Our Ref:         FOI-1296-1819

Thank you for your request received on 9 August 2018 asking for information about the Rotherhithe to Canary Wharf Crossing Project.

Your request has been considered in accordance with the requirements of the Freedom of Information Act and our information access policy. I can confirm we hold some of the information you require. You asked:

1) initial infrastructure costs is still £200m, as detailed above. If not, please confirm latest estimate including 'as at' date.

Since the last public consultation, we have been further developing a preferred option and associated cost estimate. In accordance with the EIR, we are not obliged to supply the information you have requested as it is subject to a statutory exemption to the right of access to information, under regulation 12(4)(d) of the EIR.

In this instance the exemption has been applied as the information you have requested is incomplete. An updated estimate for our preferred option will be provided at the next public consultation in the autumn.

This exemption is subject to a public interest test, which requires us to assess whether the public interest in applying the exemption outweighs the public interest in disclosure. In this instance, it is considered that the public interest favours the publication of this information, in context and according to the pre-determined schedule, rather than in response to your request, to ensure the information is provided accurately and in an accessible manner.

2) whether the Optimism Bias, 'OB' project type classification is i) Non Standard Building, 'NSB' or ii) Non Standard Civil Engineering, 'NSCE'. If neither, confirm the selected project type.

For the purpose of calculating an appropriate level of Optimism Bias for the Business Case appraisal, this project has been classified as a Non-Standard Civil Engineering project type.

3) Confirm the optimism bias percentage and value currently applied to the Rotherhithe project including the 'as at' date.

The Optimism Bias applied to the Business Case appraisal during the previous public consultation was 52% for a bridge option. However, this is under review as the Business Case is developed further and our understanding of scheme estimates and the associated level of risk matures.

4) Where the capital expenditure OB percentage is less than 51% for NSB or 66% for NSCE, please detail how each factor has been mitigated.

The Treasury’s Green Book recommends that optimism bias should be included in appraisals to take account of the tendency for appraisers to be overly optimistic about key project parameters such as cost, duration and benefits delivery. The guidance states that it is open to the project team to apply their best judgement as to what optimism bias to apply. In the case of this project, at the time the initial assessment was undertaken, 52% was considered appropriate based on our understanding of scheme estimates and the associated levels of risk. 66% is an upper bound percentage provided in the guidance and represents an average across a range of NSCE projects at a specific point in time. It is acceptable to use this a starting point and apply professional judgement based on the specifics of the project in question. In all projects, and in line with the guidance, the initial optimism bias should not be ‘locked in’ and as the design and cost estimates mature optimism bias is likely to reduce, reflecting a better understanding of these parameters. As stated in question 3, we are continually refining and reviewing an appropriate level of optimism bias.

If this is not the information you are looking for please feel free to contact me.

Please see the attached information sheet for details of your right to appeal.

Yours sincerely

Gemma Jacob
Senior FOI Case Officer
FOI Case Management Team
General Counsel
Transport for London
[email protected]