More Delay for HS2, and how should we proceed?

[Meerkat]

The crunch time will be when Labour publishes its manifesto for the election.
Expect some carefully-crafted text to avoid precise commitments (like NPR reaching Bradford/Hull).

I can imagine these HS2/NPR promises might have an interesting time when they try to ensure they can claim the manifesto is fully funded.
A more sensible offer would be ‘spend xBn per year on bringing high speed rail to the north, and let people infer what they like on what that will buy.

 

[Shaw S Hunter]

That's the right way to look at it - it's politics. Labour want to get elected. Once elected, they'll have to find the money to build it and that's not going to be easy. They could cancel it then. Incidentally, this may not even be good politics. The general public isn't in favour of HS2 and thinks it's a waste of money, whatever northern politicians say.

If you believe this survey:

UK: public opinion on the HS2 rail project 2021| Statista

In November 2021, close to one fifth of survey respondents stated that they strongly opposed the UK’s HS2 high-speed rail project, while only eight percent were strongly in favor of it.

www.statista.com

then it would appear that overall the UK public isn't actually all that bothered either way. Don't be fooled by those shouting the loudest, they aren't necessarily representative of the wider population.

 

[najaB]

The general public isn't in favour of HS2 and thinks it's a waste of money, whatever northern politicians say.

Last I heard the general public were largely neutral on HS2. YouGov surveys support that notion: https://yougov.co.uk/topics/politics/trackers/support-for-high-speed-rail-hs2

 

[Nottingham59]

If you believe this survey:

UK: public opinion on the HS2 rail project 2021| Statista

In November 2021, close to one fifth of survey respondents stated that they strongly opposed the UK’s HS2 high-speed rail project, while only eight percent were strongly in favor of it.

www.statista.com

then it would appear that overall the UK public isn't actually all that bothered either way. Don't be fooled by those shouting the loudest, they aren't necessarily representative of the wider population.

Last I heard the general public were largely neutral on HS2. YouGov surveys support that notion: https://yougov.co.uk/topics/politics/trackers/support-for-high-speed-rail-hs2

Those figures are referring to the same data. lol
20% strong oppose
8% strong support
All the rest are in between somewhere.

 

[Tezza1978]

The general public isn't in favour of HS2 and thinks it's a waste of money, whatever northern politicians say.

That's a very sweeping generalisation - like some other issues opponents of HS2 are EXTREMELY vocal about it (including the fringe people that think all railways should be ripped up and the countryside tarmac-ed over)

It can't be inferred that the majority are openly highly hostile to it - opinion polls on subjects are often highly biased in terms of people who choose to fill the surveys in..... a lot of people who are lukewarm/concerned about it use the counterpoint that they want better, faster rail services east to west in the Midlands and the North. That sounds an awful lot like NPR to me. The eastern leg could be rebranded as part of that. As I've said on here before I can't see any conceivable scenario where it isnt built as far as Crewe and I'm 97-98%+ sure it will be built to Manchester.

The (future?) Labour government needs to do a much better job of persuading the public that its not possible to spend every single £ of public money on the NHS and housing the homeless ....as some of the shoutier people on news websites seem to demand is the case.

 

[Jammy Dodger]

It seems very ironic to me that the main non-economic opposition comes from the same people that want us to be come carbon neutral, and to stop using cars for everything!

a lot of people who are lukewarm/concerned about it use the counterpoint that they want better, faster rail services east to west in the Midlands and the North. That sounds an awful lot like NPR to me. The eastern leg could be rebranded as part of that.

If we ever get competent people deciding to build good quality infrastructure, there is a good chance that "Phase 2B Eastern Leg" would be rebadged as Phase 3 (A or B, dependant on how much wok gets done), and for a potential Phase 4, southwest of Birmingham (in a similar manner to what Greengauge 21 recommended with HS2 being turned into an X-shaped network).

