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HS2 6th Monthly Report Nov 23

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Nicholas Lewis

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Latest update to parliament published

hs2-6-monthly-report-to-parliament-november-2023

Six months on not much new on when it will open still 2029-2033 but it will now cost significantly more

The HS2 Ltd Board has now advised me that its updated EAC for Phase 1 is £49 billion to £57 billion (2019 prices), the scope of which was the route from Euston to Birmingham and works north to Fradley and the Handsacre Junction. This is a very significant upwards revision compared with HS2 Ltd’s previous projections and is a wide range in comparison to the scope of the remaining work.
Still using 2019 prices is becoming a joke but main increase is

he latest projection HS2 Ltd provided for MWCC (Civils) is £21.8 billion to £23.4 billion (in 2019 prices), which represents a cost increase of £6.1 billion from baseline 7.1.

Well given the railway systems have yet to be contracted this does not bode well no wonder government backed out of phase 2. Also this financial year they need an additional 1.5B vs original budget which DfT will have to find from somewhere if HMT dont cough up.

That said DfT doesn't agree with the numbers saying it doesn't reflect the fact phase 2 is cancelled and they are being risk averse and that they want them revisited to reflect this.

The government disagrees with the £49 billion to £57 billion figure for 2 reasons. First, it was drawn up by HS2 Ltd before they were notified of the decision to cancel Phase 2. It reflects HS2 Ltd’s understanding of the project in September – that it would be proceeding to Manchester and the East Midlands, and with more expansive plans for Euston
Not sure how they believe this is going to save anything but guess they want to stuff costs into phase 2 abortive costs to make phase 1 look good.
 
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LNW-GW Joint

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This section is pretty telling: the rail systems (track, signalling, catenary and power supply) are "unaffordable":
HS2 Ltd continues tendering for Phase 1 rail systems packages, including track installation, overhead catenary and high-voltage power. HS2 Ltd has provided suppliers with scope clarifications to support them in submitting competitive bids. Bids previously submitted by the supply chain showed higher indirect costs and fees than estimated and are currently unaffordable. These pressures are recognised in the revised EAC range advised by HS2 Ltd. HS2 Ltd continues to develop its management capability for the rail systems alliance, which is responsible for delivering these systems packages in a collaborative model.

Is this advance warning of scope reduction for the 8tph now expected to run on HS2?
It also looks as though the government plans to un-safeguard Phase 2a and 2b (less the NPR sections) within weeks/months, and dispose of land purchased.

Officials are working to formally lift Phase 2a safeguarding within weeks and Phase 2b safeguarding will be amended by summer 2024, to allow for any safeguarding needed for NPR. There will be no further compulsory purchase notices on Phase 2a, or the non-NPR sections of Phase 2b, and HS2 Ltd are not accepting new applications under the existing schemes from property owners in the areas where safeguarding is going to be lifted. Applications that are in progress will be handled on a case-by-case basis after consultation with the claimant. We are currently developing the programme for selling land acquired for HS2 that is no longer needed and will set out more details in due course. We will take time to develop this programme carefully to ensure it delivers value for money for taxpayers and does not disrupt local property markets. We will engage with the communities and individuals who are affected throughout this process.
 
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Sonik

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It also looks as though the government plans to un-safeguard Phase 2a and 2b (less the NPR sections) within weeks/months, and dispose of land purchased.

We are currently developing the programme for selling land acquired for HS2 that is no longer needed and will set out more details in due course. We will take time to develop this programme carefully to ensure it delivers value for money for taxpayers and does not disrupt local property markets.
Translation: nothing substantive is going to happen before the general election. And it's unlikely that many buyers would be mad enough to purchase HS2 property anyway before a new government sets out their stall, especially since the property market is heading into a downturn.

Seems to me the intention is to dump the problem of a sabotaged and dysfunctional project onto the next government, who will either have to find the money to continue, or carry on with dismantling it in line with Sunak's decision. And it will be very difficult to make a decent BCR for NPR without HS2 since the two are integral

Cynical politics of the highest order.
 
