In January 2017, the Department assessed the benefit–cost ratio of the project as 0.9:1, representing poor value for money. Costs to electrify had risen from £16 million in 2014 to £35 million in March 2017 (cash prices).
Electrifying the route was part of the Department’s franchise commitment for the line. The Department recognised that there could be financial implications from cancelling the project as it would need to subsidise the operator to cover any additional costs. The Department acknowledged that there could be costs associated with providing alternative rolling stock to ensure that through trains from Manchester Airport to the Lake District could continue to run.
Oxenholme to Windermere
4.7 The main passenger benefits of electrifying Oxenholme to Windermere were to provide a through train to the Lake District from Manchester Airport and to reduce journey times. When he cancelled the project, the Secretary of State said that from May 2018 there would be double the number of direct services from Manchester Airport and that there would be brand new trains with more seats, better on-board facilities including air-conditioning, toilets, free Wi-Fi and plug sockets, subject to business case. 22 Part Four Investigation into the Department for Transport’s decision to cancel three rail electrification projects
4.8 The current Northern franchise, which includes this route, started in April 2016 and the franchise infrastructure assumptions said the line would be electrified by the end of 2017. At the time the Department awarded the franchise, it recognised that Network Rail would not deliver electrification in time to meet the franchise commitment. It is not clear why this was the case. To ensure that direct services from Manchester Airport to the Lake District could continue to run, the franchise operator proposed to fit some of its electric trains with diesel engines. The train operator planned to introduce these from May 2018, although they are now likely to be introduced later this year.
4.9 These bi-mode trains would not, however, provide the passenger benefits promised in the franchise or the Secretary of State’s announcement in July 2017. In January 2018, the Department advised that the operator should be permitted to buy new or cascaded diesel trains for the route in order to meet standards set out in the franchise around quality of rolling stock. In the longer term, the Secretary of State has asked the train operator to explore the possibility of using alternative fuel trains such as hydrogen or battery trains, on the route by 2021.
