4 October, 2023
i News, by Hamish McRae
It is of course deeply embarrassing. The cutting back of the HS2 rail link is embarrassing for the Government, but more than that, for the country.
Whatever view you take about the wisdom of this latest decision, the facts are that the project is vastly over budget and will be delivered many years late. It is a particularly harsh example of the difficulty the UK has in delivering big infrastructure projects and raises the tough question: why does it cost so much more to build a railway in Britain than it does almost anywhere else in the world?
A British problem
This obviously matters because we have to pay for these projects one way or another, either in higher fares or higher taxation. But it matters for another reason. Economists call it “opportunity cost”, which means you have to consider the cost of the other projects that can’t be done because so much resource in money and construction capacity is going into HS2.
As we reported this week, the costs of the entire project, including the links to Manchester and Leeds, were estimated at £56.7bn in 2013. But that is almost as much as the likely cost of the first phase to Birmingham, at £53bn, with the overall project being deemed by the Government’s Infrastructure and Projects Authority as “unachievable”. Most recent estimates of the total cost range close to £100bn.
Even if the 2013 estimate had been right, the 134 miles of track between London and Birmingham would have cost £165m a mile, nearly four times the cost per mile of France’s line between Tours and Bordeaux.
A study by Sam Dumitriu and Ben Hopkinson at the campaigning group Britain Remade highlighted several other areas where UK costs were out of line with anything in continental Europe or Japan.
Take tunneling for urban underground lines. The average cost in the UK in London is £676m per mile, but in Spain it’s £113m, Germany £227m, France and Italy £345m, and Japan £372m. Madrid managed to build an entire 81 mile underground for £61m a mile, nine times cheaper per mile than the Jubilee Line extension.
Only in Canada at £717m a mile, and the US (actually New York) at an astounding £1,247m a mile, are costs higher than here.
Take trams too. In French provincial cities, the cost per mile has varied from £29m to £60m. In the UK, the cost ranges from £66m a mile in Nottingham to £113m for the Edinburgh airport link, through to £252m a mile for Manchester’s Second City Crossing in 2017.
The planning process
So what is the explanation? First, some general points, and then some specific to HS2. You would expect costs to be relatively high in the UK because England has one of the highest densities of population in the world: 425 people per square kilometre, about the same as the Netherlands. (The UK average is pulled down by lower densities in Scotland and Wales.)
We also have tight, though maybe not so well designed, planning and environmental restrictions, which in part are a function of these high densities. Keeping a place nice when you have to cope with a lot of people requires careful planning. You have to push against sprawl, and in the case of railways there is a strong incentive to use tunnelling rather than demolishing homes.
Projects have to be redesigned to meet objections. The planning process for the new Lower Thames Crossing is a good example of that. The original plan of National Highways had to be withdrawn because the Planning Inspectorate’s demands for more information.
The result? The whole process has cost £247m – the taxpayer is down a quarter of a billion pounds before anything is built, in part because of a tussle between two government agencies. This is not to attack the principle of planning, rather to point out that as a result of the way it is applied, everything takes longer and fewer projects can be built.
State of the art?
HS2 is special for a number of reasons. The line goes through the Chilterns, an Area of Outstanding Natural Beauty. So a lot of it is being built in a tunnel. It has a dedicated line into central London at Euston and a new terminal there.
We did that with the country’s first high speed line, building a special line into a revamped St Pancras. If you take the Eurostar to Paris, you ride into the Gare du Nord on regular suburban tracks once you reach the outskirts of the city. HS2 trains are designed to run at up to 225mph.
That is faster than Eurostar, which does 186mph, but puts up the cost of everything, including the amount of energy used to drive it. And for the Birmingham leg gives only a three or four minute time advantage.
The HS2 website boasts that: “HS2’s state-of-the-art trains will transform rail travel – offering passengers unparalleled levels of reliability, speed and comfort – and will help in the fight against climate change… Building on the latest technology from the Japanese Shinkansen ‘bullet train’ and European high-speed network, they will be some of the fastest, quietest and most energy efficient high-speed trains operating anywhere in the world.”
That quote gives a clue to a lot of the problem. Saying you are doing something that is “state of the art” means that you are focusing on pursuing excellence rather than cost-effectiveness.
Learning from mistakes
So what is to be done? We should surely try to learn from our mistakes. Politicians must take part of the blame. They like to boast of new projects, with the problems only emerging long after they have left office.
Back in 2015 the Government claimed that the Birmingham/Crewe leg would be open by 2027, six years earlier than planned. That sounds absurd now. But our engineers and planners should take part of the blame, too.
My own instinct is that we should try and take infrastructure planning out of the political process. You cannot do that completely, but we could perhaps create some kind of semi-independent body to help determine priorities, on the lines of the Office for Budget Responsibility, perhaps. The key point to remember is opportunity cost.
If we do this, what else can’t be done? We must learn to do better.
Need to know
It’s very hard to cancel a vanity project, particularly one that your own party has supported for more than a decade. I have been told that keeping it was part of the deal between the Tories and the Lib Dems when they formed the coalition in 2010. The idea was outlined the year before, 2009, here.
If you look at the document, the original plan mentioned extending the line to Scotland, understandably so, given that Gordon Brown was PM. It noted that passenger miles had shot up since the 70s and particularly after the 90s. It argued that there was a clear need for the London end of a new link to the North, but was slightly ambivalent about north of Birmingham. The key passage reads:
“Network Rail’s initial work has pointed to a strong case for an entirely new rail line in the corridor from London to the West Midlands. Such a line would enable faster and enhanced services to be run on new and existing lines to Manchester, Liverpool, Glasgow and other destinations in the north of England and Scotland, cutting journey times and increasing capacity substantially.”
So you could argue that the original plan was to build the Birmingham chunk and then in some cases at least to use existing lines to head further north, as in fact will now happen. Put like that, the whole idea makes sense. The report also says: “If a new line is to be built, it must demonstrate value for money and be underpinned by a robust business case.”
Before I read that my instinct was to blame New Labour for grandiose ideas – a vanity project – but I think the whole process went wrong much later, when what might have been a reasonable idea came to be gold-plated, and the “robust business case” was junked.
The project was announced by the transport secretary, Lord Adonis, in the dying days of the Labour government in March 2010. He said that the first 120 miles between London and the West Midlands would cost between £15.8bn and £17.4bn. The cost per mile beyond Birmingham was then estimated to halve, taking the overall cost of the 335-mile Y-shaped network to about £30bn.
Oh dear. But the plan was supported by all major parties, Network Rail and the unions. Indeed, the only opposition reported by the BBC came from the National Trust. Patrick Begg, head of its Thames and Solent region, said: “Like many people, we’re yet to be convinced that the overall business case for HS2 – the high-speed line – stacks up environmentally, financially and socially.”