Selling HS2: delivering a return on Government’s investment

26 July, 2011

This PwC report for Greengauge 21 sets out the first analysis of what the Government could expect to see as a financial return if it sells the infrastructure of High Speed 2 (HS2), in the same way as a 30-year concession was recently sold for HS1. PwC’s figures show it could produce between £6bn and £7bn as a return on the £13.9bn investment.

HS2 is unusual in that it is a transport project that generates very large cash receipts as well as other transport and regeneration benefits that will improve the productivity of the economy right across the regions, and especially in the Midlands and the North.

There are potentially further cash returns over the lifetime of the project. The Exchequer will receive, over time, estimated extra tax receipts on the profits earned by the infrastructure concession holder and rail operating franchises worth £1.5-2bn and, at the end of the initial concession period, HS2 could be sold again, generating a further £1-2bn return to the taxpayer.

Download the report here