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Envoy

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I watched a very interesting discussion last night about HS2 on TRT World (the English language channel based in Turkey). The programme is called ‘Roundtable’ and I see it is on again today (16 Nov 2023) at 9.30am and 3pm but I am not sure if it is the same topic. Christian Wolmar is one of the participants.

Freesat 215 / Sly 513.

Update: The 9.30am edition is indeed the HS2 programme.
 
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JonathanH

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Six months on not much new on when it will open still 2029-2033 but it will now cost significantly more
Unfortunately it looks like Phase 1 is heading onwards towards the £100 billion that its detractors always claimed it (alone) would cost.
 

YorkshireBear

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Unfortunately it looks like Phase 1 is heading onwards towards the £100 billion that its detractors always claimed it (alone) would cost.
While a fair point I'm not sure the detractors forecasted COVID and war induced inflation at the time.

Many of the other issues (poor management, poor contracting, mismanagement by the DfT) all were foreseeable though of course!
 

HSTEd

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Seems to me the intention is to dump the problem of a sabotaged and dysfunctional project onto the next government, who will either have to find the money to continue, or carry on with dismantling it in line with Sunak's decision. And it will be very difficult to make a decent BCR for NPR without HS2 since the two are integral
Or just putting a woefully dysfunctional project out of its misery.

The continued major cost growth on Phase 1 does not engender confidence in all of their other cost estimates.
 

Neen Sollars

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Unfortunately it looks like Phase 1 is heading onwards towards the £100 billion that its detractors always claimed it (alone) would cost.

Yep, but its an expensive waste of taxpayers money to be proved correct. Should never have been constructed Birmingham to London first. Birmingham to Manchester and Birmingham to Leeds, via the sensible route (not Toton) first.
 

HSTEd

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Yep, but its an expensive waste of taxpayers money to be proved correct. Should never have been constructed Birmingham to London first. Birmingham to Manchester and Birmingham to Leeds, via the sensible route (not Toton) first.
What would the "sensible route" be?
The only route that looks significantly better than Toton, assuming Meadowhall is already off the table, would have been just to go via Manchester.......
 

mike57

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Unfortunately it looks like Phase 1 is heading onwards towards the £100 billion that its detractors always claimed it (alone) would cost.
Which is around £1500 for every UK resident. How many people (not how many journeys) will use it during its first few years, I am going to guess maybe 1 million, thats £100,000 per user. If the original concept could have been delivered at something close to budget allowing for inflation then it was worth doing, the current scheme just seems like a very expensive southern WCML capacity improvement. And any incoming government, even if they are in favour of the principles of the scheme are not going to have the finacial wiggle room to do anything different. If I were leader of the Labour Party I would be going "Phew, good job Sunak, you saved me from making some difficult decisions"
 

trebor79

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Utterly depressing. The whole project needs cancelling immediately, pull the shutters down on HS2 Ltd and get Network Rail to utilise some of the infrastructure that has been put in place already to build a 100mph southern WCML freight avoiding line.
Or just leave the civils as a monument to hubris and stupidity, and take whichever politician proposes the next grandiose vanity project out to have a look...
 

Grimsby town

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Utterly depressing. The whole project needs cancelling immediately, pull the shutters down on HS2 Ltd and get Network Rail to utilise some of the infrastructure that has been put in place already to build a 100mph southern WCML freight avoiding line.
Or just leave the civils as a monument to hubris and stupidity, and take whichever politician proposes the next grandiose vanity project out to have a look...

Why would you do that? Even with the cost increases the best thing to do is just build phase 1 and ideally the rest of it too. It's basically another £25 billion to achieve a workable HSR. Converting it into a freight railway isn't going to be cheaper or easier when you consider you'd need new rounds of consultations and acts of Parliament to make any significant changes. As it gets built, the scope for further cost rises decreases anyway.
 

trebor79

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Why would you do that? Even with the cost increases the best thing to do is just build phase 1 and ideally the rest of it too. It's basically another £25 billion to achieve a workable HSR. Converting it into a freight railway isn't going to be cheaper or easier when you consider you'd need new rounds of consultations and acts of Parliament to make any significant changes. As it gets built, the scope for further cost rises decreases anyway.
Fine. Just stop all activity on it, close down HS2 Ltd and write it off as a bad job poorly executed.
£100bn. What an absolutely monumental waste of money. Are the rails to be plated with gold or something?
 

