HS2 Review ongoing

[deltic]

That is a key part of the problem - costs were not correctly calculated in the first place. The latest "inflated figures" are ones provided by HS2's own Chairman.

"Allan Cook, the new chairman of HS2 who took over in December last year, has written to Bernadette Kelly, permanent secretary at the Department for Transport, to warn that the entire rail project cannot be completed for the official £56bn budget. Mr Cook’s preliminary findings predict the final cost of building the line could now rise to between £70bn and £85bn, according to two people close to the HS2 project." - quote from Financial Times

 

[AM9]

That is a key part of the problem - costs were not correctly calculated in the first place. The latest "inflated figures" are ones provided by HS2's own Chairman.

"Allan Cook, the new chairman of HS2 who took over in December last year, has written to Bernadette Kelly, permanent secretary at the Department for Transport, to warn that the entire rail project cannot be completed for the official £56bn budget. Mr Cook’s preliminary findings predict the final cost of building the line could now rise to between £70bn and £85bn, according to two people close to the HS2 project." - quote from Financial Times

So why can't those wishing to lambast the project here share the eveidence behind the claims to enable a sensible discussion. Without such information, the merits of continuing/descoping/cancelling can't be discussed here with any credibility. Just repeating the media's opportunistic sensationalist headlines based on rumour and wishful thinking is a fatuous waste of the forum's considerable resource, (note: this thread is not in the speculation or trivia category). HS2 is a very significant event in UK rail terms.

 

[DarloRich]

A number of enthusiasts seem quite relaxed about the slippery slope that we are heading down here... if the Government decide that a project can and should be cancelled if it goes above budget then that creates a rather dangerous precedent for future projects.

Sure - you might be perfectly relaxed about HS2 being cancelled because it's focussed on the three largest urban conurbations in the country and most enthusiasts are only really interested in (a) directly improving their own local line and (b) re-openings that follow some Victorian alignment... so I fully appreciate why HS2 is relatively unloved even amongst the enthusiast community... but if the Government are fine to scrap any project that is a combination of...

• badly planned at first
• goes over-budget
• ends up seeing contacts re-tendered part way through a build that takes several years (especially given the instability in the construction industry, the problems experienced by a few groups of contractors)

...then that's a wind which is going to cause many rail schemes to be cancelled - apparently it's easy to criticise the way that HS2 has been delayed and gone over budget whilst ignoring the way that other (conventional) projects did - e.g. should we have cancelled GWML electrification, the Borders railway and the building of pretty much every new station? Because if rising prices and delays are acceptable reasons to swing the axe on any project then be careful what you wish for...

A very sensible posting.

 

[Railwaysceptic]

So why can't those wishing to lambast the project here share the eveidence behind the claims to enable a sensible discussion. Without such information, the merits of continuing/descoping/cancelling can't be discussed here with any credibility.

Possibly because the details have not yet been made public? Mr. Cook has warned that the project cannot be completed for the original sum. He has not yet provided detailed calculations, so how can internet enthusiasts be expected to quote exact figures?

 

[Roast Veg]

Since the cost estimates come from private entities looking to win the contracts, then subsequently calling for more money after the contract award and expecting the governemnt to pay up - how do we ensure that contracts are priced realistically? The government doesn't want to pressure the industries into working for nothing out of financial insolvency fears, and the possibility of a state run construction organisation would slice very badly with competition laws and likely not deliver value for money. I don't think there is a solution beyond actually paying what it ends up costing or never investing in infrastructure at all...

 

[matacaster]

A number of enthusiasts seem quite relaxed about the slippery slope that we are heading down here... if the Government decide that a project can and should be cancelled if it goes above budget then that creates a rather dangerous precedent for future projects.

Sure - you might be perfectly relaxed about HS2 being cancelled because it's focussed on the three largest urban conurbations in the country and most enthusiasts are only really interested in (a) directly improving their own local line and (b) re-openings that follow some Victorian alignment... so I fully appreciate why HS2 is relatively unloved even amongst the enthusiast community... but if the Government are fine to scrap any project that is a combination of...

