Over the weekend it was announced that the estimated project cost for London’s Thames Cable Car (Gondola) has ballooned to an estimated £60m. For those interested, that means the system will cost roughly $100m USD per kilometer.
With the possible exception of the Caracas Metrocable (whose finances are discussed here), the London Thames Cable Car will easily be the most expensive gondola/cable car ever built. It’s even more expensive than the overpriced Burnaby Mountain Gondola, whose cost has also yet to be explained or justified.
As we discuss here, the London Thames Cable Car appears to be nothing more than the latest example of largely English-speaking transit agencies’ unwillingness and/or inability to reign in costs related to transit projects.
Whether this is an example of scope creep, pork barrelling, corruption or just pure out-and-out incompetence is virtually irrelevant at this point because all or some clearly have a role to play in this debacle.
As someone who happens to know a little bit about cable transit systems, let be me completely blunt: There is absolutely, positively, completely no reason whatsoever this project should cost London taxpayers ~$100m USD. Not a single good reason:
ONE. Off-the shelf MDG technology is being used.
While we have no confirmation of this fact, we can use a little something called logic to figure it out. Construction on the project started just a few months ago. As the goal is to complete the system by next summer, the only possible way in which to do that is to use MDG technology.
3S technology would be the sexier (possibly even better) choice here, but the reality is this: MDG technology has virtually off-the-shelf availability; 3S has to be built to order. That’s why an MDG can be turned around in such a short period of time.
Widely available renderings also indicate MDG technology.
All-in, an MDG system can be built for $10m – $30m USD per kilometre. Max.
At their most expensive, Medellin’s Metrocable systems were coming in at ~$25m USD and that included intermediary stations, turns, 4,000 pphpd capacity (compared to London’s 2,500 pphpd), land acquisition and all station and tower architecture.
TWO. Where the technology is manufactured invalidates questions of where it’s built.
Okay, sure. Medellin isn’t London and it certainly doesn’t cost as much as London. But remember: As the majority of the cable system itself is manufactured in a western-European location (France, Austria, Switzerland and/or Italy), that means the cost of the systems’ electro-mechanical components (cabins, cable, towers, stations, etc.) will not vary much from place-to-place.
The only thing that’s likely to cause any sort of shift in price is currency and/or commodity fluctuations. But as the Euro has been depreciating against the British Pound for much of the last two years, shouldn’t the price actually be decreasing?
The one counter-argument to this could be if much of the system is being manufactured in Switzerland – in which case the rapid over-inflation of the Franc could be leading to these increases but a) much of that over-inflation has been recently stemmed due by Switzerland’s Central Bank and b) as we understand it the system is being built by Doppelmayr not Garaventa.
This is important because Doppelmayr is an Austrian company that trades in Euros and Garaventa is a Swiss subsidiary that trades in Francs. In other words, somewhere between 75 and 90% of the cost of this system is being incurred purely in London alone.
THREE. The capacity of this system invalidates the need for large scale station infrastructure.
As reported, the Thames Cable Car is expected to move roughly 1,000,000 people in its first year of operations with a throughput of 2,500 persons per hour per direction. One million looks like a big number, but it’s really not when you consider how many hours there are in a day and how many days there are in the year.
(Note: The Londonist riffs on this concept with a deplorable calculation that demonstrates how only 228 people will use the system per hour. This calculation is a gross over-simplification of the problem because it spreads ridership evenly across every day and every hour of a 365 day year. Of course we know that ridership has peaks and valleys from hour-to-hour and day-to-day especially when you inject a massive peak such as will occur during the Summer Olympics. This calculation is therefore nothing more than brazen misinformation and irresponsible commentary.)
Oversized station architecture typically accounts for the bulk of costs in a cable system such as this, but given the modest number of people this system is anticipated to move, there is absolutely no reason to invest in large scale stations.
To demonstrate: The Koblenz Rheinseilbahn utilizes the above-mentioned 3S technology and moves ~3,600 pphpd. It has been an enormous success and I’m told is moving tens of thousands of people per day due to the bi-annual (and inexplicably popular) BUGA horticultural festival.
The Koblenz Rheinseilbahn is also only 1 km long and cost ~$20m USD all in.
This is what the Koblenz stations look like:
That's the entire station, infrastructure and all. Image by Steven Dale.
