Life Cycle Costing

1. Life Cycle Costing

2. Learning outcomes • To identify the Life Cycle Cost considerations of mega projects (High speed rail – HS2)

3. HS2 objectives • To connect the city centres of: London, Birmingham, Leeds and Manchester • To enhance the economic development

4. Project details • The line is in a "Y" configuration to be built in two phases • Construction starts – 2017 • Expected completion – 2033 (Phase 1 – 2027) • Developer – HS2 Ltd (established by the UK Govt) • Capacity - conveying up to 26,000 per hour @ speeds of up to 400 km/hr (250 mph) • Length – 540Km (Phase 1 – 190Km) • Construction cost – £32.7b (2011) however Institute of Economic Affaires noted the cost will be increased up to £80b

5. Route map (HS2 / Y- network)

6. Life cycle cost components • Capital construction cost – cost of land purchases, design, materials, construction and allowance for risk • Rolling stock capital costs – the purchase costs of rolling stock (trains) • Operating costs – the operation and maintenance of the railway infrastructure, its trains including train crew and station staff

7. Infrastructure capital cost • Phase 1 (£16.2b) & Full Y network (£32.7b) – including contingencies • Rates were based on Spon’s Civil Engineering and Highway Works Price Book • Tunnelling / bridge costs were based on Infrastructure UK cost study work

8. 1. Capital cost components • 250 cost elements were identified • Cost reflects on the route section • Permanent way – rail, sleepers, ballast, walkway, track drainage and high security fencing; • Changes and crossings – based on number of crossings and associated line-speed; • Overhead Line Equipment – overhead line equipment, support structures and power supply; • Train control systems – includes all signalling and communication requirements and control centre; • Stations– civil engineering works, station buildings, station facilities, track, switches, • Earthworks– site clearance, earthworks, soiling, seeding and small structures for the permanent way only • Retaining walls – associated earthworks, concrete, formwork, reinforcement; • Structures– associated earthworks, concrete, formwork, reinforcement, pre-cast units, structural steelwork and finishing works; • Tunnels– excavation, tunnel lining, cross passages (for twin-bore tunnels), shafts, plant and associated control systems. • Highways– include site clearance, fencing, vehicular barriers, drainage, earthworks, pavement, kerbs, footways, signs, lighting and small structures/accommodation bridges;

9. 1.1 Capital cost • Land cost (Phase 1) - includes property, disturbance and resale values – £966m • Other associated cost – varies with the construction cost

10. 1.2 Other capital costs • Environmental mitigation (urban areas or areas of known environmental significance 5% of base construction cost, in other areas 3%) • Surveys (ground and topography) - allowance of £150,000 per km • Rail possession / isolation / safety management - 2% of base construction cost for route sections affecting existing railway

11. Cost estimate (Full network)

12. Two types of trains will be used to operate HS2 services. • Captive size sets (Euro size) • Classic-compatible sets (British mainline) 1.3 Rolling stock (train) capital costs

13. 2. Renewals Recognising that the HS2 business case is evaluated over a 60 year period

14. 3. Operations & maintenance • The calculations were based on HS1 costs. At 2011 prices, an annual figure of £191,000 per km (£103.14m). • Captive set maintenance - £2.97 per kilometre travelled for a 200m captive train • Classic compatible set maintenance - £3.71 per kilometre travelled for a 200m set. £4.82 per kilometre travelled for a 260m • Traction power (electricity grid for the supply of electrified rail networks) cost;

15. Further information

16. Questions?