PCU: As some members of the public have suggested, if the business case for HS2 is so compelling, let business fund its construction and the whole operation.
On August 22nd the following message cited the findings of the government’s Public Accounts Committee investigation into HS1 (below)
It would appear from the experiences of several other countries that HS2, if it is built, will add to the ongoing subsidy required for railways in the UK. High Speed Two (HS2) if built will involve the expenditure of £33bn for its construction (London to Manchester and Leeds) plus several more billion for the trains. Is this sensible for a country as indebted as the UK? There are alternatives to HS2.
World Bank: copious and continuing budget support for the debt
What has been overlooked is that high speed rail involves a subsidy to keep its trains running once the lines have been built. In July 2010 a World Bank report cautioned that governments planning high-speed rail systems: “. . .should also contemplate the near-certainty of copious and continuing budget support for the debt”.
The National Audit Office estimated that the total cost to taxpayers of supporting High Speed 1 (in Kent) could be £10.2 billion over a 60 year period. HS2 is considerably longer than HS1 and will cost several times more to build.
Does it make sense for the Government to commit to not only an initial outlay in the order of £40 bn but an ongoing subsidy to run it? The subsidy could amount to £2 bn per year based on the experience of some European countries.
The Optimised Alternative
51M, a group of 18 councils which are opposed to HS2, advocates significantly cheaper alternatives which can be made available much sooner on a progressive basis. These measures would consist of lengthening existing trains to 12 carriages, changing one first class carriage per train to standard class and relieving a handful of track pinch points. This solution is known as the Optimised Alternative and more details may be found on their website: http://www.51m.co.uk/.
- MPs warn government to learn lessons from HS1 – http://www.itv.com/news/central/2012-07-06/mps-warn-government-to-learn-lessons-from-hs1/
- HS1 Channel link leaves £4.8bn (taxpayer) debt, says MPs – http://www.bbc.co.uk/news/uk-18733308
- The PAC report helpfully opens with its summary, conclusions and recommendations and is followed by the record of the oral and written evidence, including a written submission by Mr Bodman. http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubacc/464/464.pdf
In the Financial Times today Philip G. Varley, International CFO and TurnAround Executive, Littleton, CO, US, makes a very sensible point:
“(W)ith the new train, unless you live directly above Birmingham station and plan to meet in the station buffet at Euston you will still spend an hour at each end to complete your journey. A 16% reduction in total journey time, as offered by HS2, is not significant.”
He continues that when in the UK, unless he arrives at the crack of dawn, he needs at least another 40 minutes to find a parking spot in a remote lot and run to the station, adding that a £5m investment in a parking garage at each of these stations could provide another 1,000 spaces, adding:
“While politicians worldwide may like the glamour associated with massive infrastructure projects, spending a fraction of the cost to eliminate bottlenecks at the local level would benefit far more people, sooner, and achieve the overall stated objectives of HS2.”
’Courageous’ ? In that context a weasel word for foolhardy?
Though describing high-speed rail technology as being ‘in vogue’ today, the Financial Times adds news of its ‘setbacks’:
- Last year in China two high-speed trains collided in July, killing 30 people and the government has since cut back on investment.
- In the Netherlands, the country’s sole high-speed rail line encountered huge problems during the construction phase and is still not operating fully at the design speed because of troubles with signalling.
- Portugal and Poland have in recent months cancelled high-speed rail projects because of funding concerns.
Several other newspaper sources:
- Spain will be axing the high speed train running between Toledo, Cuenca and Albacete.
- France’s plans for TGV expansion are running into financing problems because of the recession and the country’s high budget deficit.
- Plans for a high speed line from Amsterdam to Germany (HSL-Oost) have been suspended.
- The Taiwanese government has taken over the running of the Taiwan High Speed Rail Corporation, which was almost bankrupt, two years after it first started running its high speed trains. Passenger numbers were about one third of those forecast.
- Taiwan’s high speed rail system is suffering from subsidence on some of its lines.
- Florida’s governor turned down a $2bn government incentive to develop a high speed rail link from Tampa to Orlando. He believed passenger numbers to be overestimated, and the state would have to pick up the bill for subsidies because the line would be unable to pay for itself.
