HS2 – public opinion needs facts to be correctly reported

A RECENT Telegraph/ICM poll found that only three per cent of voters thought HS2 will be delivered on time and on budget – but this is hardly surprising, given the amount of misinformation about the project put about by so much of the news media.

For a start, HS2 is generally referred to in media reports as costing anything from £42 billion to £70, £80 or even, recently, £100 billion.

When the Hybrid Bill for phase 1 was published on 25 November, many reports referred to a cost of £50 billion — whereas the quoted price for the first phase given to parliament in June was just £21.4 billion.

But five months later it had come down to £17.16 billion … as reported in the December print edition of Railnews.

Nor are people told that completion of major projects on time and on budget has become the norm in the past decade – including both stages of the Channel Tunnel Rail Link (HS1), the Olympics and, currently, Crossrail.

Indeed, the cost of Crossrail is hardly less than the target budget now set for phase 1 of HS2 – yet there is not, and never has been, a Stop Crossrail campaign or a Crossrail Action Alliance seeking to get the project halted or subjected to judicial reviews . . . perhaps because Crossrail doesn’t pass through Buckinghamshire or Warwickshire!

Mind you, in the terrible way we do these things in Britain, it has still taken some 30 years from conception to get the Crossrail project close to completion (see December’s Railnews for pictures of the first completed tunnel between Paddington and Farringdon).

So how much is HS2 reckoned to cost now?   Early last summer it became clear that The Treasury had required a very substantial ‘contingency’ to be added to the budgeted cost of HS2. Some more cynical observers thought this was a way of The Treasury trying to undermine the whole project.

Opening the debate on the 2nd reading of the High Speed Rail (Preparation) Bill, back in June, Transport Secretary Patrick McLoughlin said:   “We have set an overall indicative amount for the project. “For phase one it is £21.4 billion. “For phase two it is £21.2 billion. “— a total of £42.6 billion in 2011 prices. “— including £14.4 billion of contingency,” he added.

But five months later, on 19 November, while closing the debate on the 3rd reading of the same bill (now an Act), the Transport Minister Baroness Susan Kramer said HS2 Ltd “now estimates that, without any contingency, it could bring in phase 1 at £15.6 billion.”

However, she added, the Transport Secretary had decided to include “a little contingency” — actually, 10 per cent.   Therefore, the target budget for phase 1, extending over some 240 kilometres between London and the West Coast Main Line at Lichfield – which includes more than half the route in tunnels or deep cuttings – plus the spur into Birmingham and a link across London to HS1, is now £17.16 billion . . . a reduction of £4.24 billion (-19.8 per cent) since June.

Has that been reported anywhere (other than in Railnews)?     Phase 2   This means that, from the overall budget figure quoted last June, the remaining amount for HS2 phase 2 – currently still subject to public consultation, so no firm budget can be calculated until the final route is set  – stands at £25.44 billion.   After allocating £1.56 billion contingency to phase 1, a massive £12.84 billion remains of the £14.4 billion contingency previously set aside, still available for phase 2.   But without any contingency, that means HS2 Ltd’s estimate for the phase 2 consultation route is £12.6 billion.   If 10 per cent contingency were to be added (as the Secretary of State has done for phase 1) the target budget for the phase 2 ‘consultation route’ would become £13.56bn – but, as stated above, no final figure can be determined as there could be costly changes to the proposed routes to Leeds and Manchester, although any such changes are highly unlikely to require an extra £12.6 billion, or more than 90 per cent of the original estimate!   So it might be said that, at present, by adding the target budget for phase 1 to the budget for the phase 2 ‘consultation route’ with 10 per cent contingency added, the total indicative budget for the Y network would be £30.72 billion — a great deal less than the £42/43 billion figures generally used by most media! — and 27.5 per cent less than the £42.4 billion quoted by the Transport Secretary back in June.

Rolling stock   Media reports often round the projected cost of HS2 up to £50 billion by including a further £7.5 billion for new rolling stock.

