Rail 899: HS2 arguments are fundamentally dishonest

One day there will be a superb book to be written about the shenanigans over the decision whether to build HS2 or not. Ever weekend there were predictions that this would at last be the week when puffs of white smoke would emerge from the roof of Downing Street to announce the fate of the controversial project. But no, instead we got endless partial leaks of what was in the Oakervee report or, rather, what it was going to say until the civil servants got their mucky paws all over it.

Now, finally, we have a result. Sort of. I say that because there are clearly a lot of known unknowns. Moreover, there was no written statement, only the usual bit of flim-flammery from Boris Johnson, which contained a few nuggets of information no one can accuse him of being a details man so a lot has been left unclear.

So, first, what are the known knowns from the statement made on Feb 11? Well, the Birmingham section is going ahead as is 2a, the western arm that takes the route to Crewe, there is going to be some sort of amalgamated agency to run 2b together with the Northern Powerhouse, a new HS2 minister who will bear down on costs and there will be a different delivery method for Euston station. In addition, there is going to be £5bn for improving bus services and creating cycle routes.

Within the context that I still think this project is the wrong one, some of this is definitely good news. Having a minister in direct charge of the project is a belated necessity and melding in HS2 with Northern Powerhouse is a good way of trying to get a better outcome, though the timescale of this section is so far ahead that 2b may, despite Johnson’s joke alluding to Hamlet, be not to be. Sorting Euston out is obviously a priority, particularly the weekend before the announcement, there was an article in the Financial Times saying that the station project was in chaos with very little progress and quoting Tony Travers, an academic who is famously balanced in his assessments, as saying that he had been surprised by the ‘relaxed manner’ in which HS2 Ltd seemed to have approached planning for Euston, particularly given that it has huge development potential.

Let me just dismiss the ridiculous announcement about £5bn for buses and bikes, half of which was rehashed old money and in any case is due to be spent over five years, so is insignificant in terms of the overall transport budget. As Jeremy Corbyn, who while being supportive of HS2 (despite being an avid reader of this column) pointed out in his rebuttal, the government has cut back annual spending on buses by £645m since 2010 which has resulted in the closure of 3,300 routes. Moreover, the 250 miles of cycle route is insignificant in the scheme of things – Paris alone is adding 400 miles in the next decade. This was the most nakedly opportunistic part of the statement but of course was lapped up my most of the mainstream and social media.

So that is what we know, but the gaps in our knowledge are far greater. Johnson admitted: ‘As everybody knows, the cost forecasts have exploded, but poor management to date has not detracted from the fundamental value of the project’ but was unable to say how the issue of costs can be addressed. He would do worse than reading Nigel Harris’s explanation in the last issue of the complexity of the contracts which try to pass on far too much risk, at great expense, to the private sector. I would add to that the fact that project management has been outsourced which inevitably results in the management team having insufficient information to make informed decisions.

Without a ministerial statement, we are left with the Oakervee report to find the justification for the decision to proceed with first two parts of HS2. However, it is quite possible to read it and, as one of the best informed opponents put it to me, and find ‘lots of justifications to scrap it’. Reading it, one is left astonished at the lack of detail that has gone into the project, despite the fact that it has been developed for a decade and some £8bn has been spent.  There is a message that screams at you throughout the Oakervee report and the rather off hand statement from Boris Johnson with its Shakesperean jokes and alliterations. That is: there is no government strategy designed either to make the railway system better for as many people as possible, nor to address the most pressing issue facing us, climate change.