- Similar decisions were made in Ohio and Winsconsin.
Andrew Gilligan in the Telegraph yesterday expanded on the Netherlands’ experience:
“The new “Fyra” high-speed service in the Netherlands — opened just two years ago — is close to financial collapse with passengers shunning its premium fares and trains running up to 85 per cent empty.
“The line, between Amsterdam, Rotterdam and Breda, cost taxpayers more than £7 billion to build but is losing £320,000 a day amid disastrous levels of patronage.”
He points out that the new 103-mile route is similar in length to Britain’s proposed “HS2” line between London and Birmingham and offers a comparable 25-minute saving. It has not, however, tempted passengers away from the existing service, which is about 20% cheaper.
The Dutch line’s construction costs were relatively low because it crosses largely flat countryside. The British line cuts under west London and through the Chilterns, needing many expensive tunnels, viaducts and cuttings, and is budgeted to cost more than twice the Dutch equivalent.
The British precedent
The only British town to have been given a fully high-speed service to date – Ashford, Kent – has had a half-hourly high-speed service to London, using the new tracks built for the Eurostar, for more than two years. The journey time has fallen by almost half, from more than an hour to 37 minutes.
The claim that the new service has proved an “economic boon” for Ashford is hard to justify: the town’s unemployment rate has fallen more slowly, since the line opened, than the South-East England and British averages, and more slowly than in many other parts of Kent which are not on the high-speed line.
Data from France and other countries with developed high-speed networks suggests that they suck economic activity into the capital more than they push it out into regional centres.
All this factual evidence should be given more weight than hypothetical submissions in a paper exercise undertaken by commissioned consultants.
Some cities have been beset by ‘iconic projects’ which often remove or impoverish beneficial activities and/or lead to the wasteful demolition of well-regarded buildings; Birmingham is a prime example – its vandalism started in the 60s with the breakup of communities in Hockley as the fine solid Edwardian-Victorian centre of the city was ripped out and – in many instances – replaced by unpleasing and less durable buildings.
Birmingham MP Roger Godsiff regards high speed rail as another “vanity project” which will cost taxpayers billions of pounds for no good reason.
The Mail reports that in the House of Commons he said the £32 billion it will cost to build a 225mph line between London, Birmingham and the North could be better spent improving public transport in Birmingham, for example by building an underground system like the London tube or a new tram system.
He made the comments as campaigners against the proposed line handed in a petition with more then 108,000 signatures to Downing Street.
The Post added his other comments:
“HS2 will allow some businessmen and women to get to London a bit quicker, and to do this it will cut through whole swathes of the country which belong to all of us, not just the people who live there. Business leaders are backing HS2 but they will be the only ones who can afford the fares.
“If we have £32 billion to spend then I think there are better ways of doing it than this. A rapid transit system in Birmingham, or an underground, would be far more valuable to the people of the city.
“The economic arguments for it don’t stack up and I think many people who are struggling to make ends meet at the moment will feel there are better ways the government can spend billions of pounds.”
Though there have been adverse reports of some of this MP’s activities, many readers will welcome his opposition to the expensive replacement for Trident, and – more recently – to the decision to give US arms giant Lockheed Martin a £150 million contract to provide and manage a computer system which reads the filled-in census forms and stores the results. Mr Godsiff warned that under the US Patriot Act, which became law in 2001 following the 9-11 terror attacks, the United States government had the power to examine any data held by a US company.
As he writes:
The general public in Birmingham, Manchester, Leeds, Glasgow and Edinburgh have understandably shown no enthusiasm for HS2.
Their needs are for government to create an environment and introduce relevant programmes today which bring about investment in sustainable local employment.
Shiny new trains, tracks and railway stations built and supplied with imported labour and equipment and then left largely unused but massively subsidised are seen for what they are – another example of political arrogance and ineptitude.
Mr Conway hopes to see future editions of Private Eye examining the social, economic and ecological flaws in HS2, with its usual well-researched articles.
Source: Private Eye, Letters, 16.9.11