Why are railways so expensive these days?

[EliseNick]

I have a question that's been bugging me for a while, regarding the cost of infrastructure. (I'm posting it here rathe than NP&E in the hope of more insightful answers, also I'm not allowed...)

I was thinking about the Settle-Carlise line recently. Everyone knows that it was a huge engineering challenge to build, running across difficult terrain with numerous viaducts and tunnels. It opened in 1875 at a cost of 3.6 million pounds - the equivalent of £360 million today according to Wikipedia. I checked the inflation figures - that seems about right.

So why does a railway today, built with all the advantages of CAD, TBMs, and modern manufacturing methods cost more than one hundred times as much? It can't all be rescuing Great Crested Newts, paying a few consultants and running a Twitter account. If it was twice as expensive, or even ten times as expensive, I could kind of understand it. But over one hundred times? Alternatively, the Werrington dive-under cost £200 million - for about five hundred yards of grade separation. What gives? Are the conventional measures of inflation total bks for some reason?

This is not a question about whether the current investment is worth it - in my opinion we should be spending far more, and much more consistently, on national infrastructure. I'm just wondering what the hell changed between 1875 and 2022… (Apart from almost everything I guess.)

[Simpo Two]

Salaries, H&S legislation and productivity per person would be my first guesses. And private contractors rooking the Government. Oh yes, and civil servants. And delays caused by 'activists' popping up at any excuse.

[Greenmantle]

and then on the flip side if you plan your journey you can pick up tickets for peanuts.
I can do Kings Cross to Edinburgh Waverley for £50 each way (1 adult 2 kids) at Christmas.

[Eric Mc]

And no government subsidies - which are common in most European countries.

[EliseNick]

Greenmantle said:

and then on the flip side if you plan your journey you can pick up tickets for peanuts.
I can do Kings Cross to Edinburgh Waverley for £50 each way (1 adult 2 kids) at Christmas.

Eric Mc said:

And no government subsidies - which are common in most European countries.

My question was more about the cost of building infrastructure than the price of an off-peak return to Skegness.

[Glosphil]

Greenmantle said:

and then on the flip side if you plan your journey you can pick up tickets for peanuts.
I can do Kings Cross to Edinburgh Waverley for £50 each way (1 adult 2 kids) at Christmas.

You have neatly highlighted one thing I hated about UK railways - the complicated fare structure. The same rail journey has multiple fares depending if booked ahead, time of day, if direct or in stages, etc.

We took a train from Kuala Lumpur to Singapore & fare was the same no matter how booked, when booked or when we travelled.

A friend in Shrewsbury invited us, on a Thursday to visit for the coming weekend. Travalling direct by train was 4 times the cost of booking a month ahead with a split journey.

We drove.

Edited by Glosphil on Tuesday 27th September 10:42

[Greenmantle]

EliseNick said:

Greenmantle said:

and then on the flip side if you plan your journey you can pick up tickets for peanuts.
I can do Kings Cross to Edinburgh Waverley for £50 each way (1 adult 2 kids) at Christmas.

Eric Mc said:

And no government subsidies - which are common in most European countries.

My question was more about the cost of building infrastructure than the price of an off-peak return to Skegness.

and I was pointing out that for the billions invested the rate of return on that investment wasnt making financial sense.

[Collectingbrass]

EliseNick said:

I have a question that's been bugging me for a while, regarding the cost of infrastructure. (I'm posting it here rathe than NP&E in the hope of more insightful answers, also I'm not allowed...)

I was thinking about the Settle-Carlise line recently. Everyone knows that it was a huge engineering challenge to build, running across difficult terrain with numerous viaducts and tunnels. It opened in 1875 at a cost of 3.6 million pounds - the equivalent of £360 million today according to Wikipedia. I checked the inflation figures - that seems about right.

So why does a railway today, built with all the advantages of CAD, TBMs, and modern manufacturing methods cost more than one hundred times as much? It can't all be rescuing Great Crested Newts, paying a few consultants and running a Twitter account. If it was twice as expensive, or even ten times as expensive, I could kind of understand it. But over one hundred times? Alternatively, the Werrington dive-under cost £200 million - for about five hundred yards of grade separation. What gives? Are the conventional measures of inflation total bks for some reason?

This is not a question about whether the current investment is worth it - in my opinion we should be spending far more, and much more consistently, on national infrastructure. I'm just wondering what the hell changed between 1875 and 2022… (Apart from almost everything I guess.)

