Costs and Funding

Costs

UK per mile railway build cost estimates range from £12m-£20m per mile, excluding land acquisition costs.  A light rail solution would be towards the lower end of the above range, heavy rail would be towards the higher end.

While the outlined route is largely flat or undulating, there are 17 bridge structures which would need to be built or altered.

A freight line into RAF Brize Norton would require a heavy rail solution which would materially increase costs. Given that RAF Brize Norton would be either the principal or only freight user, it is reasonable that if a heavy solution is implemented, then the MoD should cover the additional cost from a light to a heavy rail solution.

Funding

A. Funding from Housing

This proposal envisages no extra houses being built through to 2031, beyond those which West Oxfordshire District Council (“WODC”) has already committed to.

1.     As per p46 of the 2031 local plan, WODC has committed to build 10,450 houses between 2021 and 2031.  As per p42, approximately 67%, or 6,989 new homes, of this housing is near the planned railway in the Eynsham, Witney, Burford and Carterton areas.  Each of these new homes is already committed, whether or not a railway is built.  Each will bring an average of two and a half additional people and more than one additional car, putting more pressure on the already very stressed road network

2.       No plans have been finalised for housing in the district beyond 2031. Housebuilding rates beyond 2031 will likely continue at a minimum of 50% of the rate from 2021-2031. Taking this conservative 50% assumption, a further 3,500 homes would be built in the areas around the railway between 2031-2041. 

3.       So, between 2021 and 2041, at least 10,500 homes will be built in the area through which the railway will run, irrespective of whether or not this railway is built.

4.     The railway will benefit landowners and developers from the uplift in house values. We must avoid a free rider effect, where the landowners and developers benefit from the infrastructure but the taxpayer pays for the infrastructure.

5.     At the feasibility study phase we will explore the various land value capture mechanisms used in the UK and internationally to decide which is the most appropriate mechanism to capture a proportion of this land value uplift.

6.     On the Northumberland line between Newcastle and Ashington, approximately 30% of the capital costs will be met through land value capture methods.  We have commissioned E-Rail to quantify the potential for Land Value Capture along this route. E-Rail found that more than £300m in value could be captured which can be contributed towards funding the construction of the railway, with an equivalent amount being gained by the landowners and developers

7.     Financing can be used to bridge the timing gap between the railway construction costs and the last home built.

B. From Commercial / Industrial / Retail activities

There is an opportunity to build a Green Aerospace & Science Park at Carterton, using the synergies and skills in and around the airbase with those at the Oxford universities. This could be a win-win scenario for Carterton as a community, the RAF and the MoD, for the science and engineering faculties at the universities and for business.  Any new commercial developments should also contribute towards the cost of building the line.

C. MoD / RAF Brize Norton

The MoD may value the benefits of connecting RAF Brize Norton to the national rail network and its key supply depots.  If so, the MoD would likely be the sole freight customer and therefore would be the party to cover the additional costs of a heavy rail solution that can handle freight traffic. Additionally, the MoD should not be a free rider on the underlying costs of building the railway and should also pay for a portion of the overall build, beyond just the freight cost increment. 

D. Traditional government financing for rail projects

Just as the government funds railway projects around the country.