Now compare that to London:
See the difference?
Granted the London system has two things that the Koblenz system does not. Owing to Koblenz’s current status as a temporary installation, it does not have the maintenance bay and custom-designed towers that the Thames Cable Car will. Fine. But do those two items justify the Thames Cable Car’s absurd price premium over the Rheinseilbahn?
Not when the Rheinseilbahn carries almost double the number of people.
Transport for London and Mayor Boris Johnson owe the people of London an explanation – particularly as they now plan to pay for it “out of the rail budget.”
Suffice it to say, this isn’t going to win Urban Gondolas any fans – likely just a few more enemies in one of the most highly visible cities in the world.
25 Comments
Its interesting, because following the offical announcement, there no trace of rising costs of the Gondola “real” machinery and construction, but just say “”technical and legal advice, project management and assurance, land acquisition and procurement costs”
It really stinks , because the works have already started, and thus : how could they have started whitout a contract… doesn’t a public office (and also a private company following EC rules) has to do these things BEFORE signing a contract .
I don’t know the UK specific rule , but a similar plant in the rest of EC SHOULD need an official and public open tender procedure…
Its really strange… I’m used to these things as happen in corrupt italy (and often ends with someone in jail , fortunately) but didn’t thought could happen in London
A little off topic: We’ve talked before about per-mile costs, and I propose we start talking about per-station costs as well (or even instead). I’d love to see numbers from an actual project showing how much the stations cost compared to the cable, towers, and cars. My engineering gut feeling is that a vast majority of the costs occur at the stations – almost all machinery, the ground disturbance, real estate, etc. are at the stations. Towers are simple steel and concrete structures, and cable is cheap. It’s possible the cars are expensive, but I don’t have a gut feeling about if they’re expensive on the scale of the stations themselves. Actually, if they are expensive compared to stations, I’d like to start using dollars based on the number of cars – “a 70 car system”.
My point is that per mile is fairly meaningless with gondolas. Of course with regard to this post, £60m is crazy no matter what the metric used.
I think its quite simple as to what’s going on here. The London Cable Car will be fully customized and will not use any “utilitarian”, off the shelf cable parts. In fact, the system is expected to use an elaborate lighting scheme at night so that it rivals other tourist venues – i.e. London Eye etc.
Just look at the towers!
http://www.thisislondon.co.uk/standard/article-23933964-london-cable-cars-are-go-but-pound-40m-bill-is-in-the-air.do
This is reminiscent of another superbly expensive cable project halfway around the world – the Portland Aerial Tram.
So the lesson here is: if you decide to customize your cable system, it’ll cost you a leg and an arm, if not all your limbs. Nonetheless, while this is a gondola built in a city, it should really not be considered an urban transit system given its tourist angle.
It will be an MDG. I have a good feeling it will use stock parts for the most part. Not many gondolas use one-off technologies. I’m also an optimist and so I see it being open for the Olympics.
As for the price tag, I don’t think we can underestimate the simple fact that a lot of the bloat comes from doing business in the developed world in a major metropolitan area. It is perhaps not entirely wise to compare the costs incurred in Medellin to those incurred in London.
But the numbers do seem high. It would be nice to see a post that provides a breakdown of how the money is being spent in order to try to untangle all of the factors that have contributed to this.
@Matt : Roughly in a MGD8 the 40-50% of cost is into the two stations, the rest for towers and cables – this is true for a 1,5-3 kms line in mountains.
Line costs in cities (apart the underwater work choosen in London) should be decisely lower respect in mountains.
Intermediate stations could increase cost by 15% each .
I would like too to see a cost increase breakdown, since I think that its probabily not due to MGB plant but other costs not-gondola related.
How about the gondola cars themselves? Are they included in the cable and tower costs?
Yeah, when you talk about “electro-mechanical” costs you’re basically including cabins, towers, station infrastructure (not architecture), cables, motors, electronics and installation.
Basically imagine everything you’d need at a ski resort to get a system to work – that’s electro-mechanical cost.
Giorgio didn’t mention electro-mechanical costs. He broke it into stations, and towers/cables. Is all of the electo-mechanical included in the tower/cable number?
Generally Electro-Mechanical includes all items (and installations) that would be provided by a cable transit manufacturer.
