More mischief making by ‘Stop HS2’

THE Stop HS2 campaign is well practised in mischief making and spreading misleading assertions about the project.

The latest is a classic — in which they are alleging the Government is being ‘disingenuous’ by understating by some £8 billion the cost of the total ‘Y’ route planned because it does not include the cost of trains.

It started with a ‘debate’ in the columns of ‘Engineering & Technology Magazine’ published by the Institution of Engineering and Technology, between Alison Munro, the chief executive of HS2 Ltd, and Penny Gaines, the chair of Stop HS2, who claimed: “The HS2 tracks are estimated to cost £33bn and a further £8bn for the trains.”

The following week an answer to a Parliamentary Question in the House of Commons gave £8.15bn as the estimated cost of the trains.

The Wolverhampton Express & Star then ran a report that “more than £8 billion will be added to the bill for HS2, as the cost of trains has not been included in widely publicised figures.” It quoted Joe Rukin, Stop HS2’s campaign manager, saying: “It’s been totally disingenuous that the Government have been quoting a £33bn cost for HS2, whilst neglecting to mention that trains are an extra. They have simply been trying to con the taxpayer from start to finish.”

And the Burton Mail, under the headline ‘Group slams HS2 rail costs’, also reported that Joe Rukin had “accused the Government of being ‘disingenuous’.”  Mr Rukin, it reported, claimed the cost of phase two had jumped from £16.4bn to £18.2bn.

But the Department for Transport said it had been “totally clear and transparent about the costs of HS2.”

A spokesman said: “Capital costs for the construction of the vital project are in the order of £16.3 billion for phase one and £16.8 billion for phase two, not including the spur to Heathrow. If the spur is included, phase two would cost in the order of £18.2m.”

She said there was a separate cost for rolling stock.

Rolling stock is paid for by the passenger service operator

And, of course, there is a separate cost for rolling stock — because that will be the responsibility of the operator or operators that run the trains on the network. No one has decided yet whether HS2, in 10 or more years time, will be a franchise, a concession or an open access operation, or a mix of these.

When HS1 was built, its budget (which was not exceeded) did not include the cost of trains.  The international trains that use it today are the responsibility of Eurostar, which pays for them out of the revenue it earns from passengers.

The same situation will apply when DB, German State Railways, begins running trains to London from cities such as Frankfurt, Cologne and Amsterdam. Like Eurostar, it (not HS1) has more trains on order from Siemens.

The domestic services on HS1 are provided by Southeastern, and its ‘Javelin’ trains, built by Hitachi, were financed by the train leasing company HSBC Rail (now Eversholt Rail Group). Southeastern pays the lease charges out of its passenger revenues.

When the West Coast route was going to be upgraded — later downgraded to a modernization project to save money — the Pendolino tilting trains were not included in the cost, either . . . because they were the responsibility of the service provider, Virgin Trains.

And when Virgin chose the Pendolinos for the job, their development and construction costs were not paid for by Virgin but by Angel Trains, another rolling stock leasing company owned by banks, which recoups its costs from Virgin through monthly leasing charges.

Track and trains are dealt with quite separately in the modern railway, partly under European law and more especially in Britain because of the way the railway businesses were split up and privatized 20 years ago.

It’s Stop HS2 that is being disingenuous

If anyone is being ‘disingenuous’ — which my dictionary defines as ‘not candid or sincere, typically by pretending that one knows less about something than one really does’  — it is people like Stop HS2’s Penny Gaines and Joe Rukin.

They continually carp and criticize the project but fail ever to acknowledge that the current estimated cost of £33 billion over the next 20 years is less per year on average than is being spent now on Crossrail and Thameslink in London — about which they make no complaint — and that it will be offset by massive income from passengers and the socio/economic benefits to the economy that will arise from regeneration and job creation.

That is why HS2 Ltd has now adopted the slogan ‘Engine For Growth’ to describe the project.

HS2 Ltd’s chairman Doug Oakervee estimates the benefit/cost ratio of the whole ‘Y’ network will be 2.6, or around £85 billion over 60 years return on an investment of £33 billion.

But Mr Oakervee believes that the 2.6 figure is a ‘very conservative’ one, based on his previous experience of developing the Crossrail scheme, and the realities of booming passenger traffic on HS1’s domestic services, even with premium fares — whereas the HS2 business case assumes fares would continue to be charged on the same basis as now.

There is another reason why Mr Oakervee may well be right that the current business case understates what will really happen.

After all, HS2 Ltd has developed its plans on the assumption that passenger numbers will grow only by about two per cent per annum — whereas the reality is that growth has already been far in excess of that, around five or six per cent per annum . . . and has been now for several years, even during the current economic downturn.

That probably means the forecast that the West Coast Main Line will run out of capacity in the mid 2020s is also totally wrong, and the crunch time is much more likely to be evident by the start of the next decade, just seven years away.

So much the better, then, if the time needed to build HS2 can be reduced.  Last week’s announcement of revised plans to tunnel the route out of London beneath Ealing and Northolt means the construction time can be reduced by 15 months.  And revised plans for Euston station can also reduce construction time

That is really good news, because HS2 is needed sooner rather than later.