 

[Roast Veg]

This is surely one of many promises Labour are making to rebuild the red wall? I wouldn't put much stock in it, short of accepting that further cancellations and cutbacks would be unlikely in the event of a Labour government.

 

[Meerkat]

Last I heard the general public were largely neutral on HS2. YouGov surveys support that notion: https://yougov.co.uk/topics/politics/trackers/support-for-high-speed-rail-hs2

I reckon support for ‘faster rail services in north’ would get the nod…..but if the question states how much it would cost voters will start thinking how many potholes/nurses/hospitals/teachers/etc that would sort out.

 

[fishwomp]

I reckon support for ‘faster rail services in north’ would get the nod…..but if the question states how much it would cost voters will start thinking how many potholes/nurses/hospitals/teachers/etc that would sort out.

.. longer rail services would get a bigger nod.

Knocking 5 minutes off a 30-45 minute full-and-standing journey versus sat down ... I know what I'd pick.

 

[Mikey C]

That's the right way to look at it - it's politics. Labour want to get elected. Once elected, they'll have to find the money to build it and that's not going to be easy. They could cancel it then. Incidentally, this may not even be good politics. The general public isn't in favour of HS2 and thinks it's a waste of money, whatever northern politicians say.

And the decision might not be cancellation, and rather just extending the timescale.

After all, work on any Eastern leg to Leeds won't start until well after the next but one General Election

 

[D365]

I reckon support for ‘faster rail services in north’ would get the nod…..but if the question states how much it would cost voters will start thinking how many potholes/nurses/hospitals/teachers/etc that would sort out.

It’s that age-old matter that HS2 is funded against future income. The same business case isn’t available for funding of those other sectors.

 

[Meerkat]

It’s that age-old matter that HS2 is funded against future income. The same business case isn’t available for funding of those other sectors.

Still comes out the borrowing limits though??

 

[hwl]

Still comes out the borrowing limits though??

Construction wise it does indeed and the HMT all sector infrastructure spend limit is actually the key criteria, which is effectively maxed out for the next 4-5 years hence the HS2 and other project "right shifting" at the moment due to inflation.
So a new government in the future would either have to:
a) increase the limit (More direct government Nuclear new build support for Sizewell C has effective changed the landscape given smaller/zero foreign government support in the future) and/or
b) spread out spending over longer periods (what is currently happening) and/or
c) get local authorities to do more infrastructure works and finance them (TfL, TfGM etc.) and/or
d) PFI or equivalent (accounting rules have change since the last time on this so it is less attractive to government)

In practical terms schemes take along time to plan, design and approve to the spade ready stage hence extra large scheme construction spend has no chance of happening before 2028 (even if there was room below the limit.) Hence the grander NPR scope and HS2 East approval would be about re-election in 2030.

So what could an new Labour government post 2025 get for quicker delivery:
1) existing schemes in the pipeline
i) TRU
ii) MML electrification
iii) final approval of HS2B and the start of a slow spread out construction period (cash flow) to show something is happening

2 NPR scope
i) take forwards existing DfT NRP proposals which will be much more developed over the next 2 years or
ii) start again in places with new bigger scope

3) Bring forwards some quicker to spade ready more local schemes that would be element of NPR (or similar regional brandings elsewhere), again aim for spade in the ground in 2029 before 2030 election, progress could be suitable slow):
eg electrify as follow on schemes to TRU/MML:
Hull
Post MML Sheffield - Moorthrorpe gap
Calder Valley
Significant route upgrade and electrification
Bradford Interchange move etc. and electrify Leeds - Halifax - (Calder Valley)

 

[LNW-GW Joint]

It's actually the lie to the notion that spend on HS2 does not impact on spend on the classic network.
For a decade or so, the budgets have been separate with spend on each in parallel.
HS2 was notionally an extension of Crossrail spend at approximately the same level - and indeed HS2 has ramped up as Crossrail wound down.
But the Integrated Rail Plan and its £96 billion cap is for all major enhancement work on the railways, so effectively classic upgrades are hostage to HS2 overspend.
Many HS2 contracts were let pre-inflation-crisis (eg early tunnelling), so will have some cost protection, but the unlet contracts (track, signalling etc) will suffer the ravages of inflation.
One just hopes HS2 management is up to the task of cost control, for the sake of the whole railway.

