3.36 We have re-estimated the May 1998 value for money assessment using patronage and fare figures from the Government Central Case, but with the following amended assumptions:
■ we used the Department's recommended economic growth assumptions to calculate growth in time saving benefits;
■ time saving estimates were adjusted to assume one third of Eurostar services continue to use Waterloo, so only benefiting from Section 1 time savings of 20 minutes;
■ the Department was unable to provide the detailed calculations used to estimate road decongestion and environmental freight benefits (non-user transport benefits). We could not verify them and have therefore calculated the total net present value with and without these benefits;
■ costs of £170 million have been included for London Underground and A2 works following discussions with the Department;
■ we removed the regeneration benefits as current guidance states that these should be considered but not quantified in money terms. In view of its decision to remove time saving benefits for non-UK residents from the calculations, the Department believes that the methodology adopted was robust and appropriate. However, the Department also accepts that the use of monetary values cannot be supported by any published departmental appraisal guidance.
3.37 Figure 20 shows that these adjustments reduce the net present value of the project from the Government's figure of around £1,000 million to some £220 million, with a benefit-cost ratio of 1.1:1. We calculate that if Eurostar UK performs just nine per cent below the Government Central Case, the net present value of the Link falls to zero. If the figures for non-user transport benefits are excluded, the net present value is only £120 million, with a benefit to cost ratio of just over 1:1. If Eurostar UK performs at just four per cent below forecast passenger numbers, the net present value falls to zero. Patronage on Eurostar UK in 1999 was 6.6 million, some 10 per cent lower than the Government Central Case forecast of 7.4 million.
3.38 If the Department's estimate of regeneration benefits is included, the net present value rises to some £720 million, with a benefit-cost ratio of 1.3:1, some £300 million lower than the Department's estimate.