HS2 Six Monthly Report Dec 24

[HSTEd]

I agree that phase 1 should be concentrated on for the next couple of years but there's absolutely no reason phase 2a couldn't begin 2028 once phase 1 resources are freed up. That's a completely realistic and sensible position. It can easily be done within the resources currently allocated to rail.

Given how badly HS2 construction has gone, and the steadily deteriorating classic railway finances, I can't see any appetite for blowing that much money on it.

Classic railway operational subsidies are running a billion pounds per month as it is and I don't see that fundamentally changing any time soon.

Classic railway subsidies already run 0.5% of GDP by themselves. Road spending is comparable.

There is little left given how badly the railway has handled all recent projects.

EDIT:

Ofcourse, there is likely an increasing chance that completion of HS2 phase 1 works will be delayed beyond 2027, and Euston construction will consume many billions beyond that.

 

[Nicholas Lewis]

Given how badly HS2 construction has gone, and the steadily deteriorating classic railway finances, I can't see any appetite for blowing that much money on it.

Classic railway operational subsidies are running a billion pounds per month as it is and I don't see that fundamentally changing any time soon.

Classic railway subsidies already run 0.5% of GDP by themselves. Road spending is comparable.

There is little left given how badly the railway has handled all recent projects.

EDIT:

Ofcourse, there is likely an increasing chance that completion of HS2 phase 1 works will be delayed beyond 2027, and Euston construction will consume many billions beyond that.

Earliest date of HS2 is quoted as 2029 which is unlikely given the systems contractors wont be mobilised for at least another year and I would imagine they will want at least a year of testing given that its taking months just for a standard two track East West rail. Hence they like to quote the window as 2029-33.

 

[CdBrux]

It can easily be done within the resources currently allocated to rail.

I believe this assumption (that investment resources allocated to rail will remain roughly constant) is not necessarily correct. The total investment resources may not be fixed but there are borrowing rates consequences if they are increased

 

[Grimsby town]

Given how badly HS2 construction has gone, and the steadily deteriorating classic railway finances, I can't see any appetite for blowing that much money on it.

Classic railway operational subsidies are running a billion pounds per month as it is and I don't see that fundamentally changing any time soon.

Classic railway subsidies already run 0.5% of GDP by themselves. Road spending is comparable.

There is little left given how badly the railway has handled all recent projects.

EDIT:

Ofcourse, there is likely an increasing chance that completion of HS2 phase 1 works will be delayed beyond 2027, and Euston construction will consume many billions beyond that.

How are rail finances seriously deteriorating when operation revenue increased significantly and costs reduced in the past year. Realistically revenue is going to continue to grow above inflation for the foreseeable future. Yes there's subsidy although rail finances are still a bit smoke and mirrors and around 20% of the subsidy is debt financing anyway.

Is there much evidence HS2 is massively behind schedule on its civils works? It seems like another overly pessimistic statement. For all of the issues the engineering appears to be running relatively to timetable with some slippages. Again being realistic most of the civils are going to be complete in 2027/28. Resources could then be moved 2a which wouldn't be anywhere near £7 billion per year.

I believe this assumption (that investment resources allocated to rail will remain roughly constant) is not necessarily correct. The total investment resources may not be fixed but there are borrowing rates consequences if they are increased

There are but Reeves seems relatively happy to accept that. Time after time Investment in the UK has been shown to have great returns because we don't invest enough. Certainly not enough to run into diminishing returns or crowding out. It would be strange if Reeves increases overall investment but significantly reduces rail/transport investment particularly when it supports some of their strategic aims. At the same I don't expect above the current level of investment in rail but as I say phase 2a can easily be afforded within the current levels of capital investment and be delivered in the early 2030s.

 

[HSTEd]

How are rail finances seriously deteriorating when operation revenue increased significantly and costs reduced in the past year. Realistically revenue is going to continue to grow above inflation for the foreseeable future. Yes there's subsidy although rail finances are still a bit smoke and mirrors and around 20% of the subsidy is debt financing anyway.

None HS2 government support to the railway hasn't improved substantially in the last year. Subsidies to the non HS2 railway are pretty much where they were before, ~£12.5bn vs £12.6bn last year. The gains are essentially all due to inflation, the fundamental position has not changed.

Beyond that, debt financing on debt the railway ran up to avoid asking the Treasury for more money is still a subsidy to the railway!

