Derailment of Glasgow Airport Link WRONG


As any economics student can point out, the cost of not spending money has just as many consequences as a decision to spend.

The key is making the right decisions on what to spend on. When it comes to the public purse we rely on the government of the day to make these decisions on our behalf to minimise the ‘opportunity cost’. Or to put it another way make sure our limited financial resources are put to best use.

More often than not they get it right.  For example, if the Westminster government had not made a decision to commit £300 million plus on a new car scrappage scheme, then an industry employing tens of thousands could have quite feasibly collapsed.
 
But sometimes they can get it horribly wrong. Has there really been a truly satisfactory business case made for cancelling Glasgow’s Airport Rail Link, while the Waverly Borders Rail Link continues to press ahead?
 
Are our scarce resources really being put to best use?

The cancellation decision was ratified today as part of the government's budget plans.

While no one is denying that hard decisions have to be made in the face of a shrinking budget settlement and an adverse economic environment. But surely in these circumstances the only justification for millions of pounds of expenditure on capital projects should be economic benefit.

Is spending taxpayer’s money in a certain way going to create jobs and greater prosperity for the people of Scotland and if so to what extent?

Studies have shown that both the Waverly and Glasgow projects bring benefits, but the devil, as always, is in the detail.

In an ideal world the Borders should have a rail connection. The area would benefit from better connections making it easier to attract more and higher quality jobs.

With new stations at Gorebridge, Tweedbank, Newtongrange, Esbank and Shawfair firms would be flocking to move out of the high rent, high rate and high wage city centre to take advantage of relatively lower cost rural locations.

But then maybe not, a look at the facts tells a different story.

In 2002 Scottish Enterprise commissioned a study by DTZ Pieda Consulting into the viability of the Waverly Borders Rail Link.

It looked at how the project would impact on employment, housing, business development and inward investment.

It estimated that between 63 and 213 long term jobs would be created in the Borders by the construction of the new rail link and up to £4.9 million could be created as a result of the project for the local economy. The report also reported benefits from several hundred short term construction jobs.

While the economic impact of the reopening on Midlothian and Edinburgh would be ‘minimal’

All this for £295 million, even at the optimistic end of the forecast this is over £1 million per job created.

Now on purely economic reasoning and admittedly not taking on board the wider social benefits a rail link would bring, this is hardly a bargain in anyone’s book.
 
Now compare this with the economic impact work done on the proposed Glasgow airport link.

Even without taking account of the so far incalculable benefits the link might have in relation to the Commonwealth Games, the case, when compared to the Waverly project looks cast iron.

The estimated cost of the Glasgow link is £395 million of which £47 million has already been spent and will be lost if the plug is pulled.
 
The job creation estimate for this expenditure is 1300 directly created by the completion of the link. Around six times the direct economic return of the Border Rail Link in simple job numbers alone.

The recent State of the City Conference threw up some figures that Glasgow is weathering the economic crisis better than most and is well placed for recovery.

Aborting such an important infrastructure project with this scale of public investment will hardly help this predicted recovery.

Work on the Waverly Link has far from passed the point of no return; there is nothing to stop the government from reversing their decision and switching the scarce resources planned for the Waverly link west.

The ‘opportunity cost’ is surely too great not to.

But then maybe these decisions are nothing to do with economic common sense, reason, or even short term political dogma.

Maybe Glasgow’s project was sunk as soon as it was christened with an acronym, GARL.

Surely planners should have learned a lesson from the ill fated EARL, the scrapped Edinburgh Airport Rail Link?

If only a suitable moniker could be found for the Borders project. The Waverly Rail Open Network Gateway perhaps, or WRONG for short.


 

 
Comments (1)
1 Thursday, 12 January 2012 04:35
Glasgow Airport Parking
I think compare this with the economic brunt work done on the proposed Glasgow airport link.

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