Britain’s high infrastructure costs at heart of HS2’s challenges

The fundamental problem with HS2 is that its capital costs are out of control.  The Prime Minister and the Chancellor are leaning towards the view that, if you can’t afford the hole, stop digging.

Extraordinarily high Infrastructure costs appear to be a particularly British problem.  Britain Remade – a pro-growth campaign group – has published an analysis comparing British costs with other schemes across the world.  Even allowing for the difficulties of comparing apples with oranges, the results are quite shocking not just for HS2 but for all categories of project.

So, France has built 21 modern tram systems in the past 25 years, including in relatively small cities such as Avignon and Besancon; in Britain we only have a handful, at over twice the cost per mile. Scandal is heaped on scandal: even the inquiry into the massively over budget and late first stage of the Edinburgh tram cost £13 million!

High Speed 2 itself is now facing a real prospect of further amputation.  The Doomsday scenario is that it becomes a ludicrous point-to-point shuttle between Old Oak Common and Curzon Street in Birmingham, which at the most would sustain three trains an hour.  However, unless we live in a totally mad world – a possibility which sadly can’t be completely discounted –it will presumably be completed at least as far as Handsacre Junction, where it rejoins the West Coast Main line just north of Lichfield.  This would at least allow operation of some high speed services from London to Manchester, Liverpool and Glasgow, delivering some benefits to the North West and Glasgow.

Capacity of the route will, nevertheless, be severely constrained because of the limitations at Old Oak Common.  Euston was to have had more platforms, operated as two groups with a grade separated approach, so it would have been possible to operate sixteen trains an hour in each direction; HS2Ltd had claimed eighteen trains an hour but operating at that level is probably not achievable.  In contrast, the capacity of Old Oak Common is much lower as there will only be six platforms without grade separation on the approach.  Realistically, this will limit the capacity of the route to six trains an hour – possibly eight – although if we were able to emulate Japanese standards of operation we could do better.  The Tokaido Shinkansen operates up to twelve trains an hour into and out of Tokyo Central station with six platforms.

If the Government does decide to truncate the route at Old Oak Common, I expect spin doctors will present this as an improvement as the London–Birmingham time will be reduced from 49 minutes from Euston to just 42 minutes from Old Oak Common!  It’s also true that the Elizabeth Line will provide significant capacity into central London, with ten trains an hour starting from Old Oak.  This is in some ways a better situation than at Euston, where the three Underground Lines have only limited capacity at peak periods, even after allowing for the impact on peak volumes of the pandemic and working from home.

The main problem at Old Oak Common is likely to be resilience – if the Elizabeth Line falls down for any reason, passengers will be effectively marooned there with few alternatives; the station is too far away from the city centre for walking to be a realistic option and it’s quite clear that the road network wouldn’t be able to cope.

Fewer trains, of course, means that less rolling stock will be required but the unit cost of each train will shoot up as the costs of design and setting up a production line will be spread over broadly half the number of trains – I doubt whether this issue has been factored in yet.

I am just about persuaded that the railway should be built throughout to Euston, for route capacity reasons and resilience, although I can understand the temptation in the Treasury to make Old Oak Common the permanent terminus.  Further North, I strongly believe that Phase 2A, Birmingham to Crewe, should be completed, and despair at the delay to this section.  It is a relatively inexpensive section of the route and would allow useful journey time savings to the North West and Scotland. Phase 2A also delivers major capacity benefits, as without it high speed trains coming off the new railway would immediately hit the pinch points at the flat junction at Colwich, the two track section from there towards Stafford and the flat junction at Stafford.  Far from releasing capacity for freight, without Phase 2A, HS2 will actually reduce capacity for freight on this part of the route.

However, at the risk of hate mail, I think the Crewe to Manchester section should not be taken forward, at least for the time being.  The route is expensive, with a long tunnel under the city’s southern suburbs and massive works at Manchester Piccadilly, which feels potentially like a mini-Euston.  Also, it would not carry many trains.  Even with construction through to Euston there would realistically only ever be justification for three London trains an hour.  There would also perhaps be two Birmingham–Manchester trains an hour, although the level of demand for these services is weak as they would only carry city centre to city centre passengers without intermediate stops.  The M6 is heavily congested, but not many cars are going from the Bull Ring to Piccadilly Gardens.

Yet, if Euston goes ahead, I believe the East Midlands leg should be built.  Like Phase 2A, this section is relatively inexpensive (although “relatively inexpensive” are odd words to associate with anything to do with HS2!) and would produce faster journey times to Nottingham, Derby and Sheffield; it would also provide genuinely useful use of some of the capacity on the core London – Birmingham section of the route.

In a rational world, there would be a serious review of the project, considering all the factors discussed above and reaching a decision which contains the capital costs while maximising the benefit of what is built.  But discussion of HS2 has never been rational, and I suspect we are faced with senior ministers who regard the rail industry as a financial black hole and, in one case, prefer to travel by helicopter.

As a footnote, early in September HS2 Ltd trumpeted that it had “received a Platinum advanced award from The Chartered Institute of Procurement & Supply as part of its Procurement Excellence Programme, one of only 17 organisations globally to achieve the accreditation at this level.”  I have no idea whether or not this was merited but asserting that the company is any sort of global leader in anything is counter-intuitive.

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