Revenue isn't going to keep climbing rapidly because the coronavirus recovery is more or less played out, as can be seen in the leveling out traffic figures. You might get a small amount above inflation from ticket rises, but that will be about it.
Meanwhile costs will continue to rise, likely significantly above inflation - as it has for all construction heavy trades.

Is there much evidence HS2 is massively behind schedule on its civils works? It seems like another overly pessimistic statement. For all of the issues the engineering appears to be running relatively to timetable with some slippages. Again being realistic most of the civils are going to be complete in 2027/28.

The opening post in this thread reports that HS2 is unable to narrow down beyond 2029-2033, and that there are schedule pressures that will be reported on in due course.
That suggests that the latter end of the range is far more likely - and that it may even slip beyond there.

Resources could then be moved 2a which wouldn't be anywhere near £7 billion per year.

Well there isn't really a credible cost estimate for Phase 2A
The last estimate from HS2 was up to £7bn, pre cancellation. As noted by the head of HS2, we can't even trust the Phase 1 figures let alone years old Phase 2a ones.

We are at the point where the government's own monitoring people believed (in 2023) that continuing Phase 1 compared to axing it and paying the cancellation costs had a BCR of 1.1-1.8 - which is certainly not good compared to Treasury norms. Phase 2a's BCR was around 1.2 at the last assessment in 2021.

Given that Reeves is a hairs breadth from having to break her promise not to raise taxes again, providing money to anything associated with HS2 seems very unlikely. There are many calls on the investment budget in government, and even within rail I can think of many other ways to spend that money.

 

[Grimsby town]

None HS2 government support to the railway hasn't improved substantially in the last year. Subsidies to the non HS2 railway are pretty much where they were before, ~£12.5bn vs £12.6bn last year. The gains are essentially all due to inflation, the fundamental position has not changed.

I think you are misunderstanding the numbers. There was £1.2bn increase in passenger revenue. This a real terms increase so includes inflation. Costs stayed relatively constant in real terms and as result the financial position is better off. The lack of change in government subsidy is attributed to differing time periods. Again its a bit smoke and mirrors but the main point is that within a year rail finances improved by over £1bn in a year.

Revenue isn't going to keep climbing rapidly because the coronavirus recovery is more or less played out, as can be seen in the leveling out traffic figures. You might get a small amount above inflation from ticket rises, but that will be about it.
Meanwhile costs will continue to rise, likely significantly above inflation - as it has for all construction heavy trades.

No I doubt revenue will rise another £1 billion over the coming year but there's no reason to think it won't settle into a steady increase as was seen during pre-covid. I graphed patronage data the other day for work and things haven't yet settled back into a normal pattern but they arent far off. Personally i think growth will be higher than the immediate years before covid. Costs didn't rise significantly above inflation last year so its not clear why they would in the coming year.

The opening post in this thread reports that HS2 is unable to narrow down beyond 2029-2033, and that there are schedule pressures that will be reported on in due course.
That suggests that the latter end of the range is far more likely - and that it may even slip beyond there.

Well there isn't really a credible cost estimate for Phase 2A
The last estimate from HS2 was up to £7bn, pre cancellation. As noted by the head of HS2, we can't even trust the Phase 1 figures let alone years old Phase 2a ones.

We are at the point where the government's own monitoring people believed (in 2023) that continuing Phase 1 compared to axing it and paying the cancellation costs had a BCR of 1.1-1.8 - which is certainly not good compared to Treasury norms. Phase 2a's BCR was around 1.2 at the last assessment in 2021.

Given that Reeves is a hairs breadth from having to break her promise not to raise taxes again, providing money to anything associated with HS2 seems very unlikely.

The latter end may be more likely but I'm not sure how that prevents phase 2a from being started in 2027/28. Expenditure is clearly going to start to fall around this period even if exact dates can't be put on it. Whatever phase 2a costs its yearly expenditure is going to be significantly smaller than phase 1. BCRs don't work well for large projects like HS2 as a very senior busines case colleague of mine stressed. Anything above 1 should be acceptable particularly when level 3 benefits and the full impacts of released capacity aren't included.

Reeves has little choice but to provide money for HS2 to finish it. Building phase 2a which is widely considered vital to realising £10s billions more in benefits really should be a no brainer for significantly smaller yearly expenditure. It won't do much to Reeve's budget either because it comes towards the end of parliament.

