PARLIAMENTARY WRITTEN QUESTION
Railways: Finance (2 November 2022)

The Benefit Cost Ratio (BCR) is only one element of the economic case we consider, and the economic case is itself one of 5 dimensions to be considered. Some of our projects do not have estimated BCRs.

The highest core BCR within the RNEP is “financially positive”. This occurs when the revenues generated from an investment outweigh the upfront capital costs and the ongoing operating costs. The lowest core BCR we have recorded is from the bottom end of a range of potential options for a project at an early stage of development and is 0.4.

The median BCR in our available dataset is 1.91, however, given the range of maturity, sensitivities and assumptions involved in BCRs and the fact that this is one element of one case in the business cases for enhancements projects, this median should not be interpreted as meaningfully representative of the value of rail enhancements or the portfolio.