Rail 829: Is any price acceptable for HS2?

Everything has its price. Even those who think HS2 is a good idea must consider there is a point at which its cost makes the project unsustainable. Or do they?

I only ask because Lord Berkeley, the chairman of the Railfreight Group and a long time supporter of the railways has, for some time, being trying to find out the latest estimate of the cost of the line. He is by no means an opponent of the scheme – quite the opposite – though he has questioned the nature of the proposals for Euston which, in their latest incarnation, seem to require a 20 year period of work in the area, something that is clearly unacceptable for local residents as well as being inordinately costly. He has been pressing, in various meetings with HS2 and Department for Transport officials, to obtain an estimate of the cost of the scheme. The last official estimate published 18 months ago was that the first phase to Birmingham would cost £23.5 billion (now £24.3billion to take account of inflation since then) and there has been no release of any more detailed costings since then.

I have been spurred on to write about this project, having left the subject alone for a long time, because the noises from HS2 supporters seem to be becoming louder as well as increasingly incoherent. Indeed, according to a rival magazine, I am the Lord Haw Haw of transport economics for merely questioning the value of the HS2 project. That is what Ian Walmsley, a former engineering project manager for Porterbrook, the rolling stock leasing company, called me in an article suggesting that I was a hypocrite for opposing HS2 while claiming to support the railway industry. William Joyce, the real Lord Haw Haw (who was not a lord) was a Nazi sympathiser who blatantly lied about the conduct and progress of the war in broadcasts to the UK and was eventually hanged for treason. I think, therefore, the comparison may be just a tad over the top but I leave that to Walmsley’s conscience.

However, this use of intemperate language rather than reasoned debate is quite characteristic of some of HS2’s supporters. Perhaps subconsciously his ludicrous comparison with Lord Haw Haw betrays the fact that, like many of the more Messianic HS2 supporters, he considers it is a matter of treason to question the arguments for the project. It is, according to Believers like Walmsley, wrong even to doubt any aspects of the project or highlight its potential pitfalls

I am, however, not a man of faith, but one of science. As Berkeley and numerous other experienced railway people – including many in Railfuture of which I am honorary president – argue, there are legitimate questions to ask about the project whether one supports the scheme or not. The most basic, of course, is the cost.

Berkeley, in pressing for a better solution to the Euston terminus than the current 20 year nightmare, managed to obtain the current estimate which £8.25bn for the station and the first six miles of line to Old Oak Common. As Berkeley pointed out in a debate in the Lords in January, that leaves just some £16bn for the remaining 200 kilometres. That is highly improbable. As Berkeley puts it, ‘having spent £1bn on consultancy, it is remarkable that HS2 still don’t have a price for the line.’

Lord Bradshaw, who could hardly be likened to Lord Haw Haw, as he is a long time and very knowledgeable supporter of the railway also argued that ‘The scheme as envisaged is extravagant, and this is not a time when we can afford extravagance. There is a good case for having an independent assessment of the costs.’

The reluctance of HS2 Ltd to produce an estimate is, of course, deliberate. If a new estimate were produced, the whole business case would have to be revisited.  So the good lord enlisted the help of Michael Byng, who has written a manual on how to price projects which has been accepted by Network Rail as the best available. He has made detailed calculations, which I have seen, and initially came up with the figures of £53.6m for the whole scheme up to the West Midlands (known officially as Phase One). This is approximately the supposed cost of the whole Y but Byng, trying to be fair and professional has, after further conversations with HS2, reduced his estimate to £48bn, still double the current official cost.

One of the reasons for Byng’s higher cost is the need for slab track which, he says, is likely to be required for much of the route, something which an HS2 adviser ‘let slip’ to him. Byng, who has given evidence on HS2 to the Commons Transport Committee, told me that ‘a very senior and distinguished quantity surveyor, a partner in one the world’s largest practices, admitted in a meeting last year with the Camden petitioner, at which I was present, “that HS2 had no comprehensive structured estimate for the project”’. That certainly rings true. Even now, Byng says that none of his estimates have been questioned by HS2 Ltd, nor has it provided any further evidence that its costs could fit in with the government’s current budget.