• badly planned at first
• goes over-budget
• ends up seeing contacts re-tendered part way through a build that takes several years (especially given the instability in the construction industry, the problems experienced by a few groups of contractors)

...then that's a wind which is going to cause many rail schemes to be cancelled - apparently it's easy to criticise the way that HS2 has been delayed and gone over budget whilst ignoring the way that other (conventional) projects did - e.g. should we have cancelled GWML electrification, the Borders railway and the building of pretty much every new station? Because if rising prices and delays are acceptable reasons to swing the axe on any project then be careful what you wish for...

... Of course if you are saying that the project should go ahead regardless of cost, then its a complete waste of time and money doing any estimating and budget control at all!

 

[matacaster]

The main issue is that (even ignoring the fact that the spend is due to be repaid through extra taxes/ticket sales/lower government costs/etc.) is that once you've spent it at one point you can't spend it again later.

Let's say you wish to spend 30bn on the NHS (it doesn't matter what it is, I'm just using that as an example).

Over what timeframe is that spending over?

1 year would be great, but you couldn't spend it on extra staff as they would only be employed for a year, you could use it to invest in buildings so that they are cheaper to run. However the benefits are likely to be limited.

5 years then? Well that's no good as that's just before an election before the spending needs to be cut, so you'd better make it 8 to be sure that you are into the next parliament before it's a problem. However that's now less than £4bn a year in an NHS budget of ~£115bn a year, so that's not going to make a big difference. It also means that if you get elected next time you'd better have a funding source to keep those costs going.

Then you have the problem that if you do cut HS2 when there really are no seats in a train which would have benefited from HS2 and an opposition party leader has to stand/sir in the floor?

You'll want to be sure that's not going to be a potential problem otherwise you're going to have to answer some awkward questions. As such you are going to have to keep some to invest in the railways (so you can point at that), so what schemes can you pull out of the hat and what do they cost? (Hence the reason for £30bn above rather than £56bn as you'll need the rest for this).

Chances are there's an idea of what's expected; probably scaled back to London to Birmingham or Crewe. Look we've "saved" all this money. Kick the can down the road until after the next election and then "realise" that you need to get to Manchester because of the growth and that you wouldn't be able to run any more trains/longer trains (except for a few around Birmingham). You then announce that it's going to reach Manchester "early" in 2030 rather than 2033.

Depending on how hard it is to win seats in the East Midlands, you may have to include a bit of a spur towards there to provide faster journey times and some extra capacity to/from Birmingham. Probably with some promise to look at future investment to improve things further.

Alternatively you look at the land you've already purchased and announce a new toll motorway along the route, reaching right into the heart of Birmingham and London, then build a large car park at Curzon Street & Euston with the land you've got there. Sell said car parks for a lot of money to recover some of the costs.

"Then you have the problem that if you do cut HS2 when there really are no seats in a train which would have benefited from HS2 and an opposition party leader has to stand/sir in the floor?!"

... It'll be several years before any Govt minister has to stand up and say there's a capacity problem. Likely as much as two Parliaments and then its the other lot who will try to say it was that lots fault 10 years ago - doesnt really work, especially since HS2 likely wont be finished the as all big projects overrun (and Phase 2A and B wouldn't be finished anyway. Another problem is that until HS2 is built people will HAVE to cope, if indeed there is this capacity issue, so no Govt in the short term will get too much stick.

 

[AM9]

Possibly because the details have not yet been made public? Mr. Cook has warned that the project cannot be completed for the original sum. He has not yet provided detailed calculations, so how can internet enthusiasts be expected to quote exact figures?

There have been countless posts about HS2 costs 'spiralling out of control' and other hyperbolic reactions, there have been regular quotes of "it will cost £80/100/150/200BN"* and for increasingly smaller parts of the total project, yet nobody has justified any of those figures so they are pushing a fatuous supposition. This whole thread has become a whinge magnet for 'those who don't see HS2 benefitting themselves, ergo nobody should benefit' mentality.

* insert appropriate guess

 

[tbtc]

We certainly should not be relaxed by the number of rail schemes that end up way over budget.

Costing needs to be radically improved in the industry otherwise schemes will not be approved in the first place.

Crossrail cost overruns and delays have certainly impacted on the willingness to proceed with Crossrail 2 while HS2 cost overruns are certainly not helping the case for transpennine improvements.

