Satt Singh Basra’s Post

Great British Railways’ long-term business plan must be informed by five-year funding cycles Great British Railways’ (GBR) long-term business plan must be informed by short-term funding settlements because a long-term operational funding commitment “wouldn’t be realistic” according to Network Rail chiefs. GBR is the working name for the integrated rail body (IRB) that will be created when the Rail Reform Bill becomes law. This will bring the UK’s railway infrastructure and services together under one “guiding mind” that is expected create efficiencies and smoother operating of the railway network. The Rail Reform Bill is currently in draft and undergoing pre-legislative scrutiny by the House of Commons transport select committee, which took oral evidence from Network Rail chief executive and GBR Transition Team lead Andrew Haines and Network Rail chair Peter, Lord Hendy of Richmond Hill on Wednesday 22 May. A main topic of discussion was the business plan that the #IRB will be required to produce when it is officially formed. The Bill does not stipulate any timeframes or consultations for the production of the #businessplan and leaves wiggle room for the IRB to change it after publication, so the interviewees were asked if this was the right approach. Hendy it’s “very helpful” that the direction to create a business plan is “generalised” as this will allow the people who draw it up to interpret what it needs to contain. “You would want to see a long-term plan [with] the budget and business plan on the short-term basis being an interpretation of that,” he added. This would have to “meet the bottom line for the railway in profit and loss terms, which is demanded by government”. Haines commented that the Department for Transport (DfT), United Kingdom has asked his team to develop a long-term strategic plan that looks 20 to 30 years ahead, but this does not set out funding requirements. “I would love to say that there was a cheque from the Treasury for 10 to 15 years, but it’s not credible to think that you’re going to get that level of certainty for your operating expenditure,” he said. “it doesn’t suit anyone to be tied to a funding stream for 10 to 15 years, which then can’t accommodate shocks or changes.” In the following session of the transport select committee, rail minister Huw Merriman and DfT director general for rail services Alex Hynes were asked for their thoughts on the requirements for a GBR business plan and what form it might take. Merriman said it would work similarly to the current Network Rail control periods. “The plan is initially determined as to how the high-level output specifications – the statement of funds availability – will be operating. Then that plan is put forward,” Merriman said. “In that regard, I think it actually works rather well.” He continued: “I think the thing I’d be keen to ensure is we don’t have a sort of lag as one five-year period ends and another one starts; we’ve heard about those before.

Deutsche Bahn Appeals Court Ruling Concerning Rising Stuttgart 21 Costs Deutsche Bahn (DB) has applied to the Administrative Court of Baden-Württemberg to appeal a lawsuit concerning billions of euros in additional costs for the #Stuttgart21 project. DB asserts that its project partners—the state of Baden-Württemberg, the city of #Stuttgart, the Stuttgart Region Association, and Stuttgart #Airport—should bear shared financial responsibility for the cost overruns for this high-profile #rail #infrastructure #development. According to DB, the total costs for the Stuttgart 21 project have now escalated to approximately 11 billion EUR, well above the original estimate of 4.5 billion EUR. The railway company argues that joint responsibility for these additional expenditures is implied within the original financial agreement. However, the Stuttgart Administrative Court’s initial ruling dismissed DB’s argument that the project partners were financially obligated to share in the additional expenses. This appeal follows multiple legal setbacks, with previous lawsuits unsuccessfully seeking to enforce financial participation from the project partners. DB has voiced strong opposition to the current ruling, maintaining that cost-sharing aligns with the project’s joint responsibilities. The ruling is not yet legally binding, allowing DB an opportunity to appeal. The “Speech Clause” Central to DB’s argument is the “speech clause” in the Stuttgart 21 financing agreements, which DB believes establishes grounds for the project partners to contribute further. DB maintains that the history of the project, financial negotiations, and the contractual provisions collectively signal a need for shared financial responsibility between all partners. The outcome of DB’s appeal will likely shape future decisions on infrastructure project financing in #Germany, particularly when project costs exceed original estimates. Stuttgart 21 is a massive #infrastructureproject aimed at transforming Stuttgart’s rail station into a modern, subterranean hub connected to key regional and international routes. The projected costs have increased due to various factors, including construction complexities and delays. While DB, as the project developer, remains financially responsible for these costs under the current ruling, it is now pursuing a judicial review to enforce cost sharing with its partners. https://lnkd.in/eQKtsaPY

