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Why are things so expensive?

Bald Rick

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It would be interesting to understand why that is the case. Snobbery around being a tradesman, as opposed to something more “middle class”, perhaps?

I think its partly parents, and partly that being a tradesperson is often, frankly, hard/dirty/both work!
 
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JonathanH

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It would be interesting to understand why that is the case. Snobbery around being a tradesman, as opposed to something more “middle class”, perhaps?

Over the course of a career people are generally going to be considerably better off learning a trade, than taking on a huge student loan to do a joke degree at an ex poly, for example.
In due course, as office jobs are offshored to cheaper countries, or robots do the relevant work, it seems likely that tradesman jobs may make a return.
 

ABB125

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I happen to know some consultants, who have had the (dis)pleasure of working with Network Rail (not as the client, rather as a stakeholder). I'm told there's so much paperwork, procedure and process that you can spend several weeks filling in forms that have no real relevance to the project, but have to be filled in anyway (because someone says so). And then it turns out that you didn't give sufficient notice that you were planning to fill in form 67.8a, subsection 43.2d (or whatever), so your submission is rejected. Etc etc.

Scale this up across an organisation the size of Network Rail, and it's easy to see why things cost lots...

(And that's before we get onto the topic of corporate/contract lawyers on £1000+/day making sure that in the event of something going wrong, everyone can blame everyone else (apart from the lawyers...))
 

Viper

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Perhaps we could save costs by closing some stations, they must be expensive to operate.
 

Ducatist4

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These are actual costs but are around 12 months old now so up them by 2-3%. Thats the price per square metre.

1709037251250.png

The cost for housing varies depending on how many are being built and so on but its around £2000 per sq m. (not including the cost of the land).
 

The exile

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Perhaps we could save costs by closing some stations, they must be expensive to operate.
I doubt there are many stations whose net operating costs throughout their entire existence would exceed the costs of building them new now!
 

northwichcat

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So this is a single platform station with access road and car park for 40 cars. No footbridge, minimal infrastructure.

The bolded bit is important. Councils can insist on funding for work beyond the site if there will be a traffic impact. It might mean new traffic lights, a new roundabout, an existing junction added to existing traffic light system etc. In the case of the latter it might be the traffic light system needs upgrading first. This won't necessairly be part of the railway's plan so may not be specifically mentioned.
 

Northerngirl

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There was a new 2000 student high school built near me ~5 years ago for about the same cost, with a big car park. While it's clearly not the same, I would have thought that there would be a similar amount of paperwork and committees, which still makes this small new station sound like a ripoff
 

eldomtom2

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That's a totally abstract statement though, which nobody could disagree with, the same as "crime needs to come down". There are unlimited wants and limited resources. All we can do is prioritise.
Well, do you have suggestions for cutting costs?
No it doesn't? Economies of scale being exploited well or not is a make or break condition in any number of markets. Construction is well recognised as one where they're relevant.
But where is your evidence that it's all down to economies of scale?
 

Class 170101

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Looking at it, that crossover will be the one used. Probably needs a complete renewal as it has no real use currently as it stands.
Perhaps I'm being dim but surely it would be cheaper to just run to Water Orton and then come back from there and thus build two platforms either side of the line.
 

The Planner

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Perhaps I'm being dim but surely it would be cheaper to just run to Water Orton and then come back from there and thus build two platforms either side of the line.
Doubt you could find the margin to turn a train around at Water Orton and its going to be a 35-40 minute round trip.
 

Starmill

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But where is your evidence that it's all down to economies of scale?
It's for you to present evidence if you want to argue for an undefined position of cutting costs. I won't be doing so :)

Well, do you have suggestions for cutting costs?
I'm entitled to point out that what you've added to the debate doesn't match your claims about it without having to also include my own suggestions. However I think it's absolutely clear that a bigger budget and more work would be one way to lower unit cost, as would spending more on training people to do the jobs which are difficult in various ways. None of this would be a quick fix though.

We can all note with regret that construction industry and railway engineering-related supply are rising in price faster than economy-wide inflation is running. But beyond that, nobody has articulated in this thread that costs even actually are "too high" to begin with, so I'd reject that even as a starting position for debate.
 
