to expand the CBC since it is hard up against the Green Belt and was not the prime focus for the Greater Cambridge Local Plan.
Both the northern and the southern approach to Cambridge can easily serve all three Cambridge Stations. The economy of the space constrained CBC to the south is easily balanced by the Science parks and new planned developments to the north of Cambridge.
Enter the Triple Helix (Economic and Technical Report §6.4.19)
There have in the past been indications of rationality from government about EWR and the OxCam Arc. Remember Grant Shapps was going to cancel the project. Michael Gove ditched the centrally controlled OxCam Arc. There were signs of Huw Merriman seriously talking about the NATC (it’s cheaper and better for freight). The NATC is even used as the reference heavy rail comparison in the RUA’s light rail study document published as late as January 2023.
As we have seen from the details of the RUA report there is no business case, and the chosen route is has the lowest BCR. But, to mis-quote J.R.R. Tolkien’s Lord of the Rings:
“Victory was near, but the power of the Triple Helix could not be undone”.
It seems that the RUA material has been changed in the run up to the announcement which turns out to be more of a route confirmation rather than an update.
I am looking at this strange section in the Economic and Technical Report
§6.4.19 “The Oxford-Milton Keynes-Cambridge region is further advantaged by its access to a unique ‘Triple Helix.’ The Triple Helix is an established concept that demonstrates overlapping interactions between academia and universities, industry and business, and government and public sector institutions. The close proximity of these institutions and organisations to each other form overlapping circles or helixes.”
It then goes onto list three life science related triple helixes involving players from the CBC. Here is the first one:
- Astra Zeneca on the CBC (had they actually moved there in 2020? Having spent £1Billion on their new HQ at the CBC is there any evidence they would build another one there because of EWR?)
- Government – In Downing Street / Westminster
- The University of Oxford (specifically the Jenner Institute which is a 30 minute bus ride from Oxford Station)
These three entities successfully worked together on the AZ vaccine without EWR in place and there is no evidence that EWR would have made any material difference to that project, especially during a lock down where rail travel was restricted.
There is nothing unique about the CBC Triple Helix, nor does Silicon Valley depend on rail rather than the roads.
But despite all logic, this example seems to appeal to HM Treasury at an emotional level and hence connecting to the CBC first is clearly essential to get this project funded. Even if it means signing off a loss making project and compounding the error by going for the route which their own analysis says has the lowest BCR. It’s a sorry state of affairs for our democracy, but HM Treasury is the customer and the local people and logic really don’t matter.
That’s the meaning of the Triple Helix.