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Thursday 23 January 2020

Time to take a firm grip on Whitehall

I was once called upon to drop everything and go have a look at someone else's scheme. It was essentially an engineering job, with a fair bit sub-surface, and the Balfour Beatty subsidiary who were the main contractor had already spent well into double figure millions, were a year late and only half-done. They were asking the client to double the budget. Well, reader, it was a pickle. They'd jammed the job to a standstill. Just one example - painting. It was a minor part of the job. They were painting steel and had already spent £0.75m putting the first coat on an area the size of a B&Q store roof. It had taken 10 weeks so far. They were using a specially formulated water-soluble steel paint to avoid hazardous fumes to other workers in the sub-surface part, only because of the damp atmosphere it cured at the speed of treacle. So they had a pair of mechanical engineers at £3k a week the pair to monitor paint curing. 

Well they knew they'd screwed up and went into construction industry defence mode - assume that everything you say, write, instruct or report will eventually be used as evidence in the Construction Court. So the monthly progress reports were bound volumes of 200 pages, the Gant charts cramming so many activities onto each A3 sheet  that you'd need a scanning electron microscope to read the text and the project team meetings attended by about 30 had to be held in the canteen - the largest space on site.

And it really wasn't their fault. They lacked any form of cogent leadership, and in the circumstances did what headless, directionless professionals will always do - retreated into rigid professionalism and risk-aversity. Well, I advised the client that it was a Gordian Knot. Further time extensions and budget increases wouldn't clear it, and the main contractor knew it. He had to pull the plug. He did, of course - but there was a sting in the tail. If I was so bloody clever, I could finish it. I did. The painting? My newly-appointed tame lead engineer and CDM supervisor were both sympathetic to my suggestion, and we closed the site to all other trades for 48hrs whilst a paint team used the solvent-based 'Jotun' paint used on North Sea oil rigs and finished it off. Cost £20k. And not a penny spent on mechanical engineers watching it dry.

I bore you all with that anecdote to underline the point that the HS2 scheme seems to smell awfully familiar to the job above and a few other failures I have seen. For a start, it's too big. Too big to be managed as a single scheme. Then it's irrelevant; the route it improves is not London to Birmingham but Brussels to Birmingham, and is part of the Ten-T spoke-and-hub transport corridor scheme devised to connect the subject nations of the EU. Finally, it adds nothing extra to GDP apart from the construction costs. Even Keynesians at least aim to get £1.50 of economic benefit for every £1 spent.

So scrap the London to Birmingham route in favour of track, signalling and crossing improvements and minor realignments of existing tracks. Split the balance of the Northern interconnects into coherent smaller packages and let them manage themselves. Look at modal swaps; do we really need steel wheels right into city centres, or can we have rail interchanges further out and rubber wheels and light rail  in the centres. More trams, everywhere - they're one of Europe's delights and I love them.

Allister Heath sums it up in the Telegraph; there's more at stake than just taxpayers' money 
This is a key test of Johnson’s determination: does he really want to help the rest of the country, or is it just PR? If the former, as we all hope and believe, he should replace HS2 with a whole list of new infrastructure projects focused on the North and Midlands, including roads and rail connections between cities, and cancel the London to Birmingham link. If he bottles it, the message will be grim: the Blob will have won a psychological victory, and its appetite for Tory flesh will have been whetted.


Stephen J said...

I think in this situation there is a deadly cocktail of contributors and their ego's a rustlin' with each other.

The bureaucrat is bent on pleasing his oppo's in Brussels (still, and to be expected), the politician has made a commitment to (whatever) marvellous vanity infrastructure project, and the EU cannot see a time when it no longer has any credit with the British government (the jury very much still out).

As usual, I would suggest that we carry on doing nothing to clear these ridiculous conundrums and stop massaging those egos, or we develop a local referendum question on the need for such a project. So far we only have anecdotal information about its advantages or disadvantages.

Unlike the above individuals, and as Mr. Raedwald points out, there are people that CAN make a reasoned as opposed to a personally advantageous decision, and if you group them altogether by way of a vote, you have a very good chance of achieving a fair result.

The constituency for any DD vote will find its own degree of localness as any given campaign develops.

DiscoveredJoys said...

I've already seen some pundits in the grip of the Concorde Fallacy. From Wikipedia:

In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. In other words, a sunk cost is a sum paid in the past that is no longer relevant to decisions about the future.

Plus with the case of HS2 there is also the 'political' cost that has already been 'spent', with many politicians and civil servants unwilling to be shown up as poor decision makers. However, as long as Boris moves soon, this cost can be 'written off' as the fault of a previous Government following EU plans which no longer apply.

We need to start thinking of ourselves as an island nation again, not as a province separated from the empire by an unfortunate stretch of water.

Mark said...

