Escalating Petrol Prices Strengthen Station Case

The rapid rise in fuel prices over the last few years considerably strengthens the financial case for the opening of new railway stations, according to research by Carno Station Action Group. The business cases for Carno and Bow Street stations recently completed by Capita Symonds for TraCC are founded on Department of Transport advice that the real price of petrol – ie the retail price corrected for inflation – rises at only 0.2% a year, whereas in fact it has gone up at an average of 3% a year over the last nine years.

CSAG chairman Tony Burton said: “The future price of petrol obviously has a significant effect on the fuel cost savings enjoyed by drivers who transfer to the train. Based on the £1.30/litre price of petrol in 2011 and a conservative 2% annual rise of petrol prices into the future, we calculate that the fuel savings gained by users of Carno and Bow Street stations over their notional 60 year lives would be at least half as much again compared with those estimated in the Capita Symonds report. In the case of Carno, this alone would raise the station financial benefit by one fifth.”

On the cost side, Carno Station Action Group point to the use of unrealistically high station operating costs as detracting from the station business cases. A figure of £35,000 per year has been used for each station – enough to employ a full-time stationmaster at each, when the stations are intended to be unstaffed! By comparison, the business case for the proposed Energlyn station near Caerphilly, which is to have two platforms, quotes an operating cost of only £23,500 per year. No evidence has been provided to support the £35,000 per year station operating cost figure and CSAG believe that the cost should be half this at most, in view of the small size and rural situation of each station.

The value for money of transport projects is measured by the ratio of the benefits to the costs – the Benefit Cost Ratio. If proper allowance were made for rising petrol prices and a realistic station operating cost of £17,500 per annum adopted, the Benefit Cost Ratio for Carno station would rise from 1.15 to 1.60. Tony Burton commented “These figures speak for themselves. We look to TraCC and our elected Assembly Members to set out the case to the Minister, Carl Sergeant, as he prepares his revised National Transport Plan. The inclusion of Carno and Bow Street stations in the Plan would clearly demonstrate the Welsh Government’s commitment to sustainable transport.”