Land was much much cheaper then, there was a huge pool of relatively cheap labour to draw on and the technology used in the operational railway was incredibly basic. In terms of what has changed, it really is in the operational technology. As one example, fire detection and alarm systems in a station relied on the Mk1 nose, a Mk1 bell and a Mk1 bucket of sand. Now we have systems that can detect fire before it's even warm, "double knock" alarm systems that given a 15 minute prewarn to enable false alarms to be investigated and a whole load of intelligent suppression systems. This all adds cost.

The other thing that has changed is that new rail construction is far more sympathetic to the landscape and environmental issues, and a far more respectful approach taken to protecting the lives of the workforce (cf Dubai football stadium...). I'm sure if George Hudson or John Crossley were in charge of HS2 it would be much cheaper!

[alangla]

EliseNick said:

I have a question that's been bugging me for a while, regarding the cost of infrastructure. (I'm posting it here rathe than NP&E in the hope of more insightful answers, also I'm not allowed...)

I was thinking about the Settle-Carlise line recently. Everyone knows that it was a huge engineering challenge to build, running across difficult terrain with numerous viaducts and tunnels. It opened in 1875 at a cost of 3.6 million pounds - the equivalent of £360 million today according to Wikipedia. I checked the inflation figures - that seems about right.

So why does a railway today, built with all the advantages of CAD, TBMs, and modern manufacturing methods cost more than one hundred times as much? It can't all be rescuing Great Crested Newts, paying a few consultants and running a Twitter account. If it was twice as expensive, or even ten times as expensive, I could kind of understand it. But over one hundred times? Alternatively, the Werrington dive-under cost £200 million - for about five hundred yards of grade separation. What gives? Are the conventional measures of inflation total bks for some reason?

This is not a question about whether the current investment is worth it - in my opinion we should be spending far more, and much more consistently, on national infrastructure. I'm just wondering what the hell changed between 1875 and 2022… (Apart from almost everything I guess.)

Health & Safety as well. Can't find figures for the total number of fatalities on the S&C, but a smallpox outbreak in one of the camp claimed at least 80 lives & 100+ died building the Ribblehead Viaduct.

By comparison, 1 person died in an accident & 3 of suspected heart attacks while building Crossrail.

[2xChevrons]

Just to add my voice to what has already been said:

Costs were drastically lower. Labour especially - to the extent that it was virtually not a significant factor in the cost of construction or even running the railways as a business in the 19th/early 20th century. The wage rates were a fraction of what they would be today, even adjusted for inflation. There was no National Insurance, no sickness cover, no pension, no paid holiday. Navvies (who did the majority of the actual construction labour) were not even unionised and most of them were itinerant labourers paid on piecework or day rates rather than employees. And the only equipment they had was a pick, a shovel, a mattock and a wheelbarrow. The Settle & Carlisle was one of the last major railways to be built without mechanical aids - think how much equipment and technology is used in the construction of a railway today (such as the Werrington dive-under as mentioned). Added to the low cost of labour (and in many ways a corollary of that low cost) was the near-complete absence of health and safety in a recognisable modern form which also reduced the final bill.

Also little to no quality assurance, auditing, government oversight and so on. All of which adds to the 'backroom staff' of any modern civil engineering project. No environmental considerations, no campaigners insisting on tunnels or cuttings to hide the railway from the scenery (that only applied if you were a rich landowner with a seat on the board and/or representation in parliament), no compulsion to provide alternative wildlife habitats, hedgehog tunnels, re-wilding space, soakaways and so on. And the 'cost per mile' also factors in all the planning and politics that happens before a single JCB bucket hits the soil. The S&C had a difficult birth (the Midland fought like mad to get permission to build it, then immediately fought almost as hard to try and get out of having to build it...) but was still 10 years from initial survey to complete opening. Compare that to how long HS1, HS2, the reopened Border Rail line, East-West Rail etc. take in terms of project analysis, stakeholder consultation, planning, reviews, more consultations, committee hearings, tender processes and so on.

And the standard of construction wasn't as high as it would be if the same route was built today. The S&C was built (relatively) on the cheap - the actual formation and the engineering needed to maintain a vaguely practical ruling gradient was very well extensive and very costly, but the railbed and the associated structures were extremely miserly. The Ribblehead viaduct was built out of less-than-ideal materials and to less-than-ideal standards (which is why it has needed such extensive restoration/stabilisation over the past 40 years and why it still only has a single track across it) and the underbridges were all built to low weight limits (and had to be rebuilt by the LMS in the 1930s). The weight of the rails themselves was low even by late-Victorian standards (a classic Midland economy and one factor in why the MR kept building lightweight, low-power locomotives of Victorian design way into the 20th century) and also had to be upgraded several times during the 20th century. All these things would be done to much higher standards if the route was built today.

