HS2 update Transport Select Committee 10/1/24

[The Ham]

One of the things that I thought about JV's was that often they sometimes involved companies which are normally rivals, in merging such companies you don't have them bidding against each other and so you're likely to get a less competitive quote. If you let smaller contracts, you may have the same companies doing the same elements, but Blogs and co will be quoting in competition with Fred and sons.

Yes there a chance that they wouldn't tender for everything or they would think of a number and double it for a bit of the work they didn't really wish to do.

However you also give access to more mid sized companies if you make some of the contacts small enough. Whilst that means more project management for the client, it does mean that you're not paying someone else to do it for you. For example a lot of the actual construction will be done by subcontractors, so if you can get some of the contacts to be of a size that those sub contractors become the contractor you've cut out the middle man.

That's not to say that you wouldn't still have sub contractors, it's just that it's more likely to be more of the work is done by the staff of the main contractor.

 

[takno]

One of the things that I thought about JV's was that often they sometimes involved companies which are normally rivals, in merging such companies you don't have them bidding against each other and so you're likely to get a less competitive quote. If you let smaller contracts, you may have the same companies doing the same elements, but Blogs and co will be quoting in competition with Fred and sons.

Yes there a chance that they wouldn't tender for everything or they would think of a number and double it for a bit of the work they didn't really wish to do.

However you also give access to more mid sized companies if you make some of the contacts small enough. Whilst that means more project management for the client, it does mean that you're not paying someone else to do it for you. For example a lot of the actual construction will be done by subcontractors, so if you can get some of the contacts to be of a size that those sub contractors become the contractor you've cut out the middle man.

That's not to say that you wouldn't still have sub contractors, it's just that it's more likely to be more of the work is done by the staff of the main contractor.

Unfortunately the public sector refuses to pay anything like the going rate for project managers, just the same as they do for IT professionals, and even the people who are willing to do it for less they treat like dirt and constantly try to get off the books. This means that they simply can't adequately manage this kind of project in-house.

 

[Benjwri]

If risk is transferred to the private sector, the contractor guesses their risk exposure and prices it in, and possibly hedges some of it. In this case, I'd imagine all of tier-1 contractors would not have hedged enough for the combined effect of inflation, the Ukrainian war and Brexit and be bankrupt by now. The government would then find themselves re-letting contracts on more realistic terms to get the job done.

It would’ve been more expensive from the initial quote, but it would likely have ended up less expensive. There were a lot of things for HS2 that weren’t forseeable, and so wouldn’t have been factored in. Especially things like Covid.

 

[Angmering1974]

And you would be wrong.

Oh, control the purse strings do you?

 

[Arkeeos]

Oh, control the purse strings do you?

No, just that sort of budget increase is not possible.

 

[Nicholas Lewis]

Unfortunately the public sector refuses to pay anything like the going rate for project managers, just the same as they do for IT professionals, and even the people who are willing to do it for less they treat like dirt and constantly try to get off the books. This means that they simply can't adequately manage this kind of project in-house.

Not sure about that both HS2 Ltd and DafT have spent 100's millions on consultants

 

[Grimsby town]

Not sure about that both HS2 Ltd and DafT have spent 100's millions on consultants

Consultant here. The public sector generally doesn't pay the going rate for transport or engineering proffesionals. Some of your bigger transport authorities like TfL and TfGM provide competitive wages. Local authority wages are pretty terrible though.

Consultancy has its place to provide impartial advice and specialist knowledge and tends to be more productive than the public sector. That productivity comes at cost of paying for profit. I personally believe that we need more transport proffesional in the public sector but that means improving pay and hiring more people.

 

[takno]

Not sure about that both HS2 Ltd and DafT have spent 100's millions on consultants

That's kind of the point. They should directly employ the relevant professionals and pay them the going rate, then they wouldn't have to spend so much money to consultancies to provide the staff for them. Properly-paid directly-employed staff are cheaper in the long run, and are much more likely to drive value-for-money on projects.

