Thames Valley Chamber of Commerce (TVCC) have taken another positive step in advancing the timely delivery of the Western Rail Link to Heathrow (WRLtH) scheme with the receipt of a refreshed economic study* undertaken by consultants.
Key Findings
- Estimated costs of the scheme are lower (i.e., incorporating significant costs efficiencies)
- The viability of the scheme (Internal Rate of Return) is significantly improved with a three-runway (3R) scenario (now backed by Government) noting also a positive outcome based on a 2R scenario
- A Return on Investment could be achieved by 2044 (based on a 2032 opening date)
Alongside the prevailing momentum associated with Heathrow expansion, the study affords the opportunity for a further, more detailed, Phase 2 study to develop the business case and inform any future Development Consent Order (DCO) in advance of a 3R.
Key Indications
- Surface access demand at Heathrow has bounced back post-COVID, with 2025 levels matching pre-pandemic forecasts.
- A review of capital costs suggests that there is potential for significant savings, especially on tunnelling.
- A strawman delivery model examining the potential to attract third-party funding has split WRLtH into two packages:
- Package A: Tunnel and T5 connection, proposed for private finance.
- Package B: Langley grade-separated junction, delivered by Network Rail.
- Testing of the delivery model indicates that:
- Under a 2R scenario the model could turn a profit, but returns would be unattractive unless private-sector capital costs could be significantly reduced.
- With DfT/Network Rail funding Package B, Package A could, in theory, be fully privately financed – although the rate of return is probably insufficient for the perceived risk.
- Three Runway (3R) Scenario: Testing under the modelled 3R scenario indicates:
- Positive ROI achievable by 2044 (assuming a 2032 opening).
- Over 30 years, IRR = 8.1% (4.5% to 11.0% for modelled sensitivities)
- Investors in UK infrastructure typically seek IRRs of 8–10%, with ±2% depending on risk, sector, and project duration.
Conclusion
The key finding/s from the study also indicates that, theoretically, it is possible to wholly fund the tunnel by the private sector – i.e., the report indicates a positive outcome based on a two-runway airport and a stronger outcome should a third runway be built.
A Phase 2 study would broaden the original Phase 1 scope of work, to undertake a ‘deeper dive’ into the economic benefits, for towns such as Didcot, Reading, Oxford, Slough and Swindon, and the potential growth opportunities for locations such as Culham, Harwell, Oxford North and the commercial estates along the M4.
TVCC has been a consistent champion of the WRLtH scheme. With the support of both the All-Party Parliamentary Groups for the Thames Valley and WRLtH, TVCC are calling on existing supporters, the wider business community and the region’s local authorities to reaffirm their commitment and provide:
- Written support for the timely delivery of the WRLtH scheme (signatories)
- Financial support for the commissioning of the Phase 2 study (some public funding commitment has been secured)
To find out more and to provide your support please contact Gareth Ralphs, Head of Business Representation and Policy, TVCC.
*the full report will not be published as it contains potentially sensitive commercial information
