A light rail scheme in South Yorkshire that Network Rail thought it could make savings on has bust its budget by a whopping 400%.

As well as the eye-watering hike in cost, the Sheffield to Rotherham ‘tram-train’ pilot is also running two and a half years late, an investigation by the government’s spending watchdog, the National Audit Office (NAO), has discovered.

The project, where Carillion was appointed to develop the design and deliver the infrastructure works, is now expected to be completed next May.

The pilot aimed to test the viability of operating tram-trains – where trams run on train tracks – in the UK.

A budget of £15m was originally agreed for the scheme in May 2012 by the Department for Transport (DfT) and Network Rail, with an expected completion of December 2015.

The project was formally announced by then rail minister Norman Baker, also in May 2012, when Network Rail was working on the outline design.

Network Rail signed an early engagement contract with Carillion in February 2013 to help design the scheme with the infrastructure owner initially estimating costs of £18.7m and even reckoning efficiency savings were possible. But it now expects the final bill to be £75.1m.

But later that year, Network Rail said the scheme’s cost had risen to £31.8m and in November 2014 said the budget had risen even further – to £44.9m.

Carillion, which has been contacted for comment, began construction work at the beginning of last year. But six months later, Network Rail was forced to admit costs had gone up again, with the new figure of £73.6m being blamed on work being more complex than first anticipated at the design stage.

The following month, in July last year, the DfT’s rail investment board recommended stopping the project as many of the lessons of using tram-trains in the UK had already been learned. But the government pressed on and asked Network Rail to meet the funding shortfall.

The NAO report said: “The DfT and Network Rail have learned lessons from the pilot but it is too early to determine whether the project will realise the wider strategic benefits. The Department has not yet evaluated the value for money of the pilot project or the extent to which it will reduce the costs of introducing similar schemes in other cities.”