 

[Nicholas Lewis]

That's kind of the point. They should directly employ the relevant professionals and pay them the going rate, then they wouldn't have to spend so much money to consultancies to provide the staff for them. Properly-paid directly-employed staff are cheaper in the long run, and are much more likely to drive value-for-money on projects.

Which is what BR had yet at privatisation a lot of the expertise got divested into consultancies leaving Railtrack bereft of expertise and what little its still had wasn't trusted by the outsider who took charge at Railtrack and the gravy train began and the costs went up. NR has gradually reversed some of that and there is more in house capability to support minor renewals but still too much gets outsourced. I'd say HS2 were going through same evolution that they felt better informed and thus understood the risk profile so more confident to change the contracting strategy for phase 2.

 

[takno]

Which is what BR had yet at privatisation a lot of the expertise got divested into consultancies leaving Railtrack bereft of expertise and what little its still had wasn't trusted by the outsider who took charge at Railtrack and the gravy train began and the costs went up. NR has gradually reversed some of that and there is more in house capability to support minor renewals but still too much gets outsourced. I'd say HS2 were going through same evolution that they felt better informed and thus understood the risk profile so more confident to change the contracting strategy for phase 2.

Yup, HS2 definitely give the impression of having being ineptly set up, but having recently grown into the role regardless and really starting to perform. Obviously the optimal time for the government to pull an absolute blinder.

 

[cinders&ashes]

This 250m adjustment is now in the FT, and they've made the point that switching all trains to 250m would then offer less capacity where 200m trains could've been doubled up, Surely a split order is the answer, with 200m sets for the Birmingham route and 250m ones for Handsacre and beyond?

 

[Manutd1999]

OOC-Brum will be £100bn when all is said and done I bet.

Is £869m/mile comparable to other projects/countries? (115 miles by road from OOC to Curzon St).

"The report found that the average cost of building a high-speed line in Spain is 17.7 million euros per kilometre, compared to an average of 45.5 million euros in the rest of the countries with high-speed railways". [0]

I'm sure someone far more knowledgable than myself can explain why £869m/mile (or even £563m/mile based on current estimates) in the UK makes total sense.

We could never have been expected to build it as cheaply as in Spain (labour cost differences, different terrain etc.) but the difference is staggering.

Perhaps more damming is how HS2 has seemingly implemented none of the key aspects of the Spanish (or other) systems. For example, Spain has built-out the network gradually, limited the max speed to 300km/h, has used existing stations/approaches where possible, has not specified cathedral-like new stations etc. At almost ever turn, HS2 has taken the opposite approach....

I'm not saying that a copy of the Spanish network would work in the UK, but equally I find it impossible to believe that we couldn't have taken incorporated some of their lessons learnt and successes into our design. Even better, why didn't we just admit that we are not experts at this kind of infrastructure and work together with RENFE from the start? British exceptionalism at it's finest

 

[HSTEd]

This 250m adjustment is now in the FT, and they've made the point that switching all trains to 250m would then offer less capacity where 200m trains could've been doubled up, Surely a split order is the answer, with 200m sets for the Birmingham route and 250m ones for Handsacre and beyond?

I'd argue that if you were going down that route, it would be better to specify a fleet of mostly 250m trains and then a relative handful of 400m sets to be used on busy Birmingham etc diagrams.

You already have a low demand option in the 250m trains, might as well just order a half dozen to a dozen 400m crowdbusters.

 

[Benjwri]

I'm not saying that a copy of the Spanish network would work in the UK, but equally I find it impossible to believe that we couldn't have taken incorporated some of their lessons learnt and successes into our design. Even better, why didn't we just admit that we are not experts at this kind of infrastructure and work together with RENFE from the start? British exceptionalism at it's finest

As much as people don’t like to admit it, many of the what they claim are overpriced consultants who do nothing, were those exact firms, some of which have worked on the Spanish High Speed network (The main contractor did preliminary civils works for HS2, another is involved with one of the joint ventures designing a section), and most of the joint ventures have companies who have worked on the French high speed network.