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GRALISTAIR

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Economies of scale being exploited well or not is a make or break condition in any number of markets. Construction is well recognised as one where they're relevant.
Absolutely correct. From mass production of the Model T onwards.
Construct 1 house - mobilise to site etc - now do 1 big estate of 100 houses. Cost per unit will come down - it really is that simple.

Apply this to railways. It has been argued ad nauseam an discussed and agreed by many professors, economists, politicians of all colours and civil servants and engineers etc that the stop-start electrification programme (and other examples) causes costs to rise. Economies of scale is a well proven and accepted concept.

Please can I have some of what eldomtom2 is smoking?
 

Starmill

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Absolutely correct. From mass production of the Model T onwards.
Construct 1 house - mobilise to site etc - now do 1 big estate of 100 houses. Cost per unit will come down - it really is that simple.

Apply this to railways. It has been argued ad nauseam an discussed and agreed by many professors, economists, politicians of all colours and civil servants and engineers etc that the stop-start electrification programme (and other examples) causes costs to rise. Economies of scale is a well proven and accepted concept.

Please can I have some of what eldomtom2 is smoking?
The violent stop-go-stop swing on electrification in England over the the past 20 years is a perfect example of sitting right in the worst place possible on the curve of that economy of scale.
 

Dr Hoo

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Absolutely correct. From mass production of the Model T onwards.
Construct 1 house - mobilise to site etc - now do 1 big estate of 100 houses. Cost per unit will come down - it really is that simple.

Apply this to railways. It has been argued ad nauseam an discussed and agreed by many professors, economists, politicians of all colours and civil servants and engineers etc that the stop-start electrification programme (and other examples) causes costs to rise. Economies of scale is a well proven and accepted concept.
Whilst this is demonstrably true for fundamentally identical items, such as Model T Fords or an estate of similar houses, the railway seems to suffer very badly with the fact that a network the length of breadth of GB, with a range from one up to six or more tracks, built to different standards, on earthworks that fall miserably short of modern geotechnical understanding, etc., etc., is the antithesis of 'mass production'. And that's before you consider being often hemmed in by unsympathetic neighbours, numerous heritage structure nearby, complex and lengthy 'planning approval' processes and so on.

Ironically HS2, which some of us might have hoped would provide a steady programme of work for around 15 years, largely removed from the 'old' railway, has demonstrated 'expensive' in Spades.
 

Ducatist4

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Economies of scale in houses:

Estate house £1460 to £1620 sq m
small/medium size development £1750 to £1950 sq m
One off £2050 to £2270 sq m

all for the same type of house.
 

ChiefPlanner

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Roger Ford of Modern Railways wrote as far back as 2002 on the cost explosion of rail projects , noteably on the West Coast main line which was then coming out as three times previous estimates - but then the Ledburn Junction example of 18 weekends all lines blocked (reality only 9 were really needed - and then the wrong junctions were installed so they had to come back and do it again - and many other examples came out , or non delivery and the failure of projects such as Manchester South etc etc) - yes the costs "came down" from £13 Billion estimate but at the price of scope reduction.
 

eldomtom2

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Seriously? !
What's objectionable about asking a claim to be backed up with proof?
It's for you to present evidence if you want to argue for an undefined position of cutting costs. I won't be doing so.
You are making a claim that cost differences are due to economies of scale. The onus is on someone making a claim to provide proof.
But beyond that, nobody has articulated in this thread that costs even actually are "too high" to begin with, so I'd reject that even as a starting position for debate.
Again I bring up the Transit Costs Project - I might take their conclusions with a grain of salt, but I don't see any reason to doubt their data on the costs of transit projects. And that data says that the Elizabeth Line was one of the most expensive by kilometre urban rail projects in the world, only beaten by some projects in the US and Hong Kong, and that HS2 is far and away the most expensive HSR project in their extensive database, and that furthermore it is expensive well out of proportion to e.g. the percentage it is tunneled or country GDP. Something is clearly wrong here - if the cancellations of HS2 Phase 2 due to its high cost didn't make that obvious enough.
 

btdrawer

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Whilst this is demonstrably true for fundamentally identical items, such as Model T Fords or an estate of similar houses, the railway seems to suffer very badly with the fact that a network the length of breadth of GB, with a range from one up to six or more tracks, built to different standards, on earthworks that fall miserably short of modern geotechnical understanding, etc., etc., is the antithesis of 'mass production'. And that's before you consider being often hemmed in by unsympathetic neighbours, numerous heritage structure nearby, complex and lengthy 'planning approval' processes and so on.

