Wednesbury to Brierley Hill Metro extension in doubt after cost rises to £550 million
The future of the Wednesbury to Brierley Hill Metro extension has been plunged into doubt after its cost ballooned to £550 million.
The Express & Star can exclusively reveal that leaders at the West Midlands Combined Authority (WMCA) have voted to split the scheme into two phases due to spiralling costs.
It means the Wednesbury to Dudley stretch will proceed as planned – at a projected cost of £385m – while the rest of the route to Brierley Hill is put on hold.
The funding shortfall for the whole project currently stands at around £290m.
It comes after a new WMCA report on 'Metro affordability' said the expected cost of the full 6.8-mile route has shot up from £449m to £550m – a 22 per cent hike from when it was approved in 2019.
According to the report Covid, Brexit and the war in Ukraine have all contributed towards spiralling costs.
Bosses insist they are committed to completing the extension in full.
A WMCA spokesperson said: "Construction is continuing on the route between Wednesbury and Dudley town centre, which will be ready to open as planned during 2024.
"A combination of factors including a rise in construction and energy costs, at the same time as a reduction in the farebox income as a result of the Covid pandemic, means the extension to Brierley Hill will be completed in a second phase.
"The WMCA and partners will continue to actively seek funding and develop additional funding mechanisms to allow the construction of this second phase at the earliest opportunity."
The report says a one-year delay to the start of the scheme – caused by issues with land acquisition and government legislation – also contributed to rising costs.
It says: "The cost approved in 2019 was £449m. The latest Midland Metro Alliance (MMA) cost estimates have set out a revised cost estimate of £550m to deliver the full scope of the extension."
According to the report £45m of the increase is down to a spike in costs of materials, while £18m is attributed to delays to acquiring land and schedule extensions.
The report added: "The recent conflict within the Ukraine is impacting not only cost of fuel but also construction materials, given that Ukraine is a large supplier of raw material.
"This has resulted in a spike in material costs since October 2021 from a predicted index of 2.5 per cent to 17 per cent.
"This is having a significant impact on capital costs given the original inflation allowances assumed have been far exceeded."
The report, which was presented to the WMCA at a meeting on Friday but has not been made public, said the scheme had cost £194m up to now.
It said splitting its construction into two phases would result in costs increasing further, with phase one from Wednesbury to Dudley now budgeted at £385m.
The first tram lines were installed along Castle Hill in Dudley earlier this year, in what West Midlands Mayor Andy Street described as a "momentous milestone" for the Black Country.
The full extension was already delayed by 20 months and had been expected to be completed by autumn 2025.