Edited by 2xChevrons on Tuesday 27th September 12:58

[Largechris]

Can't dispute the technical answers given above, I've watched closely various bits of HS2 being built and the scale and quantity of equipment being used to for example make a cut and cover tunnel at Banbury is staggering - biblical. Looks like they're drilling into several football fields worth of rock.

But OP touched on a good point about "is the inflation measure accurate" and I suspect it's not, or not representative at least.

Adjusted GDP per capita has increased 6-7 times since 1875, so maybe the adjusted 1875 Settle Carlisle cost might be more like 1.5 billion today. I'm spitballing a little on that.

[Simpo Two]

2xChevrons said:

Costs were drastically lower. Labour especially - to the extent that it was virtually not a significant factor in the cost of construction or even running the railways as a business in the 19th/early 20th century. The wage rates were a fraction of what they would be today, even adjusted for inflation. There was no National Insurance, no sickness cover, no pension, no paid holiday. Navvies (who did the majority of the actual construction labour) were not even unionised and most of them were itinerant labourers paid on piecework or day rates rather than employees.

Yes, and all very logical. People needed work, and the only alternative was the workhouse, there being no welfare state to rely on. No work = no money = no food. IIRC navvies earned quite well by the standards of the day - and they didn't need money for a new car, a holiday in Florida, the latest mobile phone or all the other consumables and gadgets we fill our lives with now and that all costs money.

2xChevrons said:

Also little to no quality assurance, auditing, government oversight and so on.

Looking at what was achieved in the 18th an 19th centuries it is quite remarkable what can be done with little to no quality assurance, auditing or government oversight! If we had the current panoply of 'stuff' in those times, I doubt the industrial revolution would have happened, at least not here. We'd still be arguing over the route for the Stockton to Darlington...!

[2xChevrons]

Simpo Two said:

Looking at what was achieved in the 18th an 19th centuries it is quite remarkable what can be done with little to no quality assurance, auditing or government oversight! If we had the current panoply of 'stuff' in those times, I doubt the industrial revolution would have happened, at least not here. We'd still be arguing over the route for the Stockton to Darlington...!

The history of the British railway system shows that what was usually done was a load of loss-making, over-ambitious or downright fraudulent schemes which, if they even got built, tended to collapse within a few years and be bought up by larger companies for pennies on the pound to create huge regional monopolies which wasted £millions on unnecessary competition, maintaining a ludicrously over-dense network and trying to drive their competitors to bankruptcy while failing to invest in their own futures.

A decent auditing process (or strategic planning at a government level as was common for railways in Europe in the 19th century) would have made sure that the S&C (and the other great late-19th century boondoggles) was never built in the first place.

[Krikkit]

Don't forget that route planning was far less complex as well - the population centres were far smaller, and the suburbs were non-existent for the most part. When you went over a local land-owner's land they usually had a significant amount and were ready and willing to sell it off to the railways for a profit.

Now it's much more complicated, there's a bunch of compulsory purchasing to be done, much denser towns to avoid everywhere, and people trying to make hilarious profits instead of selling to the housing builders.

[OutInTheShed]

Largechris said:

Can't dispute the technical answers given above, I've watched closely various bits of HS2 being built and the scale and quantity of equipment being used to for example make a cut and cover tunnel at Banbury is staggering - biblical. Looks like they're drilling into several football fields worth of rock.

But OP touched on a good point about "is the inflation measure accurate" and I suspect it's not, or not representative at least.

Adjusted GDP per capita has increased 6-7 times since 1875, so maybe the adjusted 1875 Settle Carlisle cost might be more like 1.5 billion today. I'm spitballing a little on that.

I googled for wages in 1870 and got US $1.40 per week. Call it £1 a week, compared to min wage £9.00 x 40 or whatever today, £360, so maybe a factor of about 360 if we did it the old way.
Actually wage costs are maybe double that, with ERNI, holiday pay, sick pay etc.

And you might have to pay more than min wage to get people capable of shovelling all day?

So cost inflation of 1000x might be the right arena?

[Largechris]

OutInTheShed said:

Largechris said:

Can't dispute the technical answers given above, I've watched closely various bits of HS2 being built and the scale and quantity of equipment being used to for example make a cut and cover tunnel at Banbury is staggering - biblical. Looks like they're drilling into several football fields worth of rock.

