This proposal was the subject of public inquiry. Part one of that was in 2010-11. We appeared for the objectors. This piece summarise the most important points to emerge. A version is on our web site along with some of the evidence presented.

The scheme

The scheme involves:

• Adding a track to the single track railway between Oxford and Bicester, a distance of some 12 miles or 20 km.
• A connection, the Bicester “chord”, between that line and the Bicester to London line.
• A new station at Eaton Parkway immediately to the North of Oxford.

The cost was circa £185million at 2009 prices.

The purpose of was to attract passengers to London, currently using the Great Western Trains from Oxford to Paddington, to Chiltern’s proposed service via the new station and Bicester to Marylebone.

The main inquiry took place in 2010 and 2011. It dealt only with Phase 1, costing £122 million.

The business case

The business case is summarised by the following table, taken from Chiltern’s evidence CRCL/P/1/A.

Table 1: Chiltern Railways Commercial Business case

We found that data improbable because:

• Chiltern was making substantial losses. The annual accounts for 2010 show an operating profit of only £7.7m, amounting to 6% on turnover, and that grant in that year amounted to £4.7m and that, despite the grant, the operation made a loss as a whole of £4.4m. The firm’s net debts (creditors minus debtors) amounted to £66,000 in 2010.
• The incremental maintenance and renewals assume no, or few, additional carriages and relates only to the 12 mile improvement. In fact additional carriages will be required, bringing wear and tear on the track all the way to London. Our evidence suggest that those costs should be £112m rather than the £26.3m in the tabulation.
• The incremental train costs are far too low. In defence Chiltern said  “….There is actually little change in the numbers of trains we need to lease once Oxford opens because many of the trains already run between London and Bicester and we get a productivity improvement from the fact that on the main line trains run faster than they do today due to the works we have underway at present to improve the speed, so we can sustain a more frequent service overall with the same number of trains”. However, (a) without the Order Scheme’s services Chiltern would be able to reduce its fleet. Hence the trains required by the Order Scheme should be assigned to it. Our competing calculation, based on passenger flows, showed that the additional cost may be £34m over 9 years rather than the £7.6m cited.

We concluded that the notion that this proposal is self funding is a fiction. In general terms there really is no reason why the services can be any more profitable or loss making than is Network Rail as whole. We demonstrated that Chiltern, together with its track costs, costs the tax payer circa 6 pence per passenger-km, a number which was very equivalent to Network Rail’s average.

The economic case

Chiltern’s summary Table 4.1 of their evidence CRCL/ P/5A provides as follows:

The multiplier was said to follow from advice in the Passenger Demand Forecasts Handbook, the PDFA, produced by the Association of Train Operating Companies, ATOC.  That manual is privileged and was not released at the inquiry. Consequently the rationale for the weighing of four is hidden from us. However, if we add to a 20 minute drive time (a) 10 minutes for congestion or uncertainty and (b) ten minutes for parking and walking to the station platform and (c) if those are weighted, as suggested by the DfT, by factors of two and 2.5 respectively then the multiplier on the drive time exceeds three. To that must be added vehicle operating costs providing a value approaching four. However, the walk and, in this case, congestion times are independent of the drive time. Consequently rather than the model being multiplacatory it is additative. Hence, the multiplier of four on drive time savings is likely to be too high by a factor of at least three. That would reduce the £222 million user benefits in the table to £74 million.

Furthermore the non-user congestion savings depended on multiplying the vehicle-km removed from the network by standard values. However, in this case congestion occurs at two or three roundabouts, and would not be much influenced by the scheme. For those reasons the £116.3 million in the table may be overestimated, perhaps by a factor of four.

Taken together the forgoing would reduce the Net Present Value, the NPV, to £53 million.

Lastly, the accepted procedure adopted in these analyses is to subtract fares revenue from costs, the £81.6m in the table. However, that is plainly wrong. The payment is a transfer, generating no resources of itself, see topic 24 http://www.transport-watch.co.uk/topic-24-nata-refresh-and-burger-bar

Staff and rolling stock.

As an aside we found that Chiltern had circa 190 vehicles (traction units plus carriages) and 740 employees in 2010. Hence there were nearly four staff per carriage, excluding those employed by Network Rail to maintain the track

Conclusion

We conclude that both the business case and the economic analysis for this scheme could be considered frauds upon the public and politicians alike. Nevertheless the Inspector found in favour of Chiltern and upwards of one quarter of a billion pounds will be wasted.

The whole will of course encourage the “East West Rail” proposal, connecting Oxford to Cambridge and promoted by the railway lobby. The cost of that will be huge and the product entirely trivial.