I have been taken to task by various readers for my piece on high speed rail two issues ago which raised a number of questions about the project. In order to learn more about the government’s plans and to respond to their criticisms, I went along to the offices of HS2, the government’s specially created company, to find out precisely what it is doing.
It is clear that the sheer scale of their task is daunting and replete with ironies. The offices are at 55 Victoria Street, home of the defunct Strategic Rail Authority, headed by Richard Bowker who pressed the case for a high speed line without ever managing to get it on the government’s agenda. Moreover, the HS2 team is led by David Rowlands, a career civil servant who was the Permanent Secretary at the Department for Transport at the time the government published its rail strategy nearly two years ago which debunked the idea of a high speed line or, indeed, pretty much any strategic investment programme in the railways such as electrification.
Yet, now he heads the team of 24 people which is charged with producing a report by the end of the year on the options for a high speed line linking London with the West Midlands. The precise brief is to provide the government with a detailed assessment of the business case, with route options, and examining the social, economic and environmental aspects of the project. It will then be up to the government to publish the report and respond.
But, of course, that is only the start of an incredibly long process. With 2-3 years for both the planning and legislative processes, the very earliest that the first sod would be turned is 2017 and even that looks optimistic. With probably a five year build period, we are looking very far into the future before anyone steps on a British domestic high speed train other than on HS1.
The British planning system throws up new obstacles at every turn. The HS2 team is caught in a Catch 22 bind that makes their job almost impossible. Following a legal case over the plans for the high speed rail link to the Channel Tunnel, the ombudsman decided that people whose homes were blighted by proposed routes should be compensated even if eventually they were not so close to the line as to be entitled to statutory payments. That means the report will not be able to provide a route that is sufficiently detailed to be precisely identified, although, of course, those with a good knowledge of local areas should be able to guess what the ideal line of track will be.
There is no shortage of options. There are half a dozen suggested routes, with huge differences about connections with Heathrow and the siting of terminals, and the team is having to sift through the various suggestions, as well as considering others as they are ‘starting with a blank piece of paper’.
At the Rail conference, Andrew Adonis was very bullish about the scheme, suggesting it was not a matter of if a high speed line is built, but when. He is, therefore, pre-empting the report since he has no idea of the business case for the line, and that was why I raised the questions about various uncertainties. And, in a way, he is departing from the British way of doing things and in that, he found a backer on my website, Michael Weinberg, who, in response to my piece, argued that the detailed questions I asked about the cost and impact of a high speed line ‘are precisely the reason why nothing ever gets done in this country’.
Lord Adonis is trying to break the mould here, arguing that the line should be built pretty much irrespective of what the HS2 report comes up with, making my questions irrelevant. In a way, I admire that. In researching the books I have written about the construction of both the London Underground and the British rail network, I developed a huge admiration for the Victorian entrepreneurs who simply identified a need, raised some capital, often on pretty dubious grounds, and built their schemes. It is that spirit which he is seeking to recapture.
So part of me would like to throw my lot in with the visionaries and support their idea, whatever they come up with it. Would I, for example, have opposed the construction of the Great Northern line in the 1850s between Kings Cross and York on the basis that there was already an existing line, albeit along a rather tortuous route? I hope not.
But this is 2009, when there are huge issues about mobility, the environment, the sustainability of economic growth and the state of the economy which make it essential not just to have a dream as Lord Adonis and reader Michael Weinberg would like, but to ensure that a high speed line would, as its supporters say, be good for Britain, the economy, the environment and, indeed, the railway system.
Let me give one example, about opportunity cost. I have been chastised by another reader,
Bruce Howard, who agrees that many of the points I make are valid but then suggests that the alternative would be a new freight rail route. It is a proposal with which I have a lot of sympathy, though one which has not really been treated seriously after the debacle over the Central Railway scheme which collapsed after being overwhelmingly rejected by Parliament. A new version of the project, the EuroRail Freight Group line from Glasgow through to the mouth of the tunnel, has long been promoted by the MP for Luton North, Kelvin Hopkins, and has the support of various organisations, but as the idea is far less sexy and media-friendly than a passenger line but at, the suggested estimate of £6bn, possibly a fifth of a high speed line to Scotland, may be the right answer to providing the extra capacity. Clearly the two schemes are alternatives, as both could not be built, and the idea of a freight railway should be put into the mix when a final decision is made, but I doubt it will be given proper consideration.
The HS2 report will be a fascinating document which will take in issues far beyond the immediate concern of whether the line should be built or not. Producing a coherent piece of work which will also examine demand for long distance travel, and basic engineering requirements by the end of the year will be an almost heroic task. Every detail will be pored over by both supporters and opponents for years to come. Let’s hope Mr Rowlands and his team are up to the task.
Who pays for investment?
And another piece I wrote has been challenged. The point I made in Rail 613 about the investment by Chiltern Railways’ being essentially funded by subsidy has been picked up by Graham Cross, the business development director of Chiltern Railways who argues that this is not the case. In a detailed response Mr Cross points out that while some of the investment by Chiltern such as platform extensions at nine stations, improvements to the signalling and a turnback facility at Kidderminster have been supported by subsidy, others such as half the extra 3,000 car parking spaces, the new station at Warwick Parkway and new platforms at two other stations have not.
This is a difficult issue. When the franchise agreement was signed in 2002, Chiltern agreed to a number of investment schemes which were said to be worth £370m. The issue is clouded by the fact that Chiltern has been receiving public subsidy until now. Its investment were taken into account when the subsidy levels were set in 2002 and without them Chiltern would have been expected to receive less – or indeed pay more now that it has reached the point of premium payments.
However, Mr Cross points out that the company has done more than that as a result of having a 20 year franchise and has further plans in the pipeline such as speeding up trains to Birmingham and running services to Oxford. Indeed, according to the boss of Chiltern, Adrian Shooter, in the first five years the company invested four times the expected £16m because a number of schemes were found to be commercially viable. The company says that some of these schemes will be loss making in early years but provided it can consider the long term, then it is prepared to invest. However, that is contingent on the Department for Transport confirming that the franchise will, indeed, last until 2022.
While I accept that this does not represent an extra subsidy it is a material benefit because the fact that rail growth has been much greater than expected over the past seven years means that, effectively, Chiltern is getting in extra revenue and can therefore afford to invest. As I said, it is a complex issue.
I do agree with Mr Cross that long term franchises such as Chiltern’s 20 year deal are a much better arrangement if the government is seeking to encourage operators to invest. Indeed, as he puts it, there are other advantages: ‘Operators who are granted long term stewardship of their routes will naturally build strong relationships in their localities, and develop a very clear understanding of their operations and markets [giving them] the temporal space to think freely about investment and improvement, without the threat of imminent franchise end/bidding competitions to distract the focus of management’. Certainly, Chiltern, as I said in my original piece, is able to have a much more strategic view on investment than other franchisees and does more to answer the Wolmar question on the purpose of franchising than any other franchise.