Transport for London paid for its day-to-day operating costs without extraordinary funding from government in 2023-24 for the first time since the pandemic, but still needs a long-term capital funding settlement for major projects New Civil Engineer reports. TfL’s Quarter 4 financial report for 2023-24, which will be presented to the board on 12 June, revealed that the capital’s transport operator completed the financial year with £138M operating surplus, which was £59M above its budget. It says this demonstrates its “commitment to achieving operational sustainability”. When it comes to capital expenditure on asset upgrades, TfL spent £139M more than the previous year. This was £18M ahead of budget for 2023-24 thanks to acceleration of works into this year. TfL has capital funding in place for 2024-25, with a £250M contribution provided by government, but it still needs a long-term funding settlement to “deliver major schemes efficiently and effectively”. Providing an assured funding agreement in the current climate is crucial in delivering a robust network and strong supply chain for the London and South region but what are your thoughts? Let us know below👇 #RIAMember https://lnkd.in/eSTYKiYq

The LNP state government claims CRR will cost more than $17 billion and not be ready until 2029! Another major cost blowout which brings the current major infrastructure spend on the Olympics venues and infrastructure build into the spotlight. Minister for Transport and Main Roads The Honourable Brent Mickelberg 'Labor racked up more than $17 billion for Cross River Rail Cross River Rail will cost more than $17 billion – more than three times over budget. Completion date to blow out from 2025 now to 2029. Labor spread funding across multiple budget pools to hide the real cost of Cross River Rail. The true cost of Cross River Rail is expected to exceed an astronomical $17 billion, in what could be Labor’s biggest act of deceit. Labor promised Queenslanders that Cross River Rail would be delivered with a budget of $5.4 billion and a completion date of 2024. The Crisafulli Government has uncovered the true cost of the rail project is likely to exceed $17 billion and may not be complete until 2029.' In Estimates earlier this year, then Transport Minister Bart Mellish stated, “the majority of construction on Cross River Rail is expected to be complete within 2025 and first passenger services are expected to commence in 2026.” That timeline was never achievable and Labor knew it. On construction completion, the tunnel must be independently certified by the National Rail Safety Regulator and this testing and commissioning phase takes at least two years to complete. The recently exposed cost blowout should be cause for reflection. The original projected cost was $AUD 5.4 billion and the current estimate is $AUD 17 Billion. As a project manager the reasons on large infrastructure projects is not poor planning and incompetent project management, it is political manipulation. many projects just would never commence if the true cost were to be detailed before the commencement. Whether it be Hospitals, Nuclear Plants, Electricity infrastructure, Schools, Olympic Venues, Freeways, Tunnels, Rail Network, Ports and Airports. The cost of infrastructure is gargantuan. Australia must understand we need this infrastructure if we are to have a strong and functioning economy. We can readily go to cities where infrastructure has not kept pace with population and technology. Decay and chaos, pollution and poor quality of life are the result of a cessation of infrastructure building. If we are to build prosperity and wealth as individuals and a community we need to Build and Plan for infrastructure. We also need better integrity in the procurement methodology to identify these huge costs. A project that blows out three and a half times the original estimate is a catastrophe. Queensland is about to build for the Olympic Infrastructure 2032, and we may be assured there will be surprises! https://lnkd.in/grTvymp8

Deutsche Bahn (DB) has applied to the Administrative Court of Baden-Württemberg to appeal a #lawsuit concerning billions of euros in additional costs for the #Stuttgart21 project. DB asserts that its project partners—the state of Baden-Württemberg, the city of Stuttgart, the Stuttgart Region Association, and Stuttgart Airport—should bear shared #financial responsibility for the cost overruns for this high-profile #rail #infrastructure development. According to DB, the total costs for the Stuttgart 21 project have now escalated to approximately 11 billion EUR, well above the original estimate of 4.5 billion EUR. The #railway company argues that joint responsibility for these additional expenditures is implied within the original financial agreement. However, the Stuttgart Administrative Court’s initial ruling dismissed DB’s argument that the project partners were financially obligated to share in the additional expenses. This appeal follows multiple legal setbacks, with previous lawsuits unsuccessfully seeking to enforce financial participation from the project partners. DB has voiced strong opposition to the current ruling, maintaining that cost-sharing aligns with the project’s joint responsibilities. The ruling is not yet legally binding, allowing DB an opportunity to appeal.