Ironically HS2, which some of us might have hoped would provide a steady programme of work for around 15 years, largely removed from the 'old' railway, has demonstrated 'expensive' in Spades.
Well, the fact that HS2 also proved so expensive despite being a greenfield railway is evidence that it isn't just a matter of the UK's Victorian railways being hard to upgrade; we can't build new railways cost-effectively either.

Well, the fact that HS2 also proved so expensive despite being a greenfield railway is evidence that it isn't just a matter of the UK's Victorian railways being hard to upgrade; we can't build new railways cost-effectively either.
Actually I think I misunderstood your point, apologies
 
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Broucek

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I happen to know some consultants, who have had the (dis)pleasure of working with Network Rail (not as the client, rather as a stakeholder). I'm told there's so much paperwork, procedure and process that you can spend several weeks filling in forms that have no real relevance to the project, but have to be filled in anyway (because someone says so). And then it turns out that you didn't give sufficient notice that you were planning to fill in form 67.8a, subsection 43.2d (or whatever), so your submission is rejected. Etc etc.

Scale this up across an organisation the size of Network Rail, and it's easy to see why things cost lots...

(And that's before we get onto the topic of corporate/contract lawyers on £1000+/day making sure that in the event of something going wrong, everyone can blame everyone else (apart from the lawyers...))
I work for an HR consultancy. We were preferred bidder for a contact with a railway-related organisation. We could not get their legal and procurement people to agree terms and conditions. The company I work for is EXTREMELY large and we work with 80-90% of the FTSE100 in one area or another so I'm pretty sure we weren't the problem....
 

Starmill

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You are making a claim that cost differences are due to economies of scale. The onus is on someone making a claim to provide proof.
Not the case. As you know. You asked why there's a sense of European countries achieving better costs, I said I think it's because of economies of scale and Labour costs. You don't have any evidence it's actually because of something to do with using consultants, or indeed anything else. My posts were a challenge to the claims that using a consultant engineer or other specialist is fundamentally bad value for money. Maybe the largest reasons actually are poor economies of scale and high labour costs, maybe there are other reasons more significant than those two (that so far you've not articulated). I don't need to defend the position beyond that. Apparently you do.

Something is clearly wrong here
Is it? Why? That data appears to be highly selective to me. I would say it also shows that the Elizabeth line was pretty good value for money.

This is even more meaningless. A lot of those comparators are from counties with tax policies, legal systems and stakeholder approaches wildly different to the UK, as well as their wage levels being very different and their capacity to exploit economies of scale.
that furthermore it is expensive well out of proportion
Normalising for GDP isn't very instructive in this regard, beyond pointing out that the UK's GDP per capita isn't doing well against peer countries with similar economies.
Obviously I am not an expert
At least we can all agree with this statement though.
 
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eldomtom2

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My posts were a challenge to the claims that using a consultant engineer or other specialist is fundamentally bad value for money.
I never said that.
Is it? Why? That data appears to be highly selective to me. I would say it also shows that the Elizabeth line was pretty good value for money.
Why do you think the data is "highly selective"? Why do you think it shows the Elizabeth line was good value for money?
This is even more meaningless. A lot of those comparators are from counties with tax policies, legal systems and stakeholder approaches wildly different to the UK, as well as their wage levels being very different and their capacity to exploit economies of scale.
Normalising for GDP isn't very instructive in this regard, beyond pointing out that the UK's GDP per capita isn't doing well against peer countries with similar economies.
Okay, so what you're saying is that any comparison between different countries is irrelevant? Did you actually look at the data and see just how massively an outlier the UK is?
And, of course, even disregarding international comparisons HS2 still got itself cancelled due to high costs.
 