LNW-GW Joint

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HS2 has zero connections to other lines at the London and Birmingham ends, and the Calvert intersection would only give you one of any utility towards Oxford.
The work to connect HS2 into the freight network around London (eg to the NLL at OOC/Willesden) would be costly as the relative levels and alignments are all adverse.
The cancelled HS2-HS1 connection would have been useful for freight.

But the "cancel it all" vibe is still doing the rounds, see Simon Jenkins' article today in the Guardian.
This is just the tail end of his piece, assuming Phase 1 is completed.
If the existing phase of HS2 proceeds it should clearly stop at the Elizabeth Line at Old Oak Common. This is intended to be the Canary Wharf of west London. HS2 would at least give a boost where one is welcome. Labour’s Keir Starmer, who has been pathetically weak on HS2, should immediately announce that, if he will not do the right thing and cancel HS2, he will at least stop it at Old Oak Common. It would be the one sensible decision in this whole fiasco.
 

vic-rijrode

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HS2 has zero connections to other lines at the London and Birmingham ends, and the Calvert intersection would only give you one of any utility towards Oxford.
The work to connect HS2 into the freight network around London (eg to the NLL at OOC/Willesden) would be costly as the relative levels and alignments are all adverse.
The cancelled HS2-HS1 connection would have been useful for freight.

But the "cancel it all" vibe is still doing the rounds, see Simon Jenkins' article today in the Guardian.
This is just the tail end of his piece, assuming Phase 1 is completed.
This, presumably, is the same Simon Jenkins that is the author of "Britain's 100 Best Railway Stations". If his attitude had prevailed a couple of hundred years ago, he could now have been writing "Britain's 100 Best Coaching Inns" probably appealing to "Coach Spotters"....
 

Grimsby town

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Fine. Just stop all activity on it, close down HS2 Ltd and write it off as a bad job poorly executed.
£100bn. What an absolutely monumental waste of money. Are the rails to be plated with gold or something?
You can't just stop all activity on it. As the report says £25 billion has been spent on it. Miles of tunnels, numerous bridges, half a giant concrete box at OOC etc. Some of that you could leave but most you're going to have to secure and mitigate.

In the public accounts committee today it was said that stopping HS2 would need mitigation on and an unprecedented scale and nobody knows how much thar will cost. Not to mention the huge number of people you'd be making unemployed. The land sales might generate some net revenue but selling the land for 2a sounds complex enough. There'll be a cost to the process of selling that land.

HS2 is expensive but it's not untypical for an infrastructure project in this country. On a per mile basis, its about 3 times cheaper than crossrail and slightly cheaper than the northern line extension. One of the reasons infrastructure is so expensive in this country is because we give up halfway through projects.
 

mwmbwls

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You can't just stop all activity on it. As the report says £25 billion has been spent on it. Miles of tunnels, numerous bridges, half a giant concrete box at OOC etc. Some of that you could leave but most you're going to have to secure and mitigate.

In the public accounts committee today it was said that stopping HS2 would need mitigation on and an unprecedented scale and nobody knows how much thar will cost. Not to mention the huge number of people you'd be making unemployed. The land sales might generate some net revenue but selling the land for 2a sounds complex enough. There'll be a cost to the process of selling that land.

HS2 is expensive but it's not untypical for an infrastructure project in this country. On a per mile basis, its about 3 times cheaper than crossrail and slightly cheaper than the northern line extension. One of the reasons infrastructure is so expensive in this country is because we give up halfway through projects.
Can I commend this Parliamentary Transport Committee hearing.
The Panel are extremely good in explaining in lay terms the implications of the decision to scrap 2A.
 

Grimsby town

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Can I commend this Parliamentary Transport Committee hearing.
The Panel are extremely good in explaining in lay terms the implications of the decision to scrap 2A.
Yes it was refreshing to hear people who actually understand what they are talking about. If 2a isn't done then something else like the Stafford Bypass will be needed. That's not going to be much cheaper than just doing 2a. It sounds like the northern powerhouse elements of 2b are planned to go ahead anyway. It begs the question why not just spend the additional £20bn and the rest of the western leg.
 