But OP touched on a good point about "is the inflation measure accurate" and I suspect it's not, or not representative at least.

Adjusted GDP per capita has increased 6-7 times since 1875, so maybe the adjusted 1875 Settle Carlisle cost might be more like 1.5 billion today. I'm spitballing a little on that.

I googled for wages in 1870 and got US $1.40 per week. Call it £1 a week, compared to min wage £9.00 x 40 or whatever today, £360, so maybe a factor of about 360 if we did it the old way.
Actually wage costs are maybe double that, with ERNI, holiday pay, sick pay etc.

And you might have to pay more than min wage to get people capable of shovelling all day?

So cost inflation of 1000x might be the right arena?

Yes - "representative inflation" I think is closer to 1000 fold rather than the 100 fold in the OP.

(I've made up the term "representative inflation")

[Simpo Two]

2xChevrons said:

The history of the British railway system shows that what was usually done was a load of loss-making, over-ambitious or downright fraudulent schemes which, if they even got built, tended to collapse within a few years and be bought up by larger companies for pennies on the pound to create huge regional monopolies which wasted £millions on unnecessary competition, maintaining a ludicrously over-dense network and trying to drive their competitors to bankruptcy while failing to invest in their own futures.

I mean the IR as a whole. If your answer to the mistakes in those days was to put the Government in charge, well, I'm not sure it would have turned out much better. Government was much smaller then; only recently do we turn to it for everything and blame it for everything; only now does it obsess us. I think governments are generally as bad at running things as corporations - one has little accountability, the other needs to make profit.

[2xChevrons]

OutInTheShed said:

And you might have to pay more than min wage to get people capable of shovelling all day?

Navvies were relatively well-paid in terms of manual labourers, mostly because it took a lifetime of doing that work to have the physical strength and endurance needed to do it. A consistent thing is that when a railway was being built through an area all the landowners complain that their farmworkers are chosing to get jobs on the railway for better wages, then the railway contractor complains that all the local workers are leaving because they can't hack the work, or the contractor is dismissing them because they can't work at the rate needed. Even miners and quarry workers couldn't shift dirt at the rate and endurance of a navvy.

When the supply of navvies became short in the 1880s (due to the generation that built the railways during the boom being too old, a shallower pool of rural workers being driven off the land by enclosure/industrialisation and those who would otherwise have turned to navvy-ing in Britain preferring to go abroad to work on projects like the Canadian Pacific) is when you see the introduction of steam-powered excavators, narrow-gauge railways on the construction sites and so on.

Simpo Two said:

I mean the IR as a whole. If your answer to the mistakes in those days was to put the Government in charge, well, I'm not sure it would have turned out much better. Government was much smaller then; only recently do we turn to it for everything and blame it for everything; only now does it obsess us. I think governments are generally as bad at running things as corporations - one has little accountability, the other needs to make profit.

I know what you're getting at with regards to the dynamism and rapid progress of the era, nearly all with private capital. But it was done at a massive human and social cost, wasted a significant portion of GDP in badly-conceived and hopeless schemes and created an economy that swung between booms and busts of a scale that would make us wince these days. And while it was all 'small government and private enterprise' at home, never forget that the raw materials and much of the capital came from extremely 'big government' interventions in the rest of the world.

Edited by 2xChevrons on Tuesday 27th September 15:05

[matchmaker]

2xChevrons said:

Navvies were relatively well-paid in terms of manual labourers, mostly because it took a lifetime of doing that work to have the physical strength and endurance needed to do it. A consistent thing is that when a railway was being built through an area all the landowners complain that their farmworkers are chosing to get jobs on the railway for better wages, then the railway contractor complains that all the local workers are leaving because they can't hack the work, or the contractor is dismissing them because they can't work at the rate needed. Even miners and quarry workers couldn't shift dirt at the rate and endurance of a navvy.

When the supply of navvies became short in the 1880s (due to the generation that built the railways during the boom being too old, a shallower pool of rural workers being driven off the land by enclosure/industrialisation and those who would otherwise have turned to navvy-ing in Britain preferring to go abroad to work on projects like the Canadian Pacific) is when you see the introduction of steam-powered excavators, narrow-gauge railways on the construction sites and so on.

I think I'm right in saying that the last large civil engineering project in the UK built almost entirely using manual labour was the Blackwater Reservoir on Rannoch Moor, for the Kinlochleven aluminium smelter.

[monkfish1]

Eric Mc said:

And no government subsidies - which are common in most European countries.

Incorrect. Subsidy, even pre covid was running at 5 times the level of BR in its final years.