Escalating costs for East West Rail has meant what should have been a no brainier for Oxford - Bedford section, being descoped and making very slow progress. The chances of ever getting to Cambridge are steadily diminishing.

I agree - we should be better at controlling the costs of these schemes - the ever-increasing costs are limiting the scope for future projects - we've already seen descoping or cancellation of some projects due to the GWML overspend (e.g. the MML electrification not going further north than Corby) - I don't know what needs to be done though.

Politically, I thought that a state-run infrastructure provider would be better than Railtrack, but someone somewhere needs to start controlling costs because if they don't then HS2 won't be the last investment that is cancelled.

... Of course if you are saying that the project should go ahead regardless of cost, then its a complete waste of time and money doing any estimating and budget control at all!

True, but I didn't think that I was saying that everything should always happen regardless of cost. I'm just of the belief that the criticisms levelled against HS2 need to be seen in the context of other projects.

Obviously when you plan a project that takes many years to deliver, there are some costs that can only be estimated (and this will be harder to control in a scheme that involves new technologies or where no comparable thing has been built/delivered in recent years). But a lot of the criticism of HS2 seems unfair when people are happy to ignore the same increasing costs/ delays/ descoping on other projects.

For example, I haven't seen anyone suggesting that we cancelled the Chase electrification - despite the fact that it was only around a dozen miles from the WCML to Walsall but took around six years to do and the costs went up significantly (because people hadn't considered the problems of electrification masts on former coalfield land?).

But that was fine - shrugged off - these things happen - nobody complained that it the electrification shouldn't be finished - I didn't see anyone bitterly point out that Chase electrification was a waste of time because it didn't benefit passengers in Plymouth (or whatever other sticks that HS2 is bashed with). Similarly, nobody said that there was no point investing in the Chase line because "passenger numbers have already peaked, we'll all be working digitally in a few years time, we should spend the money on better broadband" etc etc. And even the argument that "why should we be spending all this money on improved services just so someone from Rugeley can arrive in Birmingham a few minutes earlier"

As usual on here, there's one set of rules for HS2 and a different set of rules for the "conventional" network - people seem happy to damn HS2 for things (delays, increased budgets, not benefitting other parts of the country etc) that they are happy to ignore when it comes to other lines (I mentioned the Chase route but could equally have mentioned any of a number of recent schemes that have gone over budget/ been delayed/ had to be de-scoped to save cash).

 

[The Ham]

"Then you have the problem that if you do cut HS2 when there really are no seats in a train which would have benefited from HS2 and an opposition party leader has to stand/sir in the floor?!"

... It'll be several years before any Govt minister has to stand up and say there's a capacity problem. Likely as much as two Parliaments and then its the other lot who will try to say it was that lots fault 10 years ago - doesnt really work, especially since HS2 likely wont be finished the as all big projects overrun (and Phase 2A and B wouldn't be finished anyway. Another problem is that until HS2 is built people will HAVE to cope, if indeed there is this capacity issue, so no Govt in the short term will get too much stick.

I don't doubt that it'll be several years before a government minister will stand up and say there's a capacity problem. What I said was that an opposition leader could do.

I could certainly see a Labour Leader or a Labour Shadow Transport Minister standing up and highlighting the problem given that:
a) they started the HS2 project
b) they didn't start the review process
c) they weren't in power when it was cancelled

As such there's scope to use HS2 to beat the Tory Party if the do cancel it.

Anyway you wouldn't need it to be lots of services to be full for this to come to prominence.

 

[The Ham]

I agree - we should be better at controlling the costs of these schemes - the ever-increasing costs are limiting the scope for future projects - we've already seen descoping or cancellation of some projects due to the GWML overspend (e.g. the MML electrification not going further north than Corby) - I don't know what needs to be done though.

Politically, I thought that a state-run infrastructure provider would be better than Railtrack, but someone somewhere needs to start controlling costs because if they don't then HS2 won't be the last investment that is cancelled.



True, but I didn't think that I was saying that everything should always happen regardless of cost. I'm just of the belief that the criticisms levelled against HS2 need to be seen in the context of other projects.