A number of years ago, I seem to recall an MP somewhere - west country way I think - asking a local council the cost of a bog standard zebra crossing (not even with lights).

The answer that came back was north of £100k. Of course every builder in the multiverse chipped in saying they would do it for some minute fraction of that.

Billion for a mile of railway? Just scaling up.

For fucks sake Boris, just cancel it. Stop throwing good money after bad. Who would actually squeal?

Raedwald said...

DJ - spot on. Disregard sunk costs. And in your DCF forecast, year zero is always Now.

We should really teach that in schools.

JPM said...

Who would actually squeal, Mark?

I don't know for sure, but maybe look through the Tories' donors?

wg said...

I became convinced that HS2 and TEN-T was all about getting EuroGendFor to where they were needed.
At present we are seeing military vehicles with EU flags patrolling the streets of France.

Tin foil apart - the money that is going into HS2 should be invested in our regional railways.
It seems extraordinary to me that Labour - and I presume the LibDumbs - can't bring themselves to oppose the project: the only reason that they don't it seems is their subservience to the EU.

DeeDee99 said...

The Remainer Establishment has scored a small victory by coming up with excuses to prevent Big Ben from bonging on 31 January. They would delight in achieving a much larger victory by making Boris continue with the EU's white elephant and p!ssing away £106 billion plus on HS2. He must scrap it.

The money should be spent on improving intercity rail connectivity in the north and smaller regional improvement schemes. The Taxpayers' Alliance can provide Boris with alternative priorities:

I add the Waterloo-Exeter mainline, which has stretches of single track when you get beyond Salisbury. The next station is Tisbury and you can wait for anything up to 20 minutes for a train coming in the opposite direction to clear the line.

As for Whitehall, the people who have to manage engineering contracts are not the people who negotiated and drafted them. HS2 was originally supposed to cost £35 billion; it's now £106 billion and rising. Outside of Government, that would automatically be justification to scrap the scheme.
Whitehall must be made to join the real world.

DeeDee99 said...

£9 billion already spent is "sunk costs" ... except much of that expenditure has been used acquiring land and property. That can be resold and with the blight of HS2 lifted, it may recoup more than was spent.
I expect the genuine "sunk cost" is only half what they are declaring.

Mark said...

Well I believe HS2 was instigated under Tony "I cannot tell a lie" Blair.

Try again

Dioclese said...

Scrap HS2. Scrape Heathrow runway 3. Built Boris Island.

Jpb done...

John Brown said...

HS2 is nothing more than an EU vanity project. It will do nothing for the North and in fact suck more business down to London, as has been demonstrated in Spanish HS projects. No-one ever mentions the ticket prices because these will be so expensive that only those travelling at the expense of the taxpayer will be using it.

Further, I believe that steel wheels on a steel track is out-of-date technology. It is very expensive to build and maintain, noisy and inflexible.

A far better alternative to city trams are trolley buses. Trolley buses are cheaper and quieter and can navigate hills and road obstructions. If it is necessary to mark out a “track”, then this can be done far more cheaply by painting the roads than by laying steel track.

I also believe a low cost, high capacity link between London and the North should be road and rubber wheel based (coaches) as it is clearly by far the cheapest option. Of course journey times are currently much longer as coaches currently have to navigate through traffic and this issue needs addressing.

So I propose :

- A dedicated road (motorway or coachway) for specially designed rubber wheeled transport (coaches) - so no traffic hold-ups - using the same route and terminals as the currently proposed HS2 project.

- The coaches could be driverless on the motorway (but a conductor on board for safety) and high speed and capacity achieved through the computer control of traffic.

This proposal would also have the big advantage that coaches could easily join and exit this motorway at regular intervals (like current motorways) thus making this new transport system available to far more people close to and along the route and reducing the inevitable traffic around the terminals.

Just as for trains, the coaches could be driven by electric motors with power provided by overhead lines. But the coaches could also be fitted with sufficient battery power to be able to join and exit the coachway to stations along the route.

JPM said...

Re the general timbre of Raedwald's post, I say just get women to run everything.

Sure, there'd be some untoward outcomes, but on balance things would probably be run more effectively.

I mean, come on, when you try to do business over the 'phone, aren't you always relieved when the voice turns out to be female?

Re HS2, I never did see the point of it, especially when the Chinese have built a fifty-five kilometre road bridge over the sea for a tenth of the cost.

JPM said...

PS, although HS2 went along the grain of Europe's - not just the European Union's - integrated transport plan, there was never any compulsion for member states to implement any part of it.

So it is not "the EU's white elephant".

Billy Marlene said...

A little OT but, last Friday I had the joy of travelling from Needham Market to Kings Lynn. The best bit (free parking) was over fairly quickly.

I got to Ely and only had to wait, in the rain, 58 minutes for the Kings Lynn train.

