Cycle Hire Costs Up Again?

Following on from the promise here, Helen and I have been perusing the most recent TfL Finance documentation.  Amongst the documents from the 24th November 2009 is a fascinating detailed account [PDF] of the TfL Investment Programme, which contains precisely one occurence of the word ‘Mayor’, against the Cycle Hire Scheme section.  So, let’s see what the famous avoider of detail has been getting involved with:

The Cycle Hire scheme will deliver 6,000 cycles in central London by May 2010.  400 docking stations will be introduced, which equates to nine docking stations per square kilometre.

All jolly good.

The contract award was made on 11 August, which has been delayed by six weeks as a result of clarification meetings with bidders. This has resulted in the website go live milestone to be delayed by two months to 21 May 2010 and the on-street implementation being delayed to
the end of June 2010

Well, nothing ever runs perfectly.  Not a problem.

Spend to end Q2 2009/10 £6.1m

Not unreasonable, this will be planning costs, tendering costs, planning applications etc.

Estimated Final Cost £91.6m

You what?  I’m sure that’s gone up a bit.  Here’s the Standard from the same day as the meeting, 24/11/09:

Fears for Boris’s £71m bike hire scheme as Paris taxpayers bail out Velib

or, from the same article:

Transport for London signed a £140million, six-year deal in August with Serco

Now I’m confused.  Let’s step back through the Project Monitoring – Project Approvals documentation to see how much it’s been budgetted at:

• 20/11/2009 – £62m
• 27/1/2009 – EFC £58m

Furthermore, TfL’s Investment Programme PDF from early last year also has the project costs as £58.9m, with the following snippet:

Benefit cost ratio (BCR)

0.9:1   (The rule of half has been applied to the benefits.)

Eh?  Seems a bit low.  What about the 2010 equivalent [PDF]?

Estimated cost £m: 92

For some reason there are no BCRs in the document this year.  Notwithstanding, if the project cost has gone up 60% in a year and the £92m figure is used the BCR drops to about 0.6:1.  To compare, here are estimated BCRs for other projects from the 2009 document:

• Tottenham Hale Gyratory:- 2.3:1 on a spend of £47.8m
• Hanger Lane bridge replacement:- 43.0:1 on a spend of £27.0m (yes, rather jaw-dropping, reason appears to be reduction of accidents)
• Olympic Games Cycling Network:- 14.5:1 on a spend of £7.7m
• LEZ :- 0.6:1 on a spend of £44.8m
• Reletting Congestion Charge contracts:- 1.6:1 on a spend of £104.5m
• East London Transit phase 1a:- 2.1:1 on a spend of £22.4m
• East London Transit phase 1b:- 3:1 on a spend of £20.6m
• Greenwich Waterfront Transit:- 1.3:1 on a spend of £46.m

Seems distinctly poor value for money there.  How about rail [PDF] projects, again from 2009?

• East London Line :- 2.54:1 on a spend of £988.9m
• North London Line infrastructure upgrade:- 1.7:1 on a spend of £240.1m
• LRC (Overground) station upgrades :- 1.7:1 on a spend of £40.9m
• Bank-Lewisham 3-car DLR upgrade:- 1.4:1 on a spend of £266.3m
• Custom House-Beckton 3-car DLR upgrade:- 2.9:1 on a spend of £18m
• Woolwich Arsenal DLR extension:- 1.7:1 on a spend of £207m

Yep.  To sum up: the estimated cost of the project has gone up 60% in a year and has a benefit/cost ratio estimated to be substantially below other projects currently in the pipeline.  Is this really the best use of £92m in the week bus fares go up 20%?