 

[hwl]

The opening post in this thread reports that HS2 is unable to narrow down beyond 2029-2033, and that there are schedule pressures that will be reported on in due course.
That suggests that the latter end of the range is far more likely - and that it may even slip beyond there.

A few things:
They don't want to give public opening dates (to be held to especially giving contractors ammunition -see below). I'd currently go for August 2030 for OOC - Birmingham opening.
They don't want to give contractors leverage in claiming for extra costs to meet dates that have been set but have to real significance.

The new CEO Mark Wild is well aware of the effect dates had on Crossrail contractors and costs so expect the same to happen here.
Of the four major civils contractor groups:
1 has been good on time/cost
1 has been ok so far on time/cost
2 have been rubbish on time and cost.

What we have seen in the latter half of 2024 is the reprioritisation of civils priorities in the west midlands with a focus on getting the OOC - Birmingham alignment completed first

Well there isn't really a credible cost estimate for Phase 2A
The last estimate from HS2 was up to £7bn, pre cancellation. As noted by the head of HS2, we can't even trust the Phase 1 figures let alone years old Phase 2a ones.

We are at the point where the government's own monitoring people believed (in 2023) that continuing Phase 1 compared to axing it and paying the cancellation costs had a BCR of 1.1-1.8 - which is certainly not good compared to Treasury norms. Phase 2a's BCR was around 1.2 at the last assessment in 2021.

Given that Reeves is a hairs breadth from having to break her promise not to raise taxes again, providing money to anything associated with HS2 seems very unlikely. There are many calls on the investment budget in government, and even within rail I can think of many other ways to spend that money.

Nothing much will publicly happen till the review of phase 1 contract and contractor performance. The particular cost plus model (used due to contractor whinging on risk post Carillion collapse) has been a big big flop for HS2.

Plenty will go on in the background though.

 

[Xenophon PCDGS]

Nothing much will publicly happen till the review of phase 1 contract and contractor performance. The particular cost plus model (used due to contractor whinging on risk post Carillion collapse) has been a big big flop for HS2.

The Carillion debacle was most certainly of a large enough scale not to be quietly put into never-ending reviews. How many times have we had Governmental ministers wheeling out the old adage of "There are lessons to be learnt, etc"

Takes me back to my 1960s folk singing days when in our repertoire was the song..."It's a lesson too late for the learning"(The Last Thing on My Mind), the version of which was by Tom Paxton.

 

[Class 170101]

I agree that phase 1 should be concentrated on for the next couple of years but there's absolutely no reason phase 2a couldn't begin 2028 once phase 1 resources are freed up. That's a completely realistic and sensible position. It can easily be done within the resources currently allocated to rail.

You assume that the Treasury / DfT want to allocate the same resources to rail. Thetcher's government allocated less to rail, indeed one of her minsters stood up in the House (and I forget who now) when asked a question about Rail Projects told the House there were none on his desk. BR had been told not to put any on his desk so he could say he wasn't lying to Parliament. So be aware we could end up back in that state of affairs.

 

[Grimsby town]

You assume that the Treasury / DfT want to allocate the same resources to rail. Thetcher's government allocated less to rail, indeed one of her minsters stood up in the House (and I forget who now) when asked a question about Rail Projects told the House there were none on his desk. BR had been told not to put any on his desk so he could say he wasn't lying to Parliament. So be aware we could end up back in that state of affairs.

I'm not assuming that. The government could reduce capital expenditure and still fund 2a as the 6 monthly report shows. I'm not sure the current government and Thatcher's government are particularly comparable. I don't expect a significant decrease in sustainable travel spending.

 

[Nicholas Lewis]

You assume that the Treasury / DfT want to allocate the same resources to rail. Thetcher's government allocated less to rail, indeed one of her minsters stood up in the House (and I forget who now) when asked a question about Rail Projects told the House there were none on his desk. BR had been told not to put any on his desk so he could say he wasn't lying to Parliament. So be aware we could end up back in that state of affairs.

Thatchers administration authorised plenty of schemes for BR and certainly the biggest expansion of electrification since the modernisation plan. It was also the Torys again that authorised more electrification schemes in the 2010s but the rail industry failed to capitalise on it.

