TOPIC 28: THE WAVERLEY/BORDERS LINE SCOTLAND:

Wp Waverley/NOTES 2009

Members of the Scottish parliament seem determined to spend one third of a billion pounds opening the railway from Edinburgh southwards to Tweedbank, see map also see schematic. That is known as the Borders line or the Waverley line. Here is the story.

The Edinburgh to Carlisle line via Galashiels was closed by British Rail in the 1960s. The following is from a debate in the Lords in 1968 where the speaker is Lord Shepherd and where Hawick is south of Tweedbank/Galashiels.

My Lords, I do not think that the noble Baroness and other noble Lords are being particularly fair. I know that they are in a wonderful position of chasing the hare because of their numbers. So far I have dealt only with what are the costs of operation. I have given one figure of the estimated revenue. That is one estimate. But I am going to deal with some of the figures that the noble Earl, Lord Kinnoull, referred to, which I think will put a different picture to the rather rosy optimism that has been expressed on traffic development in this area. Perhaps I may give those figures; I think it may bring this debate to a degree of realism. If we take the daily service from Edinburgh to Hawick, Monday to Friday, the number of passengers who joined at Edinburgh in 1964 was 777 per day; in August, 1967, the number was down to 604. Arriving at Hawick—in other words doing the complete journey, or an appreciable part of the journey—formerly the figure was 461, and in 1967 it was down to 327. That is the service from Edinburgh to Hawick. If you were to look at any of these figures you would see a continual decrease, year by year.

629 However, perhaps the noble Baroness may think this of particular interest as to what we might call the regular users of the line, because in the end that is what a railway depends upon for its revenue. In 1955 the number of season tickets issued in these towns in the Border was 6,100. In 1965 the number of regular users had dropped to 2,600. In the case of Galashiels there were 18 season-ticket holders—this is, for each day—two to Hawick and 16 to Edinburgh. In Melrose there are 3 regular daily travellers to Edinburgh St. Boswells, 8 season-ticket holders, all to Edinburgh; Hawick, 12 daily travellers, 3 to St. Boswells, 3 to Edinburgh, and 6 to Galashiels. These are the regular passengers on these lines. When you look at these figures I do not think you can really say that the Railways Board could have a great deal of optimism as to a developing passenger business on this line.

That is what they propose to open at least as far south as Tweedbank, a distance of 40 miles.

Firstly we comment, the “principles” used to justify such schemes, would, if applied to the economy as a whole, lead taxpayers to subsidise every loss making enterprise in the land, provided only that some spurious social benefit could be found, see topic 24 and 24a.

Even within that chicanery the Waverley scheme is insupportable. In 2006 the cost was set at some £151 million. Despite support from supposed buoyant development the project was then considered marginal at best.  Except on high growth assumptions the benefit to cost ratio was below one.  Furthermore, the £151 million should have been increased by 40% to satisfy the evaluation procedures, but it was not.  The cost is now £295 million and mass house building is a remote prospect. Again, the 40% contingency normally required appears missing.  Heaven knows how the proposers keep straight faces whilst claiming this nonsense remains viable.

Let us be clear. The proposal will cost at least £300 million. The proposer suggests that by 2013 there will 4,000 return tickets per day. Hence the cost per regular user would be £75,000. However, the Arup report suggests the forecast is perhaps 3 times too big.  Hence the realistic cost per regular user may be an astonishing £225,000.

Undaunted, the proposers have said that the scheme will cover its operating costs within 6 years.  Who on the sane side of sanity can believe that? After all, national rail (in areas generally of much higher population density) has not covered its operating costs these last 50 years or more.  Instead subsidy to national rail over the 20 years to 2015 is likely to top £100 billion, over £4,000 for every household in the land.

If our economy is to survive, financial reality must take hold in rail as elsewhere.  The plain fact is that if a scheme is not viable in purely financial terms then it should not be built - unless the nation positively wants to go bankrupt, but: perhaps the nation does want to go bankrupt.  After all taxpayer's subsidy to community rail amounts to £300 million annually, corresponding to:

• £5 million per year per line or to;
• £230,000 per year per route-mile or to;
• 127 pence per passenger-mile

See our note on community rail, topic 3.

Let alone £100 billion, equivalent to £4000 for every household in the land for high-speed rail.

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Here is another telling comparison: If this Borders proposal carries as many as 3,000 trips per day then the capital cost per trip over 50 years works out at £300 million divided by 3,000 and by 300 days per year and by 50, namely £6.70 for each journey, equating to £13.40 per round trip. If we assume those trips are by regular users the cost would be £4,000 per year for 50 years to every one of them, let alone the maintenance and operating cost subsidies. Would it not be cheaper to provide all of them with free bus passes for 50 years or, better still, free cars complete with fuel, insurance, road tax and servicing - why not do that - they would enjoy it so much more than sitting on a train?

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For reference, here are some of the cost benefit numbers:

TABLES A and B from the outline business case

At least two matters stand out.  Firstly, this proposal is supposed to benefit the rest of Scotland to the tune of tens of millions of pounds.  How can that be?  After all, despite the rhetoric of a 4-car train every half hour, the reality is that there may be no more that a one or two-car train tottering up and down occasionally. Secondly inward investment nearly doubles the high growth benefits but has no effect at all on low growth benefits.

In any event the analyses produced benefit to cost ratios that ranged from 0.9 to 1.04 based on a scheme cost of £151 million void of the usual 40% optimism bias.  Those ratios were so low that one would have expected the scheme to be abandoned forthwith, but it was not. Subsequently the scheme cost has risen to £295 million void of optimism bias and still the scheme has not died. 

If the passenger forecasts were cut back by a realistic factor of three, and if optimism bias were added, to the costs perhaps that would so the trick.  However, politicians’ appetite for spending other people’s money seems insatiable so ...... goodbye the taxpayer.

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For further reference here are some of the passenger forecasts, all of which should probably be divided by three.  The forecasts of growth are particularly suspect.

** Assuming all trips go to Waverley

PDF: 

NOTES 2009.pdf