Obviously when you plan a project that takes many years to deliver, there are some costs that can only be estimated (and this will be harder to control in a scheme that involves new technologies or where no comparable thing has been built/delivered in recent years). But a lot of the criticism of HS2 seems unfair when people are happy to ignore the same increasing costs/ delays/ descoping on other projects.

For example, I haven't seen anyone suggesting that we cancelled the Chase electrification - despite the fact that it was only around a dozen miles from the WCML to Walsall but took around six years to do and the costs went up significantly (because people hadn't considered the problems of electrification masts on former coalfield land?).

But that was fine - shrugged off - these things happen - nobody complained that it the electrification shouldn't be finished - I didn't see anyone bitterly point out that Chase electrification was a waste of time because it didn't benefit passengers in Plymouth (or whatever other sticks that HS2 is bashed with). Similarly, nobody said that there was no point investing in the Chase line because "passenger numbers have already peaked, we'll all be working digitally in a few years time, we should spend the money on better broadband" etc etc. And even the argument that "why should we be spending all this money on improved services just so someone from Rugeley can arrive in Birmingham a few minutes earlier"

As usual on here, there's one set of rules for HS2 and a different set of rules for the "conventional" network - people seem happy to damn HS2 for things (delays, increased budgets, not benefitting other parts of the country etc) that they are happy to ignore when it comes to other lines (I mentioned the Chase route but could equally have mentioned any of a number of recent schemes that have gone over budget/ been delayed/ had to be de-scoped to save cash).

There's also my favourite argument:

HS2 doesn't do X, X is needed, so we'd better not have HS2.

When Reading station/junction was being done it wasn't insisted that it should also electrify the area. That was a separate project.

 

[LNW-GW Joint]

I wouldn't bet on anything on HS2 being announced in the current febrile political atmosphere.
If an election is called there will be no parliament to inform for 6 weeks or so, and the government will be in "purdah".

 

[RealTrains07]

With HS2 delayed, how would that affect the West Coast Partnership? Since they wont be taking control of it from 2026 as planned

 

[33Hz]

Only when the trains actually run at speeds over 300 or 320km/h. The alignment would have a very slightly larger landtake, but the smoother path would reduce the maintenance (and possibly energy) requirements of 300km/h running trains.

From http://www.greengauge21.net/wp-content/uploads/SYSTRA-Factors-affecting-HSR-carbon-impacts.pdf we have the energy use of a 200 metre AGV:

320 km/h uses 16.07 kWh/km
400 km/h uses 23.92 kWh/km

As they can have up to 510 seats, even at 250 mph or 400 km/h that's 47 Wh / seat-km. In the UK that currently equates to <10 gCO2 / seat-km.

That's the equivalent of 4 people in an electric car driving at 70 mph or 110 km/h. It's still less than 10x that of a domestic flight. The whole "HS2 is not green" thing is more propaganda from the anti crowd.

 

[mrmatt]

When people are quoting new figures I assume they are talking 2019 prices? Assuming they are then the £56.6b budget (2014 prices) would already be ~£63b in 2019 prices. It is still over budget if the numbers are to be believed but it seems a bit disingenuous if they are ignoring the inflationary effects on the previously quoted budget.

 

[The Ham]

When people are quoting new figures I assume they are talking 2019 prices? Assuming they are then the £56.6b budget (2014 prices) would already be ~£63b in 2019 prices. It is still over budget if the numbers are to be believed but it seems a bit disingenuous if they are ignoring the inflationary effects on the previously quoted budget.

Also had there been any project creep since 2014? Such as electrification of part of the MML.

 

[Chrisgr31]

When people are quoting new figures I assume they are talking 2019 prices? Assuming they are then the £56.6b budget (2014 prices) would already be ~£63b in 2019 prices. It is still over budget if the numbers are to be believed but it seems a bit disingenuous if they are ignoring the inflationary effects on the previously quoted budget.

This is one of the biggest problems. We spend years arguing about the route, what bits we are going to tunnel etc and the delay just adds to the cost. There are so many variables with one of the biggest being land cost which cannot be accurately forecast.