As has already been said a large difference in the cost both between the Spanish and European, and the UK, is planning. Spain has far lower population density, and it was far easier and cheaper for them to get planning permission.

Many of the approaches you suggest the UK should take just aren’t possible. Our existing infrastructure is at capacity, the whole point of HS2 was to take trains off it, not just to speed up trains on an underused system like in Spain.

 

[HSTEd]

As has already been said a large difference in the cost both between the Spanish and European, and the UK, is planning. Spain has far lower population density, and it was far easier and cheaper for them to get planning permission.

HS2 hardly helped itself, it designed a scheme that seemed to be intended to antagonise as many people as possible. See the whole Chiltern mess, the New North Main Line mess, the mess over Sheffield etc. They were never going to be allowed to build a surface alignment the originally planned alignment through the Chiltern area and it was delusional to believe they would be.

Many of the approaches you suggest the UK should take just aren’t possible. Our existing infrastructure is at capacity, the whole point of HS2 was to take trains off it, not just to speed up trains on an underused system like in Spain.

HS2 doesn't take that many trains off the infrastructure though, because it is designed to avoid urban areas served by the WCML, a large part of the existing timetable will have to run regardless. Except now it will have none of its high-paying end-to-end traffic, so sustaining it will be a significant issue at a time when the railway has less political clout than it did when it was conceived.
And then there is the wonderful phasing decision that HS2 went with, where (until Phase 2A was forced on them) it was either going to end at Handsacre or both Wigan and Manchester!

 

[LNW-GW Joint]

We could never have been expected to build it as cheaply as in Spain (labour cost differences, different terrain etc.) but the difference is staggering.
Perhaps more damning is how HS2 has seemingly implemented none of the key aspects of the Spanish (or other) systems. For example, Spain has built-out the network gradually, limited the max speed to 300km/h, has used existing stations/approaches where possible, has not specified cathedral-like new stations etc. At almost ever turn, HS2 has taken the opposite approach....

I'm not sure Spain is a good exemplar.
Spain had a low-speed, low-capacity network of considerable indirectness, so their high speed network is transformational.
They also had lots of EU money to splash around (which we helped fund).
They were also overambitious and built new alignments which had to be abandoned or reduced to single track to cut costs.

There are several cathedral-like stations built for high speed.
Both Madrid terminals were vastly expanded (with a new HSL between them), and there are new/expanded stations in places like Seville, Malaga, Valencia etc.
Complicated by the need to run two gauges with expensive gauge-changing trains and track interface.

Germany is a better comparator, with its high-speed sections between existing stations, but also huge planning delays over environmental issues.
Look at the controversy over Stuttgart 21, and the complete rebuild of the rail network around it.
Berlin is a bit different because they had the opportunity to build new routes and stations on the empty spaces left by the wall zone.

 

[CdBrux]

Germany is a better comparator, with its high-speed sections between existing stations, but also huge planning delays over environmental issues.
Look at the controversy over Stuttgart 21, and the complete rebuild of the rail network around it.

As a German colleague said about Stuttgart 21: "Don't include the year in which you intend to finish in the project name as it then becomes very obvious when it's late"

 

[Arkeeos]

Perhaps more damming is how HS2 has seemingly implemented none of the key aspects of the Spanish (or other) systems. For example, Spain has built-out the network gradually, limited the max speed to 300km/h, has used existing stations/approaches where possible, has not specified cathedral-like new stations etc. At almost ever turn, HS2 has taken the opposite approach....

The max speed has nothing to do with the cost, neither does the fact that spain built its network gradually, also, if you look at actual track mileage, its not gradual by any definition of the word. HS2 is smaller in terms of track mileage than many other single projects.