Snow1964

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The full Hansard version is now available
Basically same as initial post, but without the pretty presentation

 

Nicholas Lewis

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In the public accounts committee today it was said that stopping HS2 would need mitigation on and an unprecedented scale and nobody knows how much thar will cost. Not to mention the huge number of people you'd be making unemployed. The land sales might generate some net revenue but selling the land for 2a sounds complex enough. There'll be a cost to the process of selling that land.
This item in Construction Enquirer this morning is a debrief from the PAC yesterday and its very telling about how this project has been run

HS2’s new boss has laid the blame for massive phase 1 budget overruns on the Government’s decision to let cost-plus contracts for main civil works
He goes on further
He said: “We have to be upfront with you now, the Government decision to let cost-plus contracts where there are very few incentives or penalties around them does not provide me with any real levers on contractors to do better in relation to schedule and costs because they receive a marginal reduction in their fee.

“If they spend 100% more than what was agreed, they only get 1% reduction in their fee.”

“I can attempt to see if we can reset that in some way, but we are where we are.
This is staggering that this has been countenanced by DfT given everything the government claims to have learnt on lessons from other projects. This wasn't a novel project its relatively straightforward civil construction yet we now find out how exposed the taxpayer is.

Then we have Merrimans reports saying we dont agree with the numbers and i thought it was rather silent on the impact of dropping Phase 2 but Sir Jon puts us in the picture
Sir Jon also warned that extra cost pressures loomed with plans to connect HS2 to the West Coast Main Line through a major redesign at the Handsacre junction, already a choke point on the route.

This would need to be expanded requiring extra land and incurring extra cost, he said.
And seemingly taken till now to realise that they need to learn lessons from Crossrail
HS2 is planning to tighten management controls on budgets with the appointment in January of a Chief Railway Officer for the project. The new role will to be to integrate all elements of phase one, working alongside a new chief executive replacement for Mark Thurston.

“A lessons learnt from Crossrail is you need a single controlling mind for the programme overall, rather than working through individual lines,” said Thompson.
The standout info is that at least they have 2030 as the target opening date.
 

trebor79

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You can't just stop all activity on it. As the report says £25 billion has been spent on it.
Having wasted £25bn isn't a good reason to waste a further £75bn.
Miles of tunnels, numerous bridges, half a giant concrete box at OOC etc. Some of that you could leave but most you're going to have to secure and mitigate.
The tunnels and concrete box are easy. Put a fence and locked gate across the portals, or bury the portals the same as every other disused railway tunnel. The bridges, similarly either just leave as it or put a fence across the end to prevent access.
In the public accounts committee today it was said that stopping HS2 would need mitigation on and an unprecedented scale and nobody knows how much thar will cost. Not to mention the huge number of people you'd be making unemployed. The land sales might generate some net revenue but selling the land for 2a sounds complex enough. There'll be a cost to the process of selling that land.
The employees will find other jobs that may actually contribute to the economy. Heck, paying them dole equivalent to their current salary until they reach retirement age would be a fraction of the cost of continuing with this poorly conceived, poorly managed, unaffordable project that will never generate a positive return.
HS2 is expensive but it's not untypical for an infrastructure project in this country. On a per mile basis, its about 3 times cheaper than crossrail and slightly cheaper than the northern line extension. One of the reasons infrastructure is so expensive in this country is because we give up halfway through projects.
That's more an indictment of how ridiculously expensive it has become to build any infrastructure in this country in the past few decades. Case in point the proposed lower Thames tunnel which has cost more in surveys, consultations, planning reports etc than it has cost to build and complete a much longer sub-sea tunnel in Scandinavia (yes I know the geology is much easier there, but the point is we've spent more on paperwork thank they have on an entire, much larger, project).
 

InTheEastMids

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This is staggering that this has been countenanced by DfT given everything the government claims to have learnt on lessons from other projects. This wasn't a novel project its relatively straightforward civil construction yet we now find out how exposed the taxpayer is.
I spotted this as well, but you beat me to it. Treasury would (or at least should) have taken a really close interest in contracting strategy so must have signed this off, even though many major infrastructure players have been saying for years that this kind of approach tends to under-deliver, why we see other complex infrastructure project delivered using different models, such as alliances. Key point is that it's not OK for central government to point the finger at HS2 for mismanagement, when it's baked in from the very top.