 

[LNW-GW Joint]

With HS2 delayed, how would that affect the West Coast Partnership? Since they wont be taking control of it from 2026 as planned

The franchise agreement after HS2 opens is, for the time being, just a management contract (ie no financial liability on the franchisee).
So a delay/cancellation just reverts the contract to a regular WCML franchise, with maybe a direct award from 2026 until HS2 opens or 2031, whichever comes first.
What the "Partnership" actually means (eg tie-ups with Network Rail or HS2 Ltd) we have yet to find out.

 

[The Ham]

This is one of the biggest problems. We spend years arguing about the route, what bits we are going to tunnel etc and the delay just adds to the cost. There are so many variables with one of the biggest being land cost which cannot be accurately forecast.

Not only that but the sooner we get on with building it the dinner that we can start running revenue earnimg services

 

[Railwaysceptic]

There have been countless posts about HS2 costs 'spiralling out of control' and other hyperbolic reactions, there have been regular quotes of "it will cost £80/100/150/200BN"* and for increasingly smaller parts of the total project, yet nobody has justified any of those figures so they are pushing a fatuous supposition. This whole thread has become a whinge magnet for 'those who don't see HS2 benefitting themselves, ergo nobody should benefit' mentality.

So what? You didn't ask why people post opinions you don't like. You asked why they don't "share the evidence" which supports their opinions.

 

[AM9]

So what? You didn't ask why people post opinions you don't like. You asked why they don't "share the evidence" which supports their opinions.

So it seems that you are implying is that those complaining because 'they' don't want HS2, use the hostile media's baseless exaggerations as facts, and don't really want to enter into any meaningful debate. That's their choice but it doesn't further knowledgee much.

 

[Railwaysceptic]

So it seems that you are implying is that those complaining because 'they' don't want HS2, use the hostile media's baseless exaggerations as facts, and don't really want to enter into any meaningful debate. That's their choice but it doesn't further knowledgee much.

I'm not implying anything. I find most assertions made in this forum about HS2 specious. As for furthering knowledge, we need firm, reliable facts and until we have them, most debate will be mere speculation.

 

[33Hz]

What funding would HS2 have received from the EU as a TEN-T route?

 

[quantinghome]

When people are quoting new figures I assume they are talking 2019 prices? Assuming they are then the £56.6b budget (2014 prices) would already be ~£63b in 2019 prices. It is still over budget if the numbers are to be believed but it seems a bit disingenuous if they are ignoring the inflationary effects on the previously quoted budget.

Construction inflation is generally higher than general inflation, so the figure will be higher.

 

[700007]

BBC News are reporting that HS2 is to be delayed up to 5 years according to Grant Shapps, and will be over budget:

https://www.bbc.co.uk/news/business-49563549

BBC says:
Phase one of the HS2 high-speed railway between London and Birmingham faces a delay of up to five years, Transport Minister Grant Shapps has said.

The London to Birmingham stage was due to open at the end of 2026, but it could now be 2028-2031 before the first trains run on the route.

Mr Shapps said HS2's cost had risen from £62bn to between £81bn and £88bn.

The second phase to Manchester and Leeds was due to open in 2032-33, but that has been pushed back to 2035-2040.

HS2 chairman Allan Cook warned about the overspend while preparing a review of the project's cost and schedule.

Mr Cook, who started his role in December, told the Department for Transport last month that the scheme could not be delivered within its budget.

In July, Meg Hillier, chairwoman of the Public Accounts Committee, cast doubts on the 2026 opening target, calling it "unrealistic".

Earlier this month, the government said it planned to review the costs and benefits of the rail project, with a "go or no-go" decision by the end of the year.

"I want the House to have the full picture. There is no future in obscuring the true costs of a large infrastructure project - as well as the potential benefits," said Mr Shapps.

 

[LNW-GW Joint]

It's probably a good day to bury bad news...

The text of the statement to parliament is on the DfT web site: https://www.gov.uk/government/speeches/hs2-update-3-september-2019

Regarding schedule, the Chairman does not believe the current schedule of 2026 for initial services on Phase One is realistic. In line with lessons from other major transport infrastructure projects, his advice proposes a range of dates for the start of service. He recommends 2028 to 2031 for Phase One - with a staged opening, starting with initial services between London Old Oak Common and Birmingham Curzon Street, followed by services to and from London Euston later. He expects Phase 2b, the full high-speed line to Manchester and Leeds, to open between 2035 and 2040.