 

[Greybeard33]

It’s that age-old matter that HS2 is funded against future income. The same business case isn’t available for funding of those other sectors.

Cancelling new hospitals and schools means that existing inefficient, decaying buildings have to be heated and patched up for longer, increasing future current account expenditure compared with that which would be required for the new buildings. So the business case is in fact very similar to that of a new railway - invest now to save in the future.

 

[Meerkat]

Cancelling new hospitals and schools means that existing inefficient, decaying buildings have to be heated and patched up for longer, increasing future current account expenditure compared with that which would be required for the new buildings. So the business case is in fact very similar to that of a new railway - invest now to save in the future.

That isnt the same - you are comparing renewal and enhancements.

The answer of course is getting private money in. Its what the ROSCOs do, replace capital investment with operating costs.

 

[najaB]

The answer of course is getting private money in. Its what the ROSCOs do, replace capital investment with operating costs.

The only question is how that private money is obtained.

 

[Meerkat]

The only question is how that private money is obtained.

Various investment entities have a lot of cash they need to invest relatively safely in return for steady cash streams.
Why did the Evergreen concept fail - weren't they originally going to get it financed and built in return for track charges?

 

[najaB]

Various investment entities have a lot of cash they need to invest relatively safely in return for steady cash streams.

So bonds then, like the good old days before high return venture capitalism became all the rage.

 

[Meerkat]

So bonds then, like the good old days before high return venture capitalism became all the rage.

I‘m not sure you mean venture capitalism , which is all about start ups (though does Rock Rail count as a start up??). But no, I don’t really mean bonds, I’m thinking more of the investment funds created by insurance and pension companies - the sort that build and own shopping centres and office blocks, or own HS1.

 

[Gerald Fiennes]

I‘m not sure you mean venture capitalism , which is all about start ups (though does Rock Rail count as a start up??). But no, I don’t really mean bonds, I’m thinking more of the investment funds created by insurance and pension companies - the sort that build and own shopping centres and office blocks, or own HS1.

If Rock Rail is a start up, then I'm Charlie's Aunt (as the old saying goes!)

 

[Meerkat]

If Rock Rail is a start up, then I'm Charlie's Aunt (as the old saying goes!)

I’m not sure there is really a definition of a start up, but AIUI Rock Rail is a new finance raising model with few staff???

 

[najaB]

I‘m not sure you mean venture capitalism , which is all about start ups (though does Rock Rail count as a start up??). But no, I don’t really mean bonds, I’m thinking more of the investment funds created by insurance and pension companies - the sort that build and own shopping centres and office blocks, or own HS1.

I do mean venture capitalism. The point I was making is that it used to be seen as normal for people to invest for long-term gain. It was only from the 80s "Greed is good" era that the pursuit of short-term gains to the exclusion of all other considerations became fashionable.

 

[HSTEd]

That isnt the same - you are comparing renewal and enhancements.

The answer of course is getting private money in. Its what the ROSCOs do, replace capital investment with operating costs.

In other words, a giant PFI.

The problem is that PFIs don't actually improve the governments financial position. The bond markets still count them as debt because they effectively are (since the Government can't realistically get out of the payments) - just debt that is obtained unnecessarily expensively.

The only purpose of a PFI is to allow the Treasury, and thus the Government, to lie to the public about the state of the public finances.

In summary, a billion pounds a year paying off gilts issued for construction costs is equivalent to a billion pounds a year to a PFI rail infrastructure operator. Nothing real is gained by implementing such structures.

 

[Meerkat]

In other words, a giant PFI.

