WHERE IS HS2’S CHAMPION NOW?

A WEEK AGO HS2 Ltd and the Government were full of the news that former London Olympics boss Lord Deighton had been appointed to “ensure HS2 strikes gold for GB growth.”  He is leading a taskforce “to maximise the economic benefits – including job creation – generated by the crucial scheme,” said the Department for Transport.

Since then the high speed rail project has been under growing attack, resulting today in major criticism by Lord Peter Mandelson, after a huge £14.6 billion contingency fund was added to the budget, as well as £7.5 billion for rolling stock that in the past would have been financed by a train operator – that is, until the DfT has got involved controversially in rolling stock procurement for the Intercity Express and Thameslink projects.

But as the criticism has mounted, what has HS2’s new champion – who is also Commercial Secretary to the Treasury – been doing to talk up the project?

Well, apparently, not much at all.  As far as I can judge Lord Deighton’s only public pronouncement this week has been a speech to the Government Construction Summit in which, according to the Treasury, ‘he assured industry representatives that infrastructure is a top priority for the government’.

Not a word seemed to be uttered – nor any reference included in the Treasury’s press release – to HS2, even though the Greengauge21 pressure group had just unveiled its estimate that the scheme will create an estimated 890,000 job years. In the first third-party assessment of the direct employment implications of the HS2 project, this number includes those who would be employed directly by HS2 Ltd, by its contractors and their supply chains. Employment on design and construction would be maintained at least at 20,000 full time jobs a year over a 13 year period, increasing up to a maximum of 50,000 jobs at any one time.

“This shows the direct value of the project to the British labour market,” said Greengauge 21 director Jim Steer. “These numbers should not be confused with other employment effects, for instance, from regeneration impacts around HS2 stations, which are not included in this assessment.”

As I have written in my ‘Long View’ column in this month’s print edition of Railnews (distributed today) the Transport Department and HS2 Ltd have never been noted for clarity in explaining the project.  But the failure to explain the benefits of the project in the light of mounting criticisms is simply deplorable – especially at a time when a committee of MPs is considering in detail the Bill that is intended to unlock key funds for the next stage of development.

As seems to happen all too often with the HS2 project, the critics are capturing all the headlines – even though last week only 37 MPs (or less than six per cent of the total of 650 in the House of Commons!) voted against the scheme when the Paving Bill had its second reading.

Infrastructure is more than just about the figures, broadcaster says

The other day I came across an item on the web site of the Chartered Institution of Highways & Transportation about a lecture given by broadcaster and economist Evan Davis. In this he said supporters of HS2 should build a broader argument for the project and stop focusing on cost/benefit analyses (BCRs – benefit cost ratios).

Much BCR calculation is based on shaky arguments about whether or not people work on trains, and the value (or otherwise) of their time, with arguments that the availability of hand-held devices and laptop computers now means everyone can get work done (although how a plumber or decorator, for example, can do this I do not know).

Yet the ability to work with digital devices, which is impossible when driving a car, is one of the reasons driving up passenger demand, which is rising much faster than HS2 estimates have been based on, and the growth is widely expected to continue.  So the ability to work (rather than the inability to work) on trains may well have an impact on BCR calculations – positively.

Nor is there any evidence that people are calling out for slower train services so that they can get their work done!  Faster services, including with wi-fi, clearly attract greater numbers of passengers, as Virgin’s West Coast services have shown since 2009.

“We need less financial precision and more convincing stories when making a case for the project,” said Evan Davis. “Too much weight is placed on precise figures and Government is now hoist on its own petard as the figures don’t stack up.   “We need to look at what has happened in other countries with high speed rail and build a broader argument for its development.”

Mr Davis asked his audience to imagine that a high speed rail line delivers £100 of benefit to one million people and one million pounds of disbenefit to 100 people. “There is no doubt that the people losing a million pounds would get a disproportionate amount of airtime,” he said – which is exactly what has been happening, as I tried to point to in my previous blog ‘HS2’s uphill media battle’.

Nor should we lose sight that many of our original railways cost far more than their original estimates. But how would our economy have developed without them? A very good example is the original London & Birmingham Railway, the increasingly overburdened line that phase one of HS2 is intended to give some relief to.

The L&BR was completed 175 years ago, with its official opening finally taking place on 17 September 1838 after lengthy delays in constructing Kilsby Tunnel. But, as L T C Rolt explains in his biography of George and Robert Stephenson, “the directors of the railway company were not so happy”.

The original estimate for construction of the line from Euston to Birmingham had been £2.4 million – but the actual cost ended up at £5.5 billion, a massive overspend of 129 per cent.

But what benefits has the line (now, south of Rugby, Europe’s busiest mixed traffic railway route) conferred on the British nation in the past 175 years?  I suggest that after all this time the BCR would be incalculable – and a well-constructed HS2 is likely to be able to serve the national economy for centuries to come, too.

Evan Davis is right – and much more attention needs to be paid to the wider benefits that the new line will bring . . . especially the fact that there would be little difference in cost between a high speed line and a conventional one. But a conventional line, for example, would require far more rolling stock to maintain the necessary frequency and capacity.

Don’t forget that when Virgin planned to run its Pendolinos at 225km/h (140mph) a 15-minute frequency between London and Birmingham and London and Manchester was possible. But when the top speed had to be reduced to 200km/h (125mph) – to save on the exploding costs of the original West Coast Main Line upgrade – the frequency with the same-size fleet of trains had to be reduced to every 20 minutes.

Thus, an 11 per cent reduction in maximum speed led to a 25 per cent cut in frequency and overall passenger capacity. So there can be a direct link between maximum speed and capacity (and a big increase in the cost of building and, above all, maintaining a larger train fleet).

And those who simply want to enhance the existing infrastructure continue to overlook that the British structure gauge is smaller than in the rest of Europe so it is not possible, for example, to operate double-deck trains, whereas HS2 makes this possible.

The Public Accounts Committee, a long-time critic of the Transport Department, claims HS1 through Kent left the taxpayer with a bill of £4.8 billion. But many economists reckon the wider benefits conferred on the economy by Britain’s first high speed line (even with capacity still to spare) is already well over £10 billion, even though the final cost was a fifth higher than the original estimate.

But that was far better than the cost of building the original London & Birmingham Railway, which more than doubled!

It would be good to hear Lord Deighton and HS2 Ltd making such arguments loud and clear and – above all – often.

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