Link to the session the Public Accounts Commitee hearing:
https://parliamentlive.tv/event/index/db679737-8743-48de-a4c2-72796accca43

The tunnels and concrete box are easy. Put a fence and locked gate across the portals, or bury the portals the same as every other disused railway tunnel. The bridges, similarly either just leave as it or put a fence across the end to prevent access.
Careful now. This is a version of Jeremy Clarkson saying "How hard can it be?" on Top Gear, then going on to find out that complex, specialist things are usually hard
(I am currently working on an infrastructure project dreamed up by people who didn't know enough to know that it would be hard).
 

Grimsby town

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This item in Construction Enquirer this morning is a debrief from the PAC yesterday and its very telling about how this project has been run


He goes on further

This is staggering that this has been countenanced by DfT given everything the government claims to have learnt on lessons from other projects. This wasn't a novel project its relatively straightforward civil construction yet we now find out how exposed the taxpayer is.

Then we have Merrimans reports saying we dont agree with the numbers and i thought it was rather silent on the impact of dropping Phase 2 but Sir Jon puts us in the picture

And seemingly taken till now to realise that they need to learn lessons from Crossrail

The standout info is that at least they have 2030 as the target opening date.
My opinion that HS2 should be built shouldn't be mistaken for me thinking it has been well run. It clearly hasn't and there has been a lot of issues. It seems like these issues have been focused on finally. Hopefully they'll be learnt from and I believe that is another reason at least 2a should be built so some of these lessons can be put into practice.

Having wasted £25bn isn't a good reason to waste a further £75bn.

The tunnels and concrete box are easy. Put a fence and locked gate across the portals, or bury the portals the same as every other disused railway tunnel. The bridges, similarly either just leave as it or put a fence across the end to prevent access.

The employees will find other jobs that may actually contribute to the economy. Heck, paying them dole equivalent to their current salary until they reach retirement age would be a fraction of the cost of continuing with this poorly conceived, poorly managed, unaffordable project that will never generate a positive return.

That's more an indictment of how ridiculously expensive it has become to build any infrastructure in this country in the past few decades. Case in point the proposed lower Thames tunnel which has cost more in surveys, consultations, planning reports etc than it has cost to build and complete a much longer sub-sea tunnel in Scandinavia (yes I know the geology is much easier there, but the point is we've spent more on paperwork thank they have on an entire, much larger, project).

For £75bn are you referring to Phase 1 or thr full Y. Phase 1 is never going to cost £75 billion more. You seem to have a rather ridiculous opinion that there are no benefits to HS2. There's clearly capacity, reliability and speed benefits to be realised if at least some of the project is built. By building none of it you get none of these benefits.

I believe you are over simplifying how easy it would be to make HS2 safe and mitigate the construction impacts. At the very least you'll be selling land off at a significant loss because a lot of it has been modified for HS2 construction.

Paying the wages of employees would be cheaper than building the project but again there'd be no benefit. There's 30,000 people working on it. There's no obvious infrastructure projects for them to find a new job so that likely means a lot of re-training or loss of specialised staff abroad. Cancelling HS2 will also increase the cost of other infrastructure projects for years to come because practically every infrastructure related company is involved in HS2 and expecting it to keep staff busy.
 
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trebor79

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Careful now. This is a version of Jeremy Clarkson saying "How hard can it be?" on Top Gear, then going on to find out that complex, specialist things are usually hard
(I am currently working on an infrastructure project dreamed up by people who didn't know enough to know that it would be hard).
How hard can it be? We have tunnels and viaducts that were built 150 years ago and have been disused for decades and they aren't any particular issue. Just seal off access. Job done.
For £75bn are you referring to Phase 1 or thr full Y. Phase 1 is never going to cost £75 billion more.
I don't believe anyone can say that with certainty. How much was the entire project supposed to cost when first conceved??