It's a mark of how badly this critical national infrastructure matter has been handled by the government that today's 'kick for touch' announcement has been greeted with relief in some quarters. The relief part comes from the fact that the government has not entirely quashed the prospect of fully rail-enabled ferries. To be clear, were this to happen, a major part of the NZ freight system would be critically compromised with the South Island rail network severely degraded; leading to billions of dollars of stranded assets, a large financial write-down of Kiwirail's value, and a substantial shift of freight from low carbon rail on to diesel trucks driving on congested roads. It is critical that everyone who understands the value of a national rail network hammers home this point in the coming months. In terms of the rest of the announcement - a Schedule 4A company implies two things. The first is that the Minister wants greater direct control over the process. The company will be directly accountable to shareholding Ministers which will mean clearer flow of information and decision-making rights than when it's run through Kiwirail. I think that's understandable, but should be limited to the procurement process. The second is that it more easily opens up options for private sector funding. I think that the main reason for the decision being punted is that, having cancelled the original $550m deal with Hyundai in a political rush of blood, the government has now worked out that these large infra projects are actually incredibly complex. As predicted, there is still no outcome on the exit negotiations with Hyundai - they owe us nothing after their shabby treatment and will be extracting every last dollar. International ship builders will also be toying with us given the government's unreliable behaviour and evident desperation to land a deal. Similarly there is an extremely optimistic phrase about expecting the "ports to contribute substantially" to landside development. This is a naive comment. The ports are required to behave commercially. This negotiations to establish funding share between Kiwirail, Centreport, and Port of Marlborough for the original IREX project were enormously fraught and complex. No party will give an inch, and the government is dreaming if they think the ports will come to the rescue and pay any more for landside costs than they have to. Remember that seismic strengthening has to happen in Wellington. As a number of us said at the time that Nicola Willis made her rash decision in the first flush of being on the seventh floor - this will result in New Zealand receiving worse ferries, at a higher overall cost, delivered much later, while we continue to limp along with an old fleet that creates significant resilience and safety risks. Rail advocates have done a good job so far of keeping the pressure on for a decision that limits the damage, and that will be even more critical in the coming months.

𝗛𝗦𝟮 𝗰𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀 𝗳𝗮𝗰𝗲 𝗿𝗲𝘄𝗿𝗶𝘁𝗲 𝗮𝘀 𝗰𝗼𝘀𝘁𝘀 𝘀𝗽𝗶𝗿𝗮𝗹 𝗼𝘂𝘁 𝗼𝗳 𝗰𝗼𝗻𝘁𝗿𝗼𝗹 The Government is threatening to rewrite construction contracts on HS2 as ministers step-in to oversee the project amid spiralling costs. Louise Haigh MP said she is “reinstating ministerial oversight of the project to ensure greater accountability.” She added: “𝘚𝘦𝘱𝘢𝘳𝘢𝘵𝘦𝘭𝘺, 𝘵𝘩𝘦 𝘪𝘯𝘤𝘦𝘯𝘵𝘪𝘷𝘦𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘮𝘢𝘪𝘯 𝘏𝘚2 𝘤𝘰𝘯𝘵𝘳𝘢𝘤𝘵𝘰𝘳𝘴 𝘢𝘳𝘦 𝘢𝘭𝘴𝘰 𝘣𝘦𝘪𝘯𝘨 𝘳𝘦𝘷𝘪𝘦𝘸𝘦𝘥, 𝘸𝘩𝘪𝘤𝘩 𝘤𝘰𝘶𝘭𝘥 𝘭𝘦𝘢𝘥 𝘵𝘰 𝘴𝘰𝘮𝘦 𝘤𝘰𝘯𝘵𝘳𝘢𝘤𝘵𝘴 𝘣𝘦𝘪𝘯𝘨 𝘳𝘦𝘯𝘦𝘨𝘰𝘵𝘪𝘢𝘵𝘦𝘥 𝘰𝘳 𝘢𝘮𝘦𝘯𝘥𝘦𝘥.” Haigh said: “It has long been clear that the costs of HS2 have been allowed to spiral out of control, but since becoming Transport Secretary I have seen up close the scale of failure in project delivery – and it’s dire. “Taxpayers have a right to expect HS2 is delivered efficiently and I won’t stand for anything less. “I have promised to work fast and fix things and that’s exactly why I have announced urgent measures to get a grip on HS2’s costs and ensure taxpayers’ money is put to good use. It’s high time we make sure lessons are learnt and the mistakes of HS2 are never repeated again.” Regular meetings will start immediately where Haigh, Rail Minister Lord Hendy and the Chief Secretary to the Treasury will scrutinise delivery of the project whose budget could hit £66bn. The government added: “Over the years, the cost of Phase One has soared, due to poor project management, inflation and poor performance from the supply chain, without sufficient explanation of what is to be done to deliver to budget.” A wider review of how major infrastructure projects are delivered has also been commissioned which “will primarily draw on experiences of HS2 to date to ensure recommendations and learnings are applied to its delivery as well as to future projects.” Read The Ful Article Here: https://bit.ly/3Uhh2vn