For example, one of the weirdest statements in the Oakervee report is that there are apparently no ‘shovel-ready’ schemes to improve the capacity of the railways and it would takes years of planning and preparation to bring them to fruition. First, there are undoubtedly many schemes that have been worked up over the years which could easily be brought forward. However, the fact that there are not enough of these or that Oakervee was unable to put his hands on any, demonstrates the lack of strategy. Secondly, if there is a will, there is a way. Network Rail’s so aptly named GRIP process to assess schemes is well overdue for a total overhaul and ways need to be found to speed up projects. Indeed, the requirement that Network Rail insists on putting third party schemes that have been drawn up by outside agencies through the GRIP process should be ended forthwith. And thirdly, euh, HS2 is not exactly shovel ready since it is highly unlikely that passengers will be able to use any of it before 2030 at the earliest, and possibly 2040 on the eastern section.

The Oakervee is surprisingly full of statements about the need for more information and research. For example, he suggests further work is needed ‘to explore in more detail [how] to design the best services for passengers – and freight – across both HS2 and the conventional rail network, as part of an integrated plan for the GB rail network’. Or,’there is no overarching strategy and analysis to optimise the allocation of released capacity on the basis of the project’s objectives. Given that this is a core rationale for the HS2 scheme, much more work needs to be done jointly between HS2 Ltd, the DfT, Network Rail and the Shadow Operator in an integrated GB rail plan to maximise these benefits and articulate them clearly.’ In other words, no one seems to have thought of what the post HS2 railway might look like – and yet we are spending upwards of £100bn (a figure, by the way, that Grant Shapps seemed to accept in interviews that day) on this project.

There was much more in a similar vein but the most important aspect of the Oakervee report, which was missed by the media, was he said that the go-ahead was contingent on three provisos. First, HS2 Ltd has to sort out the contracts with the main civils companies and, failing this, has to renegotiate them. Secondly, the Treasury has to provide a new funding envelope and thirdly there has to be a revised business case that fits in with it. None of this is simple.  However, there is no evidence that any of these will be fulfilled by government, certainly not as key preconditions before the all important ‘notice to proceed’ is issued.

As even Johnson himself recognised, projected costs have soared. Whether the ultimate bill is £85bn or £100bn or even more is in a way irrelevant. The cost is far greater than originally budgeted and therefore the business case is far weaker. That is why I doubt that the third condition, in particular, will ever be met. What would happen if, as expected, the Benefit Cost ratio comes out at well under one, when Treasury rules say that only projects with at least a ratio of 1.5 and preferably 2 should go ahead?

Oakervee has merely confirmed my main reason for opposing the scheme: it has no environmental case. He concludes : ‘On balance, taking into account both the construction and operation of HS2, it appears that HS2 is likely to be close to carbon neutral, though it is not clear whether overall HS2 is positive or negative for greenhouse gas emissions’. Even in the long term, there is little evidence that the scheme will deliver any reduction in emissions – and remember this is at the cost of considerable local environmental damage. That, in a world where climate change is at last being recognised as the world’s most pressing problem and is soaring up the political agenda, is a killer for me and remains so. It is the project’s Achilles Heel and it is an issue that the scheme’s supporters will not engage with. They should.

 

 

 

The case for trams

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Much that as Chancellor, Alistair Darling probably saved the British economy from collapse after the 2008 financial crisis, as transport secretary he was shortsighted and unnecessarily parsimonious. After John Prescott in 2000 put forward the idea of bringing in twenty tram schemes, Darling proceeded to knock them on the head one by one. Just as closing tramways was one of the worst postwar decisions by government, Darling’s failure to recognise their value was one of the big mistakes of the New Labour era.

Therefore it was heartening that I was asked to speak at a conference in Bath where local people are pressing for the reintroduction of a tram network, closed down more than half a century ago. There were more than a hundred people at the event which had a series of excellent speakers. Most notably Andrew Braddock, a former chairman of the Light Rail Transit Association whose presentation about the 28 light rail systems that have opened in France in the past 40 years shows just how far behind we are with our half a dozen networks and no clear plans for any major new ones. While it was heartening to see how these systems had changed so many French towns and cities for the better, it was deeply depressing to realise what a missed opportunity the failure of dear old Prescott’s intervention had been.

 

 

 

 

 

 

 

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