But it seems quite wrong to include such costs in the HS2 construction budget because, back in June during the ‘paving bill’ 2nd reading debate, Patrick McLoughlin said:   “With or without HS2, new rolling stock will be needed on key intercity routes linking London and the North over the next twenty years.”

So, in order to cope with expected growth (another 400 million passengers a year by 2020, according to Network Rail) new rolling stock will have to acquired irrespective of whether HS2 is built.

And if, somehow, more capacity could be found on the existing network instead of building HS2, many more conventional trains would be required (because at lower speeds they cannot make so many round-trips every day and the total fleet number – and cost – could be much higher!).

One estimate is that with HS2 around 60 Very High Speed Trains will be required – but if a similar frequency and capacity could be provided on the conventional infrastructure around 90 High Speed Trains, such as today’s Pendolinos, would be necessary.

For those who doubt such mathematics, they should remember that the original West Coast Main Line upgrade planned in 1997 with a top speed of 140mph would have provided 4 trains an hour between London-Birmingham and London-Manchester, but when the upgrade had to be downgraded and the maximum speed reduced to 125mph, the frequency also had to be reduced to 3 trains per hour.  So lowering the top speed by 11 per cent led to a frequency and capacity reduction of 33 per cent.

HS2 and the National Infrastructure Plan

The HS2 project – currently planned for completion in 2033 – also needs to be viewed in the context of all planned infrastructure expenditure.

On 4 December, The Treasury published a new National Infrastructure Plan containing over £375 billion of investment up to and beyond 2030. As well as transport, the plan sets out investment in energy, flood defence, waste, water and communications infrastructure.

Even if HS2 were to require the full £42.6bn allocated last June, including the £14.4bn contingency, this would amount to around little more than 10 per cent of the total Infrastructure Plan budget between now and 2030 – and less than 0.15 per cent of total gross domestic product (GDP) over the period of construction up to 2033.

Again, how widely has that been reported?

Without full and accurate information public opinion can never be properly informed.

4 thoughts on “HS2 – public opinion needs facts to be correctly reported

  1. The budget for HS2 Ltd, according to an “Estimate of Expense” signed off by Alison Munro its Chief Executive last month (at http://stophs2.org/wp-content/uploads/2013/11/HS2_Phase1_Estimate-of-expense_0.pdf), is £19.39bn. This includes contingency at the P50 level of confidence; this means that there is only a 50% chance that Phase 1 will be delivered at our below this figure. The £21.4bn figure is equivalent, but ups the confidence level to 95% (i.e. 95% chance that the project will be delivered at or below budget); so £21.4bn still represents a realistic budget for Phase 1. As you say, “without full and accurate information public opinion can never be properly informed”.

  2. ‘…only three per cent of voters thought HS2 will be delivered on time and on budget – but this is hardly surprising…’ Correct,becaus ebased on their experience of every large project they are likely to be correct. Portcullis House, Wembley, The Dome, Millennium Stadium, Olympics, Scottish Parliament, any number of government IT projects, public procurement generally. Optimism bias and ideological imperatives contrive to underestimate time and cost and discount the possibility of externalities and unforeseen circumstances. So, HS2 is guaranteed to avoid any such outcome. Doubt it.

  3. Very nice. What about Crossrail, set to come under budget easily?

    You’re making Alan Marhsall’s point for him. When the public are consistently bombarded with selective stats that go unchallenged by the media on a daily basis, what do you expect?

  4. The risk of HS2 to the economy remains: would the time shrinkage of Phase One generate a net gain for Birmingham, or would it make London still more powerful in the UK economy and so sharpen the North South Divide? The die would be cast even before HS2 started to build its twin forks north of Birmingham.

    HS2 Plan B would be built instead of HS2:

    http://hsnorthstart.wordpress….

    Plan B aims to leave the Midlands and North better off than with HS2. Its southern destination would be the Eurostar and Thameslink interchange at St Pancras but it would have a North-first construction start. Critiques welcome.

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