This is the advice of the Chairman of HS2 Ltd, and is not any kind of decision on the future of the project.
Until the Okervee review completes with advice to Grant Shapps, the current enabling work will continue.
HS2 Ltd believes Phase 2a (Lichfield-Crewe) can be delivered on the same timescale as Phase 1 (London-Birmingham/Lichfield).
About £10 billion of the cost increase is due to the rebaselining of the costs from 2015 to 2019, so is only a "paper" increase.

 

[Ianno87]

Alan Cook's advice ("Stocktake") can be found at http://qna.files.parliament.uk/ws-attachments/1143972/original/HS2 Chairman's Stocktake Final Issue.pdf

Won't try and quote the whole Executive Summary, but this is interesting:

Equally, the existing cost/benefit model, which was designed for smaller scale schemes, has proved inadequate in capturing the full transformational effect of HS2, particularly on changing land values. This transformation is already being demonstrated in Birmingham. Therefore, the budget and target schedule for the programme have proved unrealistic, while at the same time the benefits have been understated.

 

[LNW-GW Joint]

Having skim-read the "Stocktake", I didn't see any "magic bullets" of cost reduction that were being considered.
There has been speculation about maximum speed, tunnel dimensions, sleepered base rather than slab track etc.
But as far as I can see there is no debate about reducing the spec for the line - although there is a good deal of sensitive text redacted, presumably costings.
It's also mentioned that European comparisons for high speed railway construction don't really work in the UK (without saying why).
Part of the timescale extension appears to be because they want to leave the bare route solum for longer, for stabilisation, before laying the slab track base on top.

It also looks like we will have to add 5 years to the length of the West Coast Partnership franchise, on which last week's signature is still wet.
The Pendolinos will also have to keep going for another 5 years as well.

 

[Ianno87]

Having skim-read the "Stocktake", I didn't see any "magic bullets" of cost reduction that were being considered.
There has been speculation about maximum speed, tunnel dimensions, sleepered base rather than slab track etc.

Again, re-enforces the argument that, once the cost of building a new line is incurred, the extra cost of souping it up to be high speed is relatively little; pursuing such things as a magic bullet is dancing on a pinhead.

 

[adamello]

HS2 railway to be delayed by up to five years

https://www.bbc.co.uk/news/business-49563549

The first phase of the HS2 high-speed railway between London and Birmingham will be delayed by up to five years, Transport Minister Grant Shapps says.

The first phase was due to open at the end of 2026, but it could now be between 2028 and 2031 before the first trains run on the route.

Mr Shapps said HS2's cost had risen from £62bn to between £81bn and £88bn.

The second phase to Manchester and Leeds was due to open in 2032-33, but that has been pushed back to 2035-2040.

Mr Shapps' statement was based on a report from the chairman of HS2, Allan Cook, which concluded that the new railway could not be delivered within the current budget.

"I want the House to have the full picture. There is no future in obscuring the true costs of a large infrastructure project - as well as the potential benefits," said Mr Shapps.

Mr Cook's report comes ahead of a government decision on whether HS2 will go ahead at all. Last month, the the government said it planned to review the costs and benefits of the rail project, with a "go or no-go" decision by the end of the year.

Originally expected to cost £56bn in 2015 prices, Mr Cook said the new cost estimate was adjusted for inflation, and based on today's prices.

Mr Cook, who started his role in December, had already warned about the overspend while preparing a review of the project's cost and schedule.

He told the Department for Transport last month that the scheme could not be delivered within its budget.

"The budget and target schedule for the programme have proved unrealistic, while at the same time the benefits have been understated," Mr Cook said.

Concerns that rising costs and delays could threaten the viability of HS2 are not new. Documents seen by the BBC last month, showed that both the government and HS2 knew the new high speed railway was over budget and probably behind schedule years ago.

In July, Meg Hillier, chairwoman of the Public Accounts Committee, cast doubts on the 2026 opening target, calling it "unrealistic".