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Old 21st Oct 2017, 12:31
  #26 (permalink)  
Pegpilot
 
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You can draw interesting government procurement comparisons by looking at DfT's current Azuma High Speed Train project for the east and west coast lines as well as Great Western. Here too, a unique, custom built design has been specified by HMG involving a "bi-Mode" solution whereby electric trains are lugging around mostly idle, underpowered diesel engines for use beyond where the wires stop. It is virtually impossible to determine the initial acquisition cost as it's a leasing deal, where the rental charges reflect capital cost but also financing cost (which the builder and its partners bare, at a higher interest rate than the state would pay) and ongoing maintenance, as well as a risk provision for the builder prepared to take on such a complex and one-off design. There are indeed suggestions that leasing cost structure is a useful way for HMG to save face by not having the data on the sky-high capital cost of this farcical fleet. A good rule of thumb is to never allow the state to specify and procure directly on complex engineering projects.
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