Rail 850: When will they come clean on HS2 costs?

In writing my book on the story of Crossrail, my interviews with senior managers as well as the planners who worked on the earlier version of the scheme have offered a lot of lessons for HS2 but I have concerns that they will not be learnt.

Not much has been heard about Crossrail over the past year or so and that is something which does not disappoint its managers. No news on big projects is basically good news. Inside the headquarters in Canary Wharf, there is confidence that the tunnels under London will open on time in December and that the whole line will be operating fully by December 2019, having been completed on its budget of £14.8bn (well sort of, as expect a few extra bills for various bits and pieces).

Of course, there is still time for mishaps but there is no doubt that the achievements so far have been impressive. The 42kms of tunnel under London were completed on time, despite, almost inevitably, some unexpected ground conditions causing the planned schedule for the tunnel boring machines to be changed. A transformer which blew up when the system went live in the autumn caused delay and there are possible problems with the signalling in the Heathrow tunnels but the way that such a massive project has been managed is undoubtedly impressive.

One of the keys to this has been the idea of ensuring that all the staff form a single team even though they work for a vast array of different companies. As Terry Morgan, the chairman told me, ‘I have no idea how many of these people are actually employed by. But to me they all work for Crossrail and that is what is important’. There is, too, a strong contingent working directly for Crossrail, people who have been with the project right from the beginning of construction eight years ago.

This is in sharp contrast with HS2 where, I gather, there are numerous contractors and consultants but very little co-ordination. Worse, there is no concept of creating a single organisation to run the project. The senior Crossrail team spent its first year creating an organisation that they felt had sufficient authority and capability to manage the huge contracts that they were letting. They call this the ‘enterprise system’ which is, in effect, a coherent business with a clear plan of how to see what this enormous project to fruition. That was created right at the beginning and without it there would have been muddle and overspending. Yet,. my inside sources in HS2 suggest that this has not happened yet, even though upwards of £1bn has been spent. Crossrail did go through a couple of chief executives early on but Andrew Wolstenhome the present CEO has been in charge since 2011 and the chairman, Terry Morgan, has been in post since 2009. I see no signs of such stability at HS2 where there have been three chief executives in the space of four years and where the reputation of the organisation was sullied by a scandal about excessive redundancy payments which seemed to have been agreed at the highest level.

The lack of financial discipline at HS2 is reflected in the government’s failure to come clean over the true costs of the project. This really is a scandal but one of the underlying problems with HS2 is that no major political party opposes it. Therefore it is left to a few stalwarts and recidivists to question what is going on. One of those is Lord Berkeley, until recently the chair of the Rail Freight Group, who despite being broadly supportive of the concept, has grave doubts about its cost and, in particular, about its plans for Euston.

I wrote about this in Rail 829 when I expressed surprise that, as Lord Berkeley pointed out at the time, the last detailed estimate of the line up to Birmingham was 18 months old. Yet, a further 10 months on, there is still no update and now the good Lord is on the warpath again. He has written to the transport secretary Chris Grayling pointing out that HS2 has not challenged the much higher figure calculated by Michael Byng, an expert at assessing projects, using the very methodology which Network Rail has developed. Answer there has been none, with HS2 merely producing a single sheet of paper in response to a range of very detailed analysis from Byng.

In the letter, Lord Berkeley points out there have been a series of changes in scope which must have increased the cost of the project. He lists several such as extra work required on the motorways around Birmingham, a bigger footprint for work needed at Euston and ‘major engineering structure west of the proposed Old Oak Common to facilitate trains to crossover’. All these have been accepted as changes by HS2 and yet there has been no change to the estimate of £24bn.

Lord Berkeley has already previously pointed out that a third of this will be taken up by Euston and therefore it seems unrealistic that all the rest of the line can be built for £16bn. Indeed, Byng’s original estimate was that Phase one of the scheme which is to Birmingham would cost precisely double – £48bn. Now Byng has done a calculation of the potential

This, by the way, is not back of a fag packet stuff. Quite the opposite. Byng and Berkeley have created a massive document on the estimated costs of the scheme stretching to 4,500 pages and in his laid Lord Berkeley pleads with his tongue somewhat in his cheek with Grayling that ‘this detailed elemental estimate of approximately 4,500 pages is offered to you but owing to its size, please could I be contacted about arrangements for getting this large package to you safely’. And one hopes that HS2 can stretch to the postage, too…

