The cost of electrifying the Great Western Railway mainline has tripled from the original estimate to as much as £2.8bn, an overrun that puts a host of other rail improvement schemes in doubt.

Mark Carne, the chief executive of Network Rail, told the public accounts committee on Wednesday that the delayed project to electrify the London to Cardiff line would cost £2.5bn-£2.8bn instead of the £874m projected in 2013.



MPs lambasted Carne, as well as the rail regulator tasked with scrutinising Network Rail’s spending, for failing to keep a grip on the costs. Meg Hillier, chair of the committee, said it was “a staggering increase” given that Network Rail had said only a year ago that it would cost £1.6bn.



Carne said the cost increase was down to a combination of inadequate planning, estimates that were based on outdated knowledge of the railways and a change in the flexibility of the regulatory regime.



Network Rail was reclassified as a public body in September 2014, reducing its ability to borrow to pay for engineering work that cost more than predicted under its funding settlement.



Asked if the escalating costs meant other rail engineering projects were at risk, Carne said: “Because we are no longer able to raise additional debt, something has to give.”



He added: “Fundamentally the cost estimates were wrong.”



Pressed on whether there would be further “bad news” in a forthcoming review by Sir Peter Hendy of what Network Rail will be able to deliver from its promised £38.3bn five-year programme, Carne replied: “Undoubtedly.”



The problems at Network Rail came to a head earlier this year when the government shelved major promised upgrades to rail lines in the Midlands and the north of England, blaming the infrastructure owner’s “unacceptable performance”.

Electrification of the Great Western mainline is continuing but while work on the Transpennine and Midland mainline is officially “unpaused”, neither will be completed until at least 2022.

MPs also turned their fire on Richard Price, chief executive of the rail regulator Office of Rail and Road. Hillier asked Price of the Great Western project: “You agreed to sign off this as a realistic cost a year ago, the lower figure, [£1.6bn] and it’s nearly doubled?”



Price said: “Our role was to establish what it ought to cost, delivered in an efficient way by an efficient company. We established the cost of £1.6bn last year and we stand by that as the cost of what it would take to deliver the project efficiently.”



Hillier responded: “The taxpayer’s paying you to watch them … Both of you fell asleep on the job, surely?”



Other committee members pressed Price to explain why he had not yet resigned. He replied: “It would be the wrong thing at this stage to let the company off the hook. The targets across the business remain firmly within its gift and we need to hold them to account.”



The overrun on electrification is likely to have further knock-on costs due to the new electric trains being built for the route. Philip Rutnam, the permanent secretary of the Department for Transport (DfT), told the committee: “We are very concerned indeed at the prospect that we may have trains for the Great Western mainline, designed to have many benefits, and not be able to use them.”



He said the DfT was looking at a range of measures to mitigate the risk as a top priority.

Hillier said: “It’s unbelievable, and unacceptable, that there was such poor planning before and such concerns now.”



She ended the session by concluding that the rail industry’s investment planning was “plagued by rampant optimism” and said that Network Rail would be hauled back for a further hearing in the new year to check on its progress.



Speaking afterwards, Hillier added: “We got out of Network Rail today that they won’t meet the efficiency savings that they’ve been set, because it’s just not possible. It suggests that the regulator has gone awry in their understanding of what it takes to run a railway.”