Starmill

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I never said that.
You said the reverse, I challenged you on it as misguided and pointed out why. I think that counts. You may waste hours of your life splitting hairs if it makes you feel good but I won't be wasting my time doing so.
 

takno

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And, of course, even disregarding international comparisons HS2 still got itself cancelled due to high costs.
HS2 got cancelled because Sunak always hated it and thought he'd get a bit of a political hit out of cancelling it, and in doing so he messed up the construction industry in this country and caused billions of waste in all the planning and preparation that's been done. We do this sort of thing quite often, which is, um, one of the key reasons things are so expensive.
 

Starmill

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Okay, so what you're saying is that any comparison between different countries is irrelevant?
Not at all. To give one example, if you found some comparable data for British and French HSR unit costs with appropriate price years and an appropriate currency conversion you'd see the primary reason the French get slightly better unit rates, despite being very, very similar to the UK in economic and political terms, is because they've exploited economies of scale more effectively.

But, and I think this is really important given your approach to debate on this forum, I'm not going to do the work of setting that position out for you. First and foremost, it's not really that related to the subject of this thread which was about one station and set of associated changes, and secondly because you've approached the debate so incredibly discourteously. You asked for my opinion, and I've given you my opinion: the evidence has persuaded me that investment in skilled labour (structural and civil engineers, railway engineering specialists, and construction site labourers - all to do roles currently being paid well above average) and simply doing more building, in bigger capital budgets, would lower unit costs. This is what economists mean when they talk about economies of scale. If you don't like that I have that opinion, I really don't see how that changes anything for me.

If you wanted to dig into it a bit more you could have chosen to start your own thread (you're perfectly permitted to link to it from your posts in this one if it helps) about cost on HSR or Crossrail or anything else, posing some reasons for the claimed unit cost gap, and if you'd been a bit more polite about it, I imagine you'd have received more engagement. But you didn't do that.
 
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Nicholas Lewis

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There is a crossover in the Aldrige area already although its probably not signalled for passenger moves so would need a change to the interlocking and if its still the relay based system from Walsall PSB probably not modifiable so thats a few million just for a repalcement.

1709152453453.png
 

eldomtom2

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Not at all. To give one example, if you found some comparable data for British and French HSR unit costs with appropriate price years and an appropriate currency conversion you'd see the primary reason the French get slightly better unit rates, despite being very, very similar to the UK in economic and political terms, is because they've exploited economies of scale more effectively.
Well, again looking at the Transit Costs Project database, the most expensive French HSR project is Lyon-Turin, which comes in at just over half the cost per kilometre of HS2 despite being 70% in tunnels. This is not just "slightly better unit rates" caused by economies of scale.
First and foremost, it's not really that related to the subject of this thread which was about one station and set of associated changes,

If you wanted to dig into it a bit more you could have chosen to start your own thread (you're perfectly permitted to link to it from your posts in this one if it helps) about cost on HSR or Crossrail or anything else, posing some reasons for the claimed unit cost gap, and if you'd been a bit more polite about it, I imagine you'd have received more engagement. But you didn't do that.
I did not interpret this thread as being about one station only. I interpreted it as being about high costs in general, using one station as an example.
HS2 got cancelled because Sunak always hated it and thought he'd get a bit of a political hit out of cancelling it, and in doing so he messed up the construction industry in this country and caused billions of waste in all the planning and preparation that's been done. We do this sort of thing quite often, which is, um, one of the key reasons things are so expensive.
You don't think Sunak and the public's opinions on HS2 would be different if it was cheaper?
 

Starmill

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I did not interpret this thread as being about one station only. I interpreted it as being about high costs in general, using one station as an example.
I saw you interpreted it as a way to make yourself sound good, and not something to do with transport costs at all. What are you going to do about that?
 

The Planner

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There is a crossover in the Aldrige area already although its probably not signalled for passenger moves so would need a change to the interlocking and if its still the relay based system from Walsall PSB probably not modifiable so thats a few million just for a repalcement.

View attachment 153353
Walsall was resignalled and the PSB closed in 2013. All at WMSCC at Saltley.
 

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