175 years of the railway in Cardiff and south Wales

Professor Stuart Cole, CBE. Emeritus Professor of Transport Economics and Policy, Prifysgol de Cymru / University of South Wales

Next Thursday a ‘Past, Present Future’ artists impression display at Cardiff Central railway station will illustrate its 175 years timeline.

In 1850, Cardiff station (as it was then known) represented the completion of the Great Western Railway (GWR) main line between Swansea and Chepstow; and onwards to London (1851), to Carmarthen (1852) and the GWR port at Neyland (1856).

The display also illustrates how today’s station may look in the future with a larger southern concourse to increase capacity and improve passenger flow. This will provide for increased throughput of passengers from 11.5 million passengers currently, to Network Rail’s estimated long-term passenger growth to 32 million by 2043.

Railway investment, funding and impact 1850’s

Railway construction in the 1840’s and 1850’s was referred to at the time as ‘railway mania’ The money to build stations, track and rolling stock came from the private sector and for some years the government did not fully understand the purpose of the railways.

Many small companies were set up using local money from early coal and iron industrialists and wealthy landowners keen to sell their, and tenant farmers, agricultural produce. These landowners also saw the value of coal deposits under their farm land which, until the Coal Industry Nationalisation Act 1946, they owned and from which they had a share of the income received by the mining company.

It was often the case that a major train company such as the Great Western Railway in south Wales or the London and North Western Railway in north Wales would provide a part of the investment. However setting up a separate company limited the big railway company’s financial risk to the value of the shares bought. This kept the big company, as a whole, safe.

The South Wales Railway which built the main line merged with the GWR in 1862 when the enterprise had operated profitably for twelve years and was now considered safe by the parent company.

Not all railway enterprises were successful. The Manchester and Milford Railway Ltd (Carmarthen – Aberystwyth) was built following the enthusiasm of local people who wanted a railway but did not consider the required extent of passenger and freight demand to make it profitable – which was not forthcoming. Though effectively bankrupt it was eventually taken over by the GWR in 1911.

The amounts of required capital investment and early – days cash flow support  were considerable compared with any other single industrial or commercial investment. Most enterprises were for example local country estates, cotton mills, ironworks and coalmines. For the GWR shareholders the size of potential personal losses would have been unacceptable. Eventually the government  understood a need to put business and the economy on a surer foundation.

This would increase public confidence in the probity of business and of scheme promoters and enable potential investors to protect their non-railway assets. To this end a series of acts of parliament were passed between 1844 and 1856 providing joint – stock ownership (i.e. a person owned shares in a company) and possibly even more important the Limited Liability Act of 1855. Without them it is unlikely that the funding would have been forthcoming and in consequence most of our railway network would not have been built.

Railway funding 2025

The future expansion of Cardiff Central station is needed to alleviate overcrowding at peak times and only through careful planning does it deliver a rail service for the tens of thousands of fans travelling by train to major events. These are no longer restricted to rugby matches but to many concerts making Cardiff an entertainment capital for England as well as Wales.

Government officials and politicians are calling it Metro Central – a rather frequently used title conferred on many other public transport centres. Perhaps Canolog might be preferable; naming it after the consortium funding this positive and welcome development and showing a more definite Cymry – Welsh empathy.

It will form ‘part of an integrated transport hub’  conceived in 2010 as Cardiff – A Sustainable Travel City (when I sat on the scheme planning panel for the Welsh Assembly Government). This provided a bus station connected to a considerably enlarged railway station through a retail mall. The initial construction has already seen Central Square welcoming visitors and residents in attractive surroundings with new offices and at its heart the new BBC Cymru Wales studios and Cardiff Bus Interchange.

One would hope that there will not be a repeat of the bus interchange scenario which as this column has pointed out has too little capacity to be a single hub for the extensive network of bus services operating in Cardiff.

To achieve such an integrated hub involving Cardiff Central Station will require a source of investment quite unfamiliar to the nineteenth-century entrepreneurs. Funding for railway infrastructure investment now comes from the public sector.

The Canolog alliance is a partnership working together on transport schemes being delivered in the centre of Cardiff. It comprises Transport for Wales (TfW), Welsh Government, UK Department for Transport (DfT)  (hopefully not continuing as a minor investor which one recalls was its role in the Valley Lines electrification), Cardiff Council, Network Rail and Cardiff Capital Region (a consortium of ten local authorities in south-east Wales).

Comparing private and public investment

There are some similarities in the railway investment appraisal process of 1825 (or 1850)  and 2025. Cost of construction and ther timespan to achieve a reasonable rate of return are common to both. Where they differ is that in 1850 profitability in hard cash was the basis for investment.

Today the DfT , TfW, and Welsh Government follow HM Treasury’s ‘Green Book’ guidance which requires strategic, economic, financial and environmental criteria to be satisfied if they are to receive approval for a public sector business case. These represent economic growth, reduced road congestion, air quality and similar elements.

Since 2022 strategic criteria were given greater emphasis  over the economic or financial criteria. Something I suspect the mandarins and some economists did not gleefully accept  but which should give public transport schemes in Wales a better chance than previously.

Network Rail is now responsible for constructing the new railway and where the train company or in future GBR provides sufficient revenue to cover the track access charges and operate within the revenue support resource available.

One hopes HM Treasury’s commitment to these strategic goals is to continue and not return to the paymasters, (currently the DfT for Wales’ rail infrastructure) journey time savings as the key criterion rather than economic growth through tourism or employment income.