The problem is that PFIs don't actually improve the governments financial position. The bond markets still count them as debt because they effectively are (since the Government can't realistically get out of the payments) - just debt that is obtained unnecessarily expensively.

The only purpose of a PFI is to allow the Treasury, and thus the Government, to lie to the public about the state of the public finances.

In summary, a billion pounds a year paying off gilts issued for construction costs is equivalent to a billion pounds a year to a PFI rail infrastructure operator. Nothing real is gained by implementing such structures.

Not necessarily for railways. AIUI PFIs are for hospitals and such like, where there isnt a cash benefit. If the private borrowing is paid off by track charges funded largely by train fares I don't reckon it would count as public debt unless the government guaranteed it (or possibly if it was mainly used by Northern so most of the income is from the taxpayer).

I do mean venture capitalism. The point I was making is that it used to be seen as normal for people to invest for long-term gain. It was only from the 80s "Greed is good" era that the pursuit of short-term gains to the exclusion of all other considerations became fashionable.

When has venture capitalism ever been involved in the railways? ROSCOs and infrastructure will be funded by long term investors such as pension funds.

 

[najaB]

When has venture capitalism ever been involved in the railways? ROSCOs and infrastructure will be funded by long term investors such as pension funds.

The only reason that they've not been involved yet is because the nature of railways and other infrastructure is small returns over a long period. Which means that they aren't sexy.

Just wait until someone promises to make a fortune running EasyJet on rails.

 

[Meerkat]

The only reason that they've not been involved yet is because the nature of railways and other infrastructure is small returns over a long period. Which means that they aren't sexy.

Just wait until someone promises to make a fortune running EasyJet on rails.

Lumo is the nearest to EasyJet ? But no one thinks there is a fortune to be made on the railways.

 

[LNW-GW Joint]

HS2 has awarded the first contract for trackwork, covering 180 switches and crossings for Phase 1 and 2a (Euston-Crewe), to voestalpine Turnout Technology UK Ltd.
Maximum speed for crossovers will be 230km/h (143mph).
Four more track contracts are in the pipeline.

HS2 awards contract to supply track switches and crossings to voestalpine

HS2 Ltd today awarded a contract to deliver track switches and crossings for Phase One and 2a of the UK’s new high speed railway to voestalpine Turnout Technology UK Ltd.

mediacentre.hs2.org.uk

Voestalpine is essentially an Austrian specialist steel manufacturer based in Linz.
There is no indication where the switches and crossings will be built.
Installation must be at least 5 years away, presumably on Phase 1.
The main complexity will be around Old Oak Common and the Delta junction east of Birmingham,
The main plain-line track contracts will no doubt be scrutinised for UK content, considering the current problems of the UK steel industry.
s far as I can see, this is the first major contract to cover the whole authorised route to Crewe, rather than Phase 1 alone.

 

[dosxuk]

BBC reporting that Birmingham - Manchester to be delayed - https://www.bbc.co.uk/news/business-64901985

The government is set to announce that construction of certain sections of HS2 will be delayed to save money, the BBC understands.

It is thought the delay will primarily affect sections from Manchester to Crewe and Birmingham to Crewe.

But sources have also indicated that some of the design teams working on the Euston end of the line may be affected.

Contractors are looking at whether they need to redeploy staff working on that site.

 

[sprite]

The government is set to announce that construction of certain sections of HS2 will be delayed to save money, the BBC understands.
It is thought the delay will primarily affect sections from Manchester to Crewe and Birmingham to Crewe.
But sources have also indicated that some of the design teams working on the Euston end of the line may be affected.
Contractors are looking at whether they need to redeploy staff working on that site.

HS2 line between Birmingham and Crewe delayed by two years

Government blames soaring construction prices but says it is "committed" to the high speed rail link.

www.bbc.co.uk

As I kinda expected, it's definitely going to Birmingham and likely never any further.