#infra Deutsche Bahn Appeals Court Ruling Concerning Rising #Stuttgart21 Costs The railway companies sued to have the project partners contribute to further cost increases for the Stuttgart 21 project up to an amount of around €7.3 billion. The Administrative Court dismissed the claims in their entirety. The court denied both a contractual claim, in particular on the basis of the speech clause, and a statutory claim for the binding distribution of all additional costs. It ruled that he project partners do not have to make any further financial contributions to the additional costs of the Stuttgart 21 project According to DB, the total costs for the Stuttgart 21 project have now escalated to approximately €11 billion, well above the original estimate of €4.5 billion. The railway company argues that joint responsibility for these additional expenditures is implied within the original financial agreement. Sources #iaro and https://lnkd.in/eARqTGKA Julie Le Gall Frédéric de KEMMETER Fanny Arav Laurent Guihéry Laurent Fauviau Xavier Desjardins Nathalie Roseau

Are we on the verge of a new funding model for transport? An independent review commissioned by the Labour Party has called for high-level proposals to be drawn up by the end of the year for a new model of public-private partnership (PPP). https://lnkd.in/exKSGDkd #construction #funding #finance #ppp #infrastructure

Following the outputs from The Chancellor's audit of the government’s finances. The Secretary of State for Transport Louise Haigh has announced an internal review of the Department for Transport’s (DfT's) capital spend portfolio to find ways of closing a £2.9bn funding gap for this year, which could spell the end for some large infrastructure projects. Despite the chancellor announcing that one area where government purse strings would be tightened is “all non-essential spending on consultancy”. Haigh says that “external expertise” will be brought in to help make recommendations about current and future schemes. With the budget not due till October, what could this mean for current and proposed public infrastructure projects? Being the ultimate reflector that i am, a few question that comes to mind to me: 1) How does the budget constraints impact affect the long-term planning of major infrastructure projects going forward? 2) What criteria will be used to prioritise large infrastructure projects (what continues and what stops), and how will this impact regional development, enable transformation of the infrastructure to work for the whole country. A key priority for the Labour government highlighted in their manifesto. 3) How will the transport sector react/balance the need for sustainability with budget limitations? 4) In the context of budget constraints and scrutiny, how can Public-Private Partnerships (PPP) be leveraged to improve the efficiency and sustainability of large infrastructure projects I look forward to what comes out of this review and how the transport sector will react to this news. But also keen to hear thoughts from more brilliant Transport minds than mine Natasha Wardrop Katie Hulland Davin Crowley-Sweet James Whitticase Mike Brean Hannah Kitcherside Matt Smart Kieren Exley #budgetreview #DfT #Transport