This is part of a wider issue around HS2, the fact that the organisation does not really want to engage with the public except to fend off any criticism. It is still far too bound up with government, and therefore its dealings with the public are very much, as the French say, de haut en bas. Again, there are lessons from Crossrail. Its stakeholder engagement, to use the modern term, has pretty much been exemplary as witnessed by the lack of bad publicity. Wolstenhome, who left the company at Easter, job done, is particularly pleased that ‘there has not been a single legal challenge to what we’ve done, despite the challenging nature of the task in areas such as central London’. HS2, by contrast, seems always to send out very junior staff, ill-equipped to answer questions, when it is trying to allay opposition to the scheme.

Lord Berkeley’s efforts need to be backed by other politicians. This is a project that is by far the biggest in Europe and which has enormous implications for the future of the railways and, indeed, of the whole transport system. Yet, it being accorded barely any scrutiny because of the political alliance supporting it. Even its supporters should, surely, be asking questions about its cost. Anyone out there?

 

 

 

Thameslink, not on TFL map

 

Crossrail will, of course, be proudly displayed on the London Underground map when it opens, adding a rather pleasant deep mauve colour to the existing array. Not so, it seems, however, for Thameslink. This is of course a National Rail rather than a TfL project but just as with Crossrail, it will act as a way of relieving sections of the tube. In particular, the key section running from St Pancras, Farringdon, City Thameslink and Blackfriars will be run at metro type frequencies of, eventually, 24 trains per hour. With the expansion in the number of stations it serves, Thameslink will also enable a wide range of journeys to be made on its trains, which currently might at the moment best be made partly by Tube.

Yet, as my colleague Barry Doe has pointed out (Rail 835), TfL has so far adamantly refused to put even part of the Thameslink line on the London Underground map. TfL argues that this is because it does not own the services but this is pure cant. The real reason is that cash-strapped TfL could lose revenue to Thameslink’s privatised operator if people use it instead of the Underground. As Barry said, in the past Thameslink has been on the map and, indeed, the north London line was shown long before it actually became part of London Overground, so that excuse does not wash.

This is just the sort of daft decision which discredits the railway system, a crazy barrier to integrated travel. It is time that the Rail Delivery Group put pressure on TfL to ensure that when Crossrail comes into service, the relevant Thameslink services and connections are also put on the map.

 

 

 

 

  • Paul Holt

    p9: “…Now Byng has done a calculation of the potential”. Is something missing?

  • Mark

    Good article!

    1) HS2 is a highly politicised, badly organised project, with a notably weak and complex structure – and dare I say it, a poorly thought out central concept.

    What is the point of cutting 30 mins or whatever from a journey, if you take that time or more to get from the city centre to a remote HS2 station? I would expect spiraling costs, leading to substantial pruning of the scheme as the next recession hits.

    Just as an aside, it’s interesting to reflect that the London and Birmingham Railway went from parliamentary approval to first trains in about 8 yrs, despite the whole thing having to be built with hand tools! Where are we with HS2? 10 or 11 years in and counting, without a yard of track laid.

    2) Re TfL, this is a classic case of that old British favourite Railway Politics.

    For younger readers, this is a fun game for more than two players (since privatisation the upper limit was scrapped) whereby railway empire-builders play silly games to strengthen their own position with respect to other players.

    Any move is allowed, providing it +only+ damages the rail industry. When this game is played with busy routes, the result is overcrowding, high costs and general chaos. When the game is played with quieter routes, the result is usually closure.

  • Mark

    This letter sent to Aberdeen residents by mistake is probably about par for the HS2 course:

    https://www.pressandjournal.co.uk/fp/news/aberdeen/1467002/bemused-aberdeen-residents-receive-letters-about-rail-works-500-miles-away/

    I also hear they have around 17 PR agencies working for them.

    Nice work if you can get it.

  • Chris Cooke

    Completely agree, as a railway fan-in-principle, this shambolic and corrupt project is completely depressing. The journey times and environmental benefits from eliminating domestic air travel would only occur from a true national (to Scotland) scheme, already abandoned.

  • keith

    And why are West Midlands politicians in favour? It will ironically add to pressure on New Street, as passengers from the surrounding area have to exit the station to get to Curzon Street. Or if they don’t bother doing that, the HS2 trains will be even more empty. Has any of this been properly thought about?

  • Paul Holt
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