The cost of HS2 and of every infrastructure project in the country as of recent, is because of the artificial fragmentation of industry, in part caused by ideological regulations, and in other part caused by government instability.

HS2 doesn't take that many trains off the infrastructure though, because it is designed to avoid urban areas served by the WCML, a large part of the existing timetable will have to run regardless.

HS2 doesn't have to take off that many trains to increase capacity significantly, just the long distance trains that hog capacity. And in regards to what will fill the extra capacity, there is already latent demand on the WCML both in terms of passengers and freight.

 

[HSTEd]

HS2 doesn't have to take off that many trains to increase capacity significantly, just the long distance trains that hog capacity. And in regards to what will fill the extra capacity, there is already latent demand on the WCML both in terms of passengers and freight.

Very few long-distance trains will actually be removable.
Unless you propose to leave MKC et al without services beyond Birmingham, which I imagine would go down like a lead balloon with the electorate.

As for "using the excess capacity", freight trains are pretty much entirely unrenumerative from the perspective of the infrastructure operator. They only contributed £11m in the last financial year in infrastructure charges.
And the two major west coast main line franchises (Avanti/ICWC and LNWR/WMT etc) are burning well over a billion pounds a year in net subsidy as it is. Once the long distance traffic is removed its going to get far worse.

It's a recipe for major increases in net subsidy which is hardly ideal given the overall political and economic situation.

 

[LNW-GW Joint]

The plan until Phase 2 was axed, as I understand it, was to divert 8tph of the 9tph Avanti fast line services to HS2.
The 9th service being the bi-mode Chester/North Wales service which has to stay on the classic line (plus the OA Stirling service if it ever starts).
No doubt there will be a transition situation while HS2 terminates at OOC.
WMT or its successor will revise its services to serve classic line destinations, some using the fast lines.
If these plans come to fruition, why do we think there will not be new capacity available via MKC/Rugby?
I realise there may be problems fitting in more trains around Colwich.

 

[HSTEd]

The plan until Phase 2 was axed, as I understand it, was to divert 8tph of the 9tph Avanti fast line services to HS2.

Yes, this was the plan, but that is obviously no guarantee that the plan would actually be implemented.
For example, separating Liverpool-Norwich at Nottingham has been planned many times and is unlikely to ever actually happen.

The 9th service being the bi-mode Chester/North Wales service which has to stay on the classic line (plus the OA Stirling service if it ever starts).
No doubt there will be a transition situation while HS2 terminates at OOC.
WMT or its successor will revise its services to serve classic line destinations, some using the fast lines.
If these plans come to fruition, why do we think there will not be new capacity available via MKC/Rugby?
I realise there may be problems fitting in more trains around Colwich.

When the public is confronted with the swingeing timetable cuts necessary to make significant operational savings in money or paths, I am not convinced that the politicians who are ultimately in charge will be able to resist the calls for retaining the bulk of the existing timetable as is.

 

[Manutd1999]

The max speed has nothing to do with the cost, neither does the fact that spain built its network gradually

Of course max speed has an impact on cost. Maybe it's not the main driver, but every little helps...

As for the gradual build-out, indeed that approach could even increase costs slightly. The big benefit though is that it's much easier to fund/approve/deliver piece-meal schemes with smaller price-tags.


I am a supporter of HS2 as a project/idea but I think it was badly over-designed. There seems to have been a combination of "make it too big to fail" and "lets build our dream railway" thinking from the start, neither of which are useful when trying to control costs....

With the benefit of hindsight a piece-meal program of high-speed bypasses would have been a more achievable project, combined with more local upgrades to increase capacity along the key approaches as needed.

 

[The Planner]

With the benefit of hindsight a piece-meal program of high-speed bypasses would have been a more achievable project, combined with more local upgrades to increase capacity along the key approaches as needed.

We have done this one before, high speed bypasses of what, and how