Boris Watch

Dave Hill’s been keeping an eye on the escalating cost of the Borismaster vanity bus project including this latest robot-post (he’s in Ireland) which has attracted a certain amount of well informed comment about amortisation and discount rates.

Meanwhile, I’ve been catching up on those pesky boring TfL PDFs that occasionally contain nuggets of interest and have found something that potentially makes £3.3m look rather small beer: TfL Finance Commitee reports, in particular the Project Monitoring/Project Approval reports.  Now, these contain two broad types of information, the first being projects recently approved for spending and secondly tables of projects already approved, which means we can easily work out cost escalations and monitor where projects are in their lifecycle via some handily defined ‘gates’, or milestones.

These Finance Committee documents take our interest today:

• Project Monitoring/Approvals – 27th January 2009
• Project Monitoring/Approvals – 10th March 2009
• Project Monitoring/Approvals – 2nd June 2009
• Project Monitoring/Approvals – 15th July 2009
• Project Monitoring/Approvals – 9th October 2009

The report of 27th January is the first for this year, and it fairly generously allows spends up to £50m to be made under delegated powers by the Commissioner while the MD Finance gets to approve spends up to £25m.  The full Finance Committee is required for splashing out >£50m while the TfL Board deals with the really big spends.  We therefore note the following newly approved projects spends under delegated powers:

• Stratford Station Upgrade (£48.409m)
• King’s Cross Station Modernisation (£35.230m)
• Heathrow Terminals 1,2,3 Station Enhancements (£19.435m)
• DLR 3 Car East Route (£18.2m)
• Hydrogen Bus Project (£18.8m, project cost escalation due to exchange rate and reduced from 10 buses to
• Dial-a-Ride Vehicle Purchases (£7.7m)

The complete (and very long) list of projects does not have the New Bus For London in it.

On 15th March we only have a list of projects newly approved:

• Refurbishment of 14 Overground stations (£24.8m)
• Early development of new Bakerloo trains (£2.97m)
• Olympic Walking and Cycling (£0.75m)
• Kingsbury Step Free Access (£14.043m)
• East London Line Phase 2b (£5.5m)
• London Underground Track Programme (£18m)

This shorter document doesn’t have a full project list and again has no mention of the New Bus For London project.

On 2nd June 2009 we have a longer report detailing the following raft of new approvals:

• Countdown 2 (£39.9m)
• Accommodation Strategy (£32.6m)
• BCV/SSL Stations Asset Stabilisation 2009/10 (£48.3m)
• BCV/SSL Civils Programme 2009/10 (£43.4m)
• Cooling The Tube (£33m / £48m)
• Osterley Step Free Access (£12.7m, since cancelled)
• Ladbroke Grove Step Free Access and Station Refurbishment (£18.8m, since cancelled)
• Hainault Station Step Free Access (£15.3m)
• Aldgate Station Refurbishment (£11.3m)
• Railway Timetabling System (£6.9m)
• A406 Henlys Corner Junction Improvements (£1.6m/£8m)
• Co-location of control rooms at Palestra (£15.2m)
• Cycle Highways 2 pilot routes (£3.3m/£22.4m)

We then have a list of all projects with current and project spending approval.  What’s this, the New Bus for London has suddenly appeared.  What’s more it’s appeared in the table (page 11) headed ‘Projects To Be Approved By Finance Committee greater than £50m‘, which means spending on it is considered important enough to go to the full Finance Committee rather than be approved solely by Peter Hendy or lower TfL management.  This is remarkable considering the actual spend on NBfL is only £1.1m for the early stages A,B,C, covering up to the pre-tender stage in July 09, and a further £2m taking it up to £3.1m for gate D (contract award) in November 2009.  That fits in with what Kulveer and Boris have been saying, but is nowhere near the £50m that it would normally need to cost to get into the big boys project approval list.  A clue might be in the ‘Estimated Final Cost’ column, which is is ‘TBC’ for this project, while there’s a firm final cost estimated for the other 12 projects ranging from £54.4m for ‘Sub-surface lines 750V conversion’ up to £638m for ‘Victoria Station Upgrade’.  As an aside, included in there is the estimate of £142.6m for the full ten Cycle Superhighways.  That’s rather a lot of money.

So, as of June 2009, someone in TfL considers the New Bus project might have a £50m+ price tag on it, all told.

Moving on to 15th July 2009 the following new projects appear:

• BCV/SSL Lifts and Escalator Programme 2009/10 (£29.6m)
• Walthamstow Central Subway Interchange (£11.8m)

Moving down, the Cycle Superhighways are now at £140.450m estimated total spend, and the New Bus For London is showing an Estimated Final Cost for the first time, at £3.2m for Gate C and £3.2m for Gate D.  I’ve no idea whether this is the same £3.2m, but I’d assume it was, given that Dave’s story indicates that the cost crept up from £3m to £3.3m over the year.

We thus come to the most recent meeting, 9th October, where the following new projects emerge:

• Tottenham Hale Gyratory removal (£11.84m/£37m)
• Cycle Superhighway pilot routes (£22.99m) – this is the money for implementation, following on from the earlier cash for design
• Infrastructure Development Programme (£5.6m/£22.6m)
• Woolwich Town Centre (£5.9m)
• New Bus For London D&D (£0.5m/£3.3m)
• Transport Co-ordination Centre [Olympic transport planning, apparently] (£4.4m/£10.34m)
• Signal Modernisation Programme (£13.2m)
• 3G Bus Corridor Improvement Programme (£6.378m)
• Olympic Walking and Cycling Programme (£2.1m/£9.8m)
• Bank Northern Line Congestion and Step Free Access (£7.4m/£625m)

The projects over £50m table therefore currently shows NBfL costing £3.3m at Gate D (contract award) in November 2009.  What’s most interesting is the snippet marking the increase in funding by £495,000 that sheds a bit of light on why such a small project should fall into the big table:

Authority Request

Initial authority of £495k to complete the initial stages of design and development.  The authority was sought from MD Finance although within the delegated amount for MD Surface as the total potential commitment may exceed £5m depending upon procurement strategy.

Outputs and Schedule

The authority covers all activities up to award of the development contract planned for December 2009, these include:
• The design competition
• Project management costs
• Tendering of development contract

Approval

The project was granted authority of £0.5m with an expiry date of December 2009, before which the project will seek further authority for the contract award.

In other words, this really is just the preliminaries that Kulveer and Boris are talking about – depending on how they procure the fleet the eventual cost could exceed £5m (presumably the maximum David Brown, MD Surface, can approve, which is why it went to MD Finance (£5m-£25m).  Given where it sits in the full table, however, it could apparently cost in the £50m+ range, so the tidy-minded bean counters at TfL have put it there *expressly to ensure that spending decisions are taken by the Finance Committee of TfL*.

All of which means, firstly there’s an announcement of the contract award due in the next month or so and secondly they don’t know who will be paying for the buses yet, but what’s clear is that £3.3m is not the end of the cost to TfL of the New Bus for London.  It’ll be worth a regular look through the finance committee documents, not least this one which indicates large underspends at TfL in the current year.

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