I was impressed by the ‘connectivity’ of Ely. The board showed trains to Kings Cross, Thetford, Norwich, Melton Mowbray, Leicester and even Birmingham.

Then, amazingly, I noticed ‘Liverpool’ on the board. Who on earth in Ely wants to go to Liverpool (or vice versa)? The Liverpool train grunted and jerked towards the opposite platform. Two of the oldest, dirtiest carriages I have ever seen.

I said to station employee - a smart maroon uniformed young man - ‘Jesus! How long does that thing take to get to Liverpool?’

‘A long time’ he drily replies, barely able to stop the sides of his mouth displaying the dark humour of reality.

The train creaked off on its passage Westwards. The confused expressions on the faces of the passengers barely visible through caked windows.

I wonder if they are there yet.

Anonymous said...

Some part of the rising cost is the amount of tunnelling that is having to be done. HS tunnels need to be bigger bore and now have to have lighting, refuges and escape routes. Once built they will cost a lot to maintain and they hit the energy efficiency of the trains hard.

I agree with John Brown, trams are vanity projects. In the UK they have to be run along existing streets over the top of existing services which have to be moved if the tram service is to run without interruptions.

Tax all travel heavily! Local jobs for local people! (Just joking but that was the norm in the 1950s).

No, I am not relieved when a female answers the phone and I am terrified that so many of them are now in politics and part-time in medicine and wearing out my 'off-switch' finger with their screeching on radio and TV. To think that once they were a likeable sex.

Dave_G said...

HS2 - like many .gov inspired expenditure projects - is only QE by the back door (albeit with - hopefully - a useful product at the end of it) given that the money is invariably borrowed on the public account.

£100bn+ ???? Who are they kidding? Name ONE .gov project that has come in on time, on budget and profitably (assuming it was started thus)?

But I'm constantly surprised (disgusted) at how so many contracts have clauses that allow them to add additional costs willy-nilly (seemingly). What happened to 'cast-iron' guarantees and 'you under-quoted, you stump up the extra'? I'm reminded of the current Scottish Ferguson Shipbuilders debacle that is ongoing - Ferries that went from £40m to £100m+ (each) - THREE YEARS LATE - that are now being cut apart because they were designed incorrectly and, you might have guessed, have now passed into public ownership due to the shipyard folding under the costs. Who TF negotiated THOSE contracts?

Public projects should be controlled by the PUBLIC. There must be people who have knowledge of these types of project that can sit on a committee to yay/nay the IDIOCY of some decisions???

Trams?? Why rails? Rubber wheels and Catenary lines (or battery/LPG) and painted no-go zones for traffic (yellow boxes seem to be able to generate income - councils should be keen to use them) costs a fraction - see how Edinburgh managed to f*ck up their costs etc.

None of this is rocket science. What it is is THEFT of the public purse by people COMPLICIT in the process.

Mark said...

Must say your trolling is getting a bit more imaginative.

See what you can do without "regulatory compliance" with toytown Austria-Hungary and Chinese accounting.

Peter Barrett said...

I posted this elsewhere and make no apology for reposting:
£20b when first proposed in 2010. Then £50b plus. Now well over £100b. If/when they start laying track it will suddenly rise to £150b and, surprise, surprise, when it's finished it will have cost well over £200b.

There are a great many things this country can do very well and events in the near future will see that ability come to fruition. Correctly costing large engineering infrastructure projects is not one of them.

Billy Marlene said...

As a footnote to my Ely to Liverpool comment; i have just checked prices for a day return next Tuesday. £168.40.

jim said...

Well, if you don't know where you are going building one railway line is as good as building another. Therein lies the UK's problem, it has no idea where it is going. So we chop and change, build and cancel, commit and then delay delay delay. Don't even mention Heathrow.

When it comes to infrastructure the UK government is always an unreliable customer, always chopping and changing. The suppliers know this and have played the game many times before and therefore screw the taxpayer for every penny. Nailing one's colours to the mast and nailing a minister's scalp as well sends the right message. Goes back to the days of Samuel Pepys and beyond.

Span Ows said...

wg, tin foil needed, that is exactly what the routes are for. See the Hunger Games films for design.

Billy, maybe Ely is a nest of plastic Liverpool footy fans.

DeeDee99 said...

@ Dave_g

"ONE .gov project that has come in on time, on budget and profitably (assuming it was started thus)?"

The A3 Hindhead Tunnel.

Elby the Beserk said...

Cough. And the South West where any sense of a useful transport infrastructure is entirely conceptual. Rail service execrable. Buses worse. Roads? Well the main trunk road from the Home Counties to the South West is single lane more than half of the way. Turning it into a car park during the summer. And no, Stonehenge is not the reason for this - it's a small stretch in a long road.

I think because we are reliably Tory down here, Labour when in power ignore us, and the Tories know we;ll vote for them even if they then pretend we don't exist.