10 thoughts on “More mischief making by ‘Stop HS2’

  1. If you bothered to look at the Treasury website, you would find that the costs of rolling stock is not being paid for by any operator (assuming that there would be a private operator in the first place), but would be a mixture of public and private funding.

    What that mixture would be, who knows?

    Obviously as I am not apparently capable of being sincere, don’t take my word for it, take the word of Europe Minister David Liddington MP; http://davidlidington.files.wordpress.com/2013/04/pm-rs.jpg

    Oh and Alan, I won’t accuse you of being disengenuous, but only because you’re clearly not pretending you know less about HS2 than you make out, it’s a simple matter of fact.

  2. Misinformation and selective editing, in order to deceive, thereby influencing publilc sentiment, are now common currency when it comes to HS2 related media articles.

    Cynicism and outright rejection of informed expert opinion is now the default position adopted by a majority of the hardcore anti-HS2 community – see this throwaway remark extracted from a thread on the STOPHS2 website;

    @kingsnewclothes: “Please see my earlier point. I stopped believing anything Network Rail say a long time ago.”

    to which an advocate of HS2 replied;

    @vtiman: “so where are you going to get your information regarding railway and hs2 issues from then – you could try Modern railways or Rail but then i guess you would say you dont trust those either. Or you could look at the latest passenger growth figures. but maybe those are suspect too. Oy maybe you might just believe what some of the papers say – not a very good idea in my opinion but there you go.”

    You only have to watch some of the videos posted on anti-HS2 community sites – the 51M Group provides some classics – to gauge the level of hysteria now pervading the relatively tiny community of visceral HS2 opponents populating the approved Route3 pathway of HS2’s phase 1 – common sense and objectivity evaporated a long time ago – no amount of advocacy, mitigation or plain old compensation will now persuade opponents back to the discussion.

    As the level of desperation ratchets up, with the prospect of hard hats appearing over the horizon drawing ever closer, we can expect to see many more examples of brazen deceit and disingenuous reporting. My guess is the main attack will come during the passage of enabling legislation through Parliament – a Paving Bill and the actual Hybrid Bill will be announced during the next Queen’s speech to Parliament – October 2013 to January 2015.

    Even after the Hybrid Bill receives Royal Assent we won’t have heard the last of opponents – doubtless there will be numerous sob stories published (regurgitated elsewhere) about heartless HS2 officials evicting vulnerable individuals from their property, selectively failing to report the fact that they have recieved generous compensation and been offered alternative housing?

  3. Ah well, at least this has reinforced StopHS2’s green credentials. Up to now, I thought their sole environmental concern was whether they could drive round the Chilterns in their 4x4s without having their pretty view spoilt.

    Now I realise StopHS2 are keen on promoting recycling. This argument about extra costs from rolling stock has been made several times before, so it’s admirable to see them using the same old arguments yet again. I mean, every time they do this they so a wonderful job of passing it off as brand new.

    Can’t wait to see what they recycle next. How about the one about services to Coverntry being cut by 2/3? We haven’t had that for a while. (And yes, I know what’s really planned.)

    • If the question has been raised several times it’s because it hasn’t been answered. OK, so the cost of the trains is separate from the construction cost. And where do the train operating companies get the money to pay for the trains? They get it from fares. But fare income is included in the cost/benefit figures. The cost of the trains is not included. Is someone pulling our leg?

      • The cost of the trains is included. I’d be quite happy to explain how it is included in the calculations, but this article explains it rather well:

        http://gohs2.wordpress.com/2012/03/02/hs2-rolling-stock-costs-overlooked-not-likely/

        Read that, and if you disagree with any bits of it, tell me which bit is wrong and why. But the short version: the cost bit of BCR is construction costs + rolling stock cost + operating cost – fare revenue (all calculated at 2011 present value – that’s an important clarification explained in the article).

        And, notably, this article is more than a year old, in response to – yes, you’ve guessed it – HS2 opponents. The question has been raised, and answered, and I’m afraid most HS2 opponents chose not to listen.

      • When HS2 opens existing Pendolinos trains will provide some of the services using it as a new alternative to WCML and able to travel at their top speed!

        When you build a motorway you don’t include the cost of vehicles that will use it ..!

    • Okay, let’s assume HS2 goes 18% over budget too. That would be great news, because the £33bn (PV) price tag includes an allowance for going 60% over budget.

      If it goes 18% over budget instead of 60%, I make it about £24bn instead of £33bn. Surely even StopHS2 would agree that’s a good thing?

  4. I’m perhaps naive, perhaps just lazy, but if the government, our elected representatives, voted for by us because we trust them to wisely spend the tax that we provide for them to administer, says that there’s a business case, I’m minded to believe them.

    However, noting that HS2’s own website trumpets the estimated £34 billion in fares that will be generated over 60 years (for the operators) it seems reasonable that the cost of the trains (to the operators) should appear on both sides of the equation. Presumably alongside all the other running costs, maintenance, wage bill etc etc.

    Surely?

    • So on your thinking the costs of vehicles that will use a motorway should also be included in the cost of building the motorway?

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