Whitehall questions future of light rail

The future of light rail schemes is in doubt after rumblings from Whitehall suggest that the government could be about to renege on its 10-year transport plan targets and scrap further schemes.

Two such schemes, the £250m South Hampshire Rapid Transit project and the £500m Leeds Supertram, are being reviewed by transport secretary Alistair Darling after costs on both projects have rocketed.

In its transport plan, the government aims to construct 25 light rail lines by the end of 2010. In total, only nine schemes have been approved, with six in operation. A further four schemes are being reviewed.

However, sources close to the Department for Transport (DfT) claim the secretary of state for transport is becoming increasingly concerned over the use of light rail schemes as they no longer appear to be offering value for money.

The likelihood of the government reaching its targets has been further reduced after the Confederation for Passenger Transport recently estimated that all light rail schemes would need to be approved by next year to be built by 2010.

It added that some councils, such as Bristol, were having difficulty in finding the development funds for such schemes and that the

DfT had been unwilling to allow local transport plan funds to be used to develop the schemes.

Contractors are also justifiably nervous after Carillion and Amey took substantial losses on light rail schemes for Nottingham and Croydon.

"These contracts are just not attractive anymore," said one contractor. "I don't see how the government can make these schemes attractive to the industry and meet its targets."

A DfT spokeswoman was unable to confirm or deny the scrapping of future schemes and told CJ the department is urgently reviewing the two contracts in question after the Leeds project broke the £354m threshold and the Hampshire scheme smashed through the £170m limit because of design changes.

"We need to ensure both schemes still represent value for money," she said.

Asked what the likely outcome of the review would be, she replied: "We are considering whether the procurement methods used for light rail in recent years are still giving us the best value for money. We are working with the local authorities to oversee the next generation of proposed schemes and explore some possible new approaches."