You seem to have a rather ridiculous opinion that there are no benefits to HS2. There's clearly capacity, reliability and speed benefits to be realised if at least some of the project is built. By building none of it you get none of these benefits.
There are benefits, but I do not believe that the cost benefit ratio will be greater than 1. Nor do I believe the project would have been sanctioned in te first place if the true costs had been revealed.
I believe you are over simplifying how easy it would be to make HS2 safe and mitigate the construction impacts. At the very least you'll be selling land off at a significant loss because a lot of it has been modified for HS2 construction.
OK, a relatively small loss on land sales. I'll take that.
How would an abandoned HS2 alignment and structures be any less safe than (eg) an abandoned Great Central Railway alignment and structures?
Paying the wages of employees would be cheaper than building the project but again there'd be no benefit. There's 30,000 people working on it. There's no obvious infrastructure projects for them to find a new job so that likely means a lot of re-training or loss of specialised staff abroad. Cancelling HS2 will also increase the cost of other infrastructure projects for years to come because practically every infrastructure related company is involved in HS2 and expecting it to keep staff busy.
Tough titty. Wasting another £50bn or whatever to keep 30,000 people in work on a vanity project for another decade is an exceptionally poor use of public money. Arguably HS2 cancellation would reduce prices of other infrastructure projects such as sorting out sewage overflows as there would be less competition for machinery, labour and engineers.
 

jfowkes

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The question is not how much money would be saved by cancelling HS2 Phase 1.

The WCML still needs extra capacity. So the question is would it be cheaper to cancel HS2 Phase 1 and plan an entirely new scheme to provide that, or just finish the existing project.

I suspect the answer is finish the existing project.
 

Nicholas Lewis

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My opinion that HS2 should be built shouldn't be mistaken for me thinking it has been well run. It clearly hasn't and there has been a lot of issues. It seems like these issues have been focused on finally. Hopefully they'll be learnt from and I believe that is another reason at least 2a should be built so some of these lessons can be put into practice.
Wasn't suggesting it was and the fact its so far advanced now means Phase 1 has to be completed. However, its absolutely staggering how badly this project has been run with yet again, like Crossrail, ineffective oversight from DfT despite the vast amount of costs being expended on so called professional services who have taken the Taxpayer to the cleaners. You also have to question who knows what about this project in the past and whether Thurston left because he didn't agree with matters or they forced him out because of the situation we now find ourselves in? Did Shapps suppress information being released? All in all its no wonder a rash decision was taken about Phase 2 given the facts released this week were no doubt available many weeks back.
 

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its absolutely staggering how badly this project has been run with yet again, like Crossrail, ineffective oversight from DfT

I think it illustrates how difficult it is for government departments or agencies to directly oversee the activities of a limited company. Even one where the sole shareholder is the government itself. In another part of the forest a public inquiry is slowly uncovering what looks like a criminal conspiracy carried out at another limited company which is wholly owned and was supposedly overseen by a government department. Being able to eventually find out what went wrong is not much consolation. Where the sole purpose of a business is to provide a service to the public, direct departmental oversight is essential, so in each case (Crossrail, HS2, Post Office) I question the arms length approach of the limited company model.
 

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I'm afraid there's far too much misinformation and ignorance being talked about as fact in this thread to even begin to start unpicking. However, for those who want to learn about HS2 from people who do know what they're talking bout may I recommend the 'Green Signals' podcasts by former Rail Editor Nigel Harris and his co-presenter Richard Bowker (formerly of Virgin Trains and the SRA). They have some very informative guests too - such as Prof Andrew McNaughton, the man who led the design of HS2. https://www.greensignals.org/
 

mwmbwls

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I'm afraid there's far too much misinformation and ignorance being talked about as fact in this thread to even begin to start unpicking. However, for those who want to learn about HS2 from people who do know what they're talking bout may I recommend the 'Green Signals' podcasts by former Rail Editor Nigel Harris and his co-presenter Richard Bowker (formerly of Virgin Trains and the SRA). They have some very informative guests too - such as Prof Andrew McNaughton, the man who led the design of HS2. https://www.greensignals.org/
Three of the key witnesses up before the aforementioned House of Commons Transport Committee.
 
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