Yes, these are costs relative to everything you need to build a gondola . if we take a recent MGD 8 of 2400 mts line , cost was approx. 16.5 Millions euro divided into :
Station machinery 3.8 m€ (power) 3.2 (return with cabins storage) with controls
Buildings (simple) 1.8 m€
line and towers (don’t have exact # , i think 18) 4.2 m€
Gondola (48 or 52) 1.8 m€
Construction 1,7 m€ – 140 working days
9 months from contract signing to inauguration
Gondola cabs are expensive .. ATW ones even more , the two new Gangloff cabins of Courmayeur ATW 120 will cost 600.000€
[Steven] I still don’t think you understood my question. But Giorgio did, so it’s all good.
Maybe it’s a 4S-System with car-transportation over the river Thames and with direct connection to the Underground and DLR 😉
Seriously, I think tax payers should be asked wheather they like to pay for it. During the last years London became an overprized playground and it’s taking itself too serious, so that other cities and areas are left behind.
As much as I’d like to see that cable installation over there, what is happening there is so wrong and I wouldn’t mind, if that nonsense would be stopped.
I wonder how much it costs to build large stations with a maintenance facility in the heart of London. And I wonder how much it costs to put an 80 meter tower in the middle of the Thames River. These are very serious cost drivers.
My point is that we need to compare the costs of this project against the cost of a comparable project, and so far we haven’t done that — primarily because there are really no easy comparisons here.
While I agree with you in principal, I think what really gets me is that this extra £15m is for “technical and legal advice, project management and assurance, land acquisition and procurement costs.”
Land acquisition is likely the most expensive piece there. A quick search says condos sell for around $500k each on the Thames, and most of that has to be land value. Assuming these are, say, 25 stories, half the value is from land, and that you can fit a station on 2 condos worth of footprint, that’s £7m per station.
Just a note on the quoted USD 20 million cost for Koblenz – I participated in a site visit there this summer and part of the reason for the low cost is that the plan is to reuse the equipment in subsequent 3S installations. So Koblenz is essentially renting a 3S for three years for that amount, not buying it, and the cost from Doppelmayr is based on that business plan.
Agreed and that’s an excellent point. But were we to double the cost of the Koblenz system (just for arguments’ sake), the London Cable Car would still be roughly double the price of Kolbenz while moving less people with a cheaper technology.
Direct comparisons are difficult, but this project does worry me as it could have unknown ramifications down the line.
Sean: As far as I aware the towers are not in the middle, but close to the banks, of the river which is still used by a considerable amount of water borne traffic. Central towers would be an unacceptable hazard to navigation. However your general point about sinking pylons into the river bed driving costs remains valid.
Giorgio TX.
Hi there. Can anyone could tell me what is the approximate percentage of the operation cost within the whole system? Maybe between 4-5% of the total costs?
Thanks.
HI Julio,
You can’t really make the calculation that way because of all the variables involved. Each location will be unique and different to itself. As a VERY approximate calculation, you can say 10% of the total Electro-Mechanical costs (the stuff you buy from the gondola builder).
Thanks Steven.
I’m trying to built a buisness plan for promoting the system. The problem is that if you reach the manufacturers in a direct way, the´ll try to overpass you in the whole buissness process. That´s why I´m asking in this forum some basic stuffs, like the depreciation of the equipment, etc. Is there any paper where I can get some guide for approximate costs? Thanks again.
If you are able to understand at least something in Italian , I suggest to look and register to the italian http://www.funivie.org forum , there’s a wealth of informations including a software for calculating lift costs …
Roughly : in europe most countries have rather strict rules for annual/pluriannual revisions, but are different from country to country, in Italy any lift after 40 years need to be rebuilt from scratch, in France not..
Depreciation is relative, in my experience the 10%/year used in industrial plants may be even considered prudential , since there are markets for used lifts – a 10 Years MGD could stll be sold for >30% of initial value …
Another option is using company information services like http://www.societe.com for looking into the balance sheets of French lift companies, or similar for other
http://en.wikipedia.org/wiki/Table_Mountain_Aerial_Cableway
http://tablemountain.net/
http://www.environmentalgraffiti.com/featured/scariest-cable-car-rides/20841
http://www.youtube.com/watch?v=OIrLZYnmHBc
http://www.youtube.com/watch?v=veGA_pzoeNc
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