Byng would like to see a delay to the scheme while the costs are properly estimated. Of course, his estimate drives a cart and horse through the business case which has always been tenuous anyway. Essentially the benefit to cost ratio for the scheme, using the admittedly flawed methodology that the government insists on, is 1.7 to 1, which is not very impressive for such a huge project. If Byng’s estimate is correct, the figure would go below 1 to 1, which raises fundamental questions about the plan.

If any supporters are naive enough to think that HS2 is a done deal, think again, especially given the DUP deal which is sucking £1bn out of other departments’ budgets and the coalition arrangement have meant the effective scrapping of the austerity programme which will mean more spending on housing, welfare, education and care of the elderly.

The question I would like to pose to supporters of the scheme: if this is a true estimate, and the cost of the whole project is likely to be around £100bn, would it still be worthwhile? Byng of course may be wrong and too pessimistic, but that is not the point. As I asked at the beginning, is there a stage at which the whole idea just becomes unviable and unrealistic? When the expected cost is £70bn? £90bn? £100bn – or precisely when?

 

 

Alas poor Breich

 

One of the odd consequences of privatisation of the railway is that it has become almost impossible to close any lines or stations. That is partly, of course, because use of the railways has boomed in the past two decades and therefore there are probably few parts of the network that are candidates for the chop.

However bravely, Network Rail in Scotland has found one. This is Breich station on the Shotts line between Edinburgh and Glasgow about whose closure it is now consulting. The station is not best used. According to the statistics produced by the Office of Road and Rail, it had 138 users in the past year (up from 102 the previous year), which fortuitously equated to 69 entries and 69 exits suggesting it may be the same person coming and going! That is 2.6 users per week for the single eastbound and westbound services that call every weekday. In other words, only around one in four of these services are used by anyone getting on or off.

These passengers – or passenger – are subsidised to the tune of £95 per journey because of the costs incurred by the operators stopping at the station and the need for its maintenance.  Moreover, the planned electrification of the line will be more expensive because of extra safety requirements at stations, incurring additional costs of some £1.6m

Now perhaps this is an example of Beeching style economics which does not take account of the station’s value to the local community. However, I doubt it. The station is a little way from the village which is on a main road and consists mainly of a single row of houses, though there is a pub and a snack bar. There is no parking and pictures of the station suggest waiting for the train would not be an entirely pleasant experience.

The mystery remains why this closure has not been thought of previously. There must, too, be numerous other candidates for consideration but the problem may well be the complex process required. The closure seems only to have been stimulated by the need to save money on the forthcoming electrification. In order to bring it about, Network Rail has had to produce a 20 page consultation document and a 32 page consultation document, as well as various other bits and pieces. No wonder why such closure plans are as almost as rare as England victories at the World Cup. Imagine if Beeching would have had to do that for every one of the 2,500 stations and 6,000 miles of line he closed.

 

 

  • B.Mansour

    Good and legitimate questions, you could also ask when is much too much? and who decides?. The challenge is more about dogma, commercial interests and political grandstanding as oppose to engineering. Regrettably, engineering in the UK is not a valued profession; not many are listened to.

    High speed rail should be built to complement and strengthen the national railways; not undermine it through running parallel systems and avoidance of engaging with the national railway. Look what happened to the likes of SRA and Railtrack and how these entities disregarded public interest because they thought they new better. I fear HS2 may be the sequel of these defunct and failed organisations that had negatively impacted on the UK rail industry and left it badly wounded and confused. Someone in Whitehall must know what he/she is doing, as the case may be.
    High speed require slabtrack in many areas together with noise barriers, land take, cost of the Rolling Stock and compatible signalling system, we should also bear in mind the impact of Brexit on the overall specifications that requires compliance with European standards.
    Like many international HSR projects, if significant funding sources are provided by overseas investors with their syndicated groups then they would demand participation in the construction and entitlement for the award of contracts at the expense of competition.

  • Paul Holt

    Paragraph 3 contains “… I am the Lord Haw Haw of transport economics for merely questioning the value of the HS2 project…”. Others also question the value, like this Telegraph columnist: http://www.telegraph.co.uk/news/2017/07/22/saddle-children-ideas-past-like-hs2-debts-today-vision-future/

  • Keith

    It would be interesting to know the cost of a conventional mixed-traffic line to the Midlands, which would seem much more useful.

    Is the Euston plan a done deal? UCL are already vacating Wolfson House (Stephenson Way, next to the station), I wonder who’s paying for that?

  • No, there’s still discussion over Euston

Shares