 

[LNW-GW Joint]

I believe this assumption (that investment resources allocated to rail will remain roughly constant) is not necessarily correct. The total investment resources may not be fixed but there are borrowing rates consequences if they are increased

At the start of HS2, there was a Treasury view that the project would follow Crossrail and consume a similar annual amount, and be separate to classic rail funding via NR's Control Periods.
There's now an increasing likelihood that HS2 and classic rail spend will be combined, especially as operation approaches with trains and maintenance to be funded.
Private involvement in the project (eg at Euston or for any extension beyond Handsacre) might change that.

 

[Nottingham59]

Phase 2a's BCR was around 1.2 at the last assessment in 2021.

In the Full Business Case for Phase 1, pubished April 2020, the figures for Phase 1 and for Phase 1 and 2a combined were given table 2.1 (p46). Subtracting one column from the other gives the following for Phase 2a by itself:

• Net transport benefits £5.3bn
• Total costs £7.9bn
• Revenues £2.7bn
• Net cost to government £5.2bn

So the BCR of Phase 2a by itself in 2020 was 5.3/5.2 = 1.02

Since then, the costs will have risen from 2019 prices by around 50%, so £11-12bn at current prices. I would expect that the revenue increases and transport benefits will have risen also, but not as much as the costs. So the BCR of phase 2a will be less than one today.

Unless the mayors can find a way of realising the transport benefits and revenues from a Birmingham-Manchester line at very much less cost than HS2, then I fear the economics will never work.

https://assets.publishing.service.gov.uk/media/5fc51d7b8fa8f54755392863/full-business-case-hs2-phase-one.pdf

 

[Grimsby town]

In the Full Business Case for Phase 1, pubished April 2020, the figures for Phase 1 and for Phase 1 and 2a combined were given table 2.1 (p46). Subtracting one column from the other gives the following for Phase 2a by itself:

• Net transport benefits £5.3bn
• Total costs £7.9bn
• Revenues £2.7bn
• Net cost to government £5.2bn

So the BCR of Phase 2a by itself in 2020 was 5.3/5.2 = 1.02

Since then, the costs will have risen from 2019 prices by around 50%, so £11-12bn at current prices. I would expect that the revenue increases and transport benefits will have risen also, but not as much as the costs. So the BCR of phase 2a will be less than one today.

Unless the mayors can find a way of realising the transport benefits and revenues from a Birmingham-Manchester line at very much less cost than HS2, then I fear the economics will never work.

https://assets.publishing.service.gov.uk/media/5fc51d7b8fa8f54755392863/full-business-case-hs2-phase-one.pdf

Although some of that cost phase 2a has already occurred and isn't likely to be fully recoverable. Like most transport projects, if they want to find more benefits they'll find them. The impacts of released capacity on the classic network or level 3 benefits aren't included in the Phase 2a BCR.

 

[FMerrymon]

In the Full Business Case for Phase 1, pubished April 2020, the figures for Phase 1 and for Phase 1 and 2a combined were given table 2.1 (p46). Subtracting one column from the other gives the following for Phase 2a by itself:

• Net transport benefits £5.3bn
• Total costs £7.9bn
• Revenues £2.7bn
• Net cost to government £5.2bn

So the BCR of Phase 2a by itself in 2020 was 5.3/5.2 = 1.02

Since then, the costs will have risen from 2019 prices by around 50%, so £11-12bn at current prices. I would expect that the revenue increases and transport benefits will have risen also, but not as much as the costs. So the BCR of phase 2a will be less than one today.

Unless the mayors can find a way of realising the transport benefits and revenues from a Birmingham-Manchester line at very much less cost than HS2, then I fear the economics will never work.

https://assets.publishing.service.gov.uk/media/5fc51d7b8fa8f54755392863/full-business-case-hs2-phase-one.pdf

~20% not 50% increase between 2019 prices and 2024 prices.

As mentioned in the TSC, BCR is used to decide between different alternatives to pursue a strategic goal.

The impacts of released capacity on the classic network or level 3 benefits aren't included in the Phase 2a BCR.

Exactly, nor does it make any distinction that the number of hs2 services may also be limited on phase 1 north of handsacre, if phase 2a is not built.

There was some suggestion from Louise Haigh's appearance at the TSC that the BCR appraisal methods were being looked at to better model rail schemes.

 

[slowroad]

~20% not 50% increase between 2019 prices and 2024 prices.

As mentioned in the TSC, BCR is used to decide between different alternatives to pursue a strategic goal.


