Review for HS2

29 August, 2019

HS2 looks like it’s going over budget, so let’s review whether it’s still worthwhile. Really? As if most of our major projects come in on time and budget? And think about it: a review itself means delay, in this case, probably a year or so. And that will certainly add to the costs of HS2 (if it still proceeds).

A review like this is only worthwhile if it examines all sources of cost inflation. Nobody will admit it, but much of this is driven by the need to meet a whole raft of obligations – on consultation and human rights, environmental protection and so on – and to address the barrage of legal challenges raised by objectors. These are the areas hard to price at the outset, not the cost of the civil engineering content.

If I have a beef with HS2 Ltd it’s that over its ten-year development phase, changes to the project’s specification which have obvious adverse cost impacts, changes made to meet concerns over its local impacts, have been accompanied by a nonchalant assertion that the project will remain within budget. But does anyone believe, for instance, that there is no capital cost difference between HS2’s original surface alignment through west London in a disused railway cutting and its ultimate form, entirely in tunnel – a change contrived to meet the concerns of the then Mayor of London (and MP for Uxbridge and South Ruislip) and agreed by HS2 Ltd when the PM’s appointed chair of the HS2 Review was head of the project?

The Review is to have a panel, some of whom are inveterate HS2-sceptics, and many of whom are London-based. Northern perspectives are only covered through Stephen Cridland, chair of TfN; Scotland is ignored. The real natives are not to be trusted. The likely resulting distortion matters. Choices around Old Oak Common station in West London, say, look very different from a London perspective (a development opportunity) as from Manchester/Glasgow (an unnecessary extra train stop).

A lot has changed since HS2 was first developed ten years ago. By far the most important, affecting HS2 and all other transport projects, has arisen in the last few months: Climate Extinction and the UK Government’s commitment to a zero-carbon future by 2050. The whole national policy on transport is due a fundamental shift as a consequence. We simply can’t carry on as before. But for now, it’s just HS2 that’s in the limelight.

In the UK in 2017, transport accounted for 28% of greenhouse gas emissions: while all other sectors have been reducing their impacts, transport’s is growing. Cars, vans and HGVs account for 87% of transport sector greenhouse gases. In truth, we have a Government commitment, but no coherent plan, to phase out conventionally fuelled vehicles by 2040, what with 35 million vehicles on the roads. The adverse environmental impacts of HGVs and aviation are both addressed by HS2.

Electrical power generation decarbonisation has progressed faster than expected. Much more realistic than an electrified car fleet is the prospect of zero-carbon travel by electrified rail, whether high-speed or not.

Panel members, each to be awarded a ‘specific area of interest’, will find no shortage of data and past studies. Some may note that ideas around concessioning the as-built HS2 infrastructure remain in DfT’s in-tray (‘no need to decide just yet’), left for future cash-strapped Treasuries to enjoy – just as happened with HS1 shortly after it was completed. Even in narrow financial terms, the cost of HS2 to the tax-payer will turn out to be much smaller than its capital cost. Creating a saleable national asset in the price-regulated environment that HS2 will enter is a unique, hidden, and un-valued benefit ahead for the Treasury and tax-payers.

Ideas such as ‘build from the north first’ or ‘build Northern Powerhouse Rail instead’ have been floated. With HS2 Phase 1 and 2a in effect on the same timescale, and both with Parliamentary approval, it may well prove possible to build from the north at the same time as in the south. But ditching HS2 after 10 years progress through planning in favour of other solutions such as a new fast Manchester-Leeds line, whatever its merits, inescapably means delaying benefits both nationally and in the north. The Review Panel will not be thanked for improved train services in 2045 rather than 2035.

You wouldn’t think that the current chair of HS2 Ltd has already been thoroughly investigating the issues of cost, timescale and risk allocation for the last year. But the conclusions of the Review, I suspect, will draw heavily on his work. The Review conclusions, incidentally, will be written not by the nominees on what amounts to an advisory panel, who will be ‘consulted on the report’s conclusions’. The Department of Transport, no doubt, will hold the pen.

Jim Steer, Director, Greengauge 21

For Transport Times