Exactly, nor does it make any distinction that the number of hs2 services may also be limited on phase 1 north of handsacre, if phase 2a is not built.

There was some suggestion from Louise Haigh's appearance at the TSC that the BCR appraisal methods were being looked at to better model rail schemes.

Similar caveats will apply to the appraisal of other projects that the funds could support. The poor BCR remains indicative of a lousy use of limited public money.

 

[Nottingham59]

~20% not 50% increase between 2019 prices and 2024 prices.

Yes, that figure was a mistake. CPI inflation from 2019 to 2024 was indeed around 25%, from the Bank of England inflation calculator.

But the cost inflation experienced by HS2 Ltd has been higher than general inflation. The six-monthly report says that the 2024-25 budget is £5.4bn at 2019 prices, but "the budget and forecast are both presented in 2019 prices in this report, rather than in cash terms and, therefore, do not account for inflation. The 2024 to 2025 budget in nominal terms (accounting for inflation) is £7 billion."

£7bn/£5.4bn is 1.296 so cost inflation using HS2's bespoke inflation index has been around 30%. Making the business case for 2a worse now than it was in 2019.

As mentioned in the TSC, BCR is used to decide between different alternatives to pursue a strategic goal.

Yes, but the strategic goal of HS2 was always ambiguous:

• If the goal was to relieve capacity constraints on the southern WCML then this could have been achieved at a fraction of the cost of HS2.
• If the goal was to promote economic growth in the North of England, then other transport investments would have been far more cost-effective.
• If the goal was to provide faster journeys from Manchester and Leeds to central London, then other designs of high-speed line would have been cheaper.

 

[YorkshireBear]

Yes, but the strategic goal of HS2 was always ambiguous:

• If the goal was to relieve capacity constraints on the southern WCML then this could have been achieved at a fraction of the cost of HS2.
• If the goal was to promote economic growth in the North of England, then other transport investments would have been far more cost-effective.
• If the goal was to provide faster journeys from Manchester and Leeds to central London, then other designs of high-speed line would have been cheaper.

Bullet point one I don't believe it would, the cost of WCRM at today's prices would probably make HS2 look good value (all things in life are relative). Big game changing upgrades to rail routes cost big money and cause decades of disruption. Look at TRU, which I think at the last count is something like £12bn.

Lots of things wrong with HS2, particularly the strategy, ambiguous goals, political interference, suicidal contract strategy etc. Etc. But saying upgrading existing routes would be better has been done to death and just isn't the case.

 

[Nottingham59]

Lots of things wrong with HS2, particularly the strategy, ambiguous goals, political interference, suicidal contract strategy etc. Etc. But saying upgrading existing routes would be better has been done to death and just isn't the case.

That depends what your objective is. If the objective is to increase passenger capacity on the WCML, that could have been done simply by running 500m long-distance trains into Euston. The infrastructure to support that would have been far far cheaper than HS2.

With the current HS2 phase 1, they're going to have to upgrade Colwich and lengthen platforms at Crewe, Preston, Carlisle, and eventually at Piccadilly anyway.

 

[YorkshireBear]

That depends what your objective is. If the objective is to increase passenger capacity on the WCML, that could have been done simply by running 500m long-distance trains into Euston. The infrastructure to support that would have been far far cheaper than HS2.

With the current HS2 phase 1, they're going to have to upgrade Colwich and lengthen platforms at Crewe, Preston, Carlisle, and eventually at Piccadilly anyway.

I would have said upgrading Euston and it's approaches and Birmingham New Street and it's approaches (at both ends) to take trains that length would cost a small fortune. Especially with both being below the surrounding ground restricting access and options for widening the approaches to suit platforms extending out into what is now paintwork and running lines.

There isn't a quick fix to WCML capacity unfortunately. Again that doesn't mean I think HS2 in its current form is in anyway good!

 

[absolutelymilk]

Yes, but the strategic goal of HS2 was always ambiguous:

• If the goal was to relieve capacity constraints on the southern WCML then this could have been achieved at a fraction of the cost of HS2.
• If the goal was to promote economic growth in the North of England, then other transport investments would have been far more cost-effective.
• If the goal was to provide faster journeys from Manchester and Leeds to central London, then other designs of high-speed line would have been cheaper.

You make it sound like having multiple objectives is a bad thing. Why can't it try and do all of those things (plus significantly faster journeys into Birmingham)?

 

[FMerrymon]

Yes, but the strategic goal of HS2 was always ambiguous:

• If the goal was to relieve capacity constraints on the southern WCML then this could have been achieved at a fraction of the cost of HS2.
• If the goal was to promote economic growth in the North of England, then other transport investments would have been far more cost-effective.
• If the goal was to provide faster journeys from Manchester and Leeds to central London, then other designs of high-speed line would have been cheaper.

(from 2009) The strategic goal has never been ambiguous. Was always about track capacity. Just increasing platform lengths, a significant task in itself, would not have achieved this objective.

Once a new line had been decided as the solution, the other benefits follow along. You might as well make it faster, for example

 

[stuu]

That depends what your objective is. If the objective is to increase passenger capacity on the WCML, that could have been done simply by running 500m long-distance trains into Euston. The infrastructure to support that would have been far far cheaper than HS2.

With the current HS2 phase 1, they're going to have to upgrade Colwich and lengthen platforms at Crewe, Preston, Carlisle, and eventually at Piccadilly anyway.

Exactly how much would extending platforms at any of the major city stations cost? New St alone would entail demolition of half the city centre.

If capacity were the only consideration then perhaps running everything as 12 car 110mph EMUs would be the solution, but I doubt it would be a popular one

 

[absolutelymilk]

The other thing people forget is that with HS2 being designed to modern standards, it should be much more reliable - less prone to flooding and leaves on the line, no need to worry about signal failures etc.

 

[HSTEd]

As mentioned in the TSC, BCR is used to decide between different alternatives to pursue a strategic goal.

But I don't see any pressing strategic goal that is achieved by building Phase 2A.

Exactly, nor does it make any distinction that the number of hs2 services may also be limited on phase 1 north of handsacre, if phase 2a is not built.

Well they will still be limited by other bottlenecks, just at a slightly higher value.

It's an awful lot of money to spend for a small handful of extra paths per hour.
It might be "better value" than Phase 1, but that is just because Phase 1 has turned out to be awful value for money.

 

[YorkshireBear]

Deleted, posted in error.

 

[themiller]

It’s not the BCR that’s most important when considering High Speed Rail in Britain but the Strategic Value. As with electrification, further projects are enabled by what’s gone before such as the proposed infill schemes. BCR is just a tool after the Strategic decision has been made in order to fine tune options. If BCR had been used on the first motorway, I doubt that it would have been built.

 

[slowroad]

It’s not the BCR that’s most important when considering High Speed Rail in Britain but the Strategic Value. As with electrification, further projects are enabled by what’s gone before such as the proposed infill schemes. BCR is just a tool after the Strategic decision has been made in order to fine tune options. If BCR had been used on the first motorway, I doubt that it would have been built.

BCR is more than that. It is also an indicator of overall value for money. As such it is incomplete and imperfect, bit when you get down to near one - or below - it is a pretty good sign that you’re not going to get enough strategic value for your money. You need very strong additional considerations to override it.

 

[Geogregor]

BCR process considering such large projects as HS2 is highly dubious. This line will be here for century or more, yet benefits are calculated for the next 20-30 years. And even those are often very conservative estimates.

Just look at Elizabeth Line, it was all moaning about the price tag, delays etc. It is now proving to be way more successful than even the most optimistic predictions indicated. I'm pretty sure the same will be true in the case of the HS2. It will fill quicker and it will create more development opportunities than anybody predicts, especially the bean-counters in the treasury

I wonder if Victorians would ever build anything if they just endlessly debate the BCR instead of actually building the infrastructure, which we still use 150 years later.

 

[themiller]

BCR is more than that. It is also an indicator of overall value for money. As such it is incomplete and imperfect, bit when you get down to near one - or below - it is a pretty good sign that you’re not going to get enough strategic value for your money. You need very strong additional considerations to override it.

Looking at the pictures of the first motorway, the BCR must have been well below 1 but the strategy was to link places by fast roads with greater capacity so the investment was to kick-start a network and that has been successful. Whether the idea behind the strategy was right is a different matter.
Taken to the extreme, early man digging out a cave didn’t have a positive BCR until it could be used as, until it was useable as a shelter, it was a waste of time and effort. Having built the cave, extending it would have been a good use of resources as more family could be sheltered and protected from predators and food could be stored.
Likewise with high speed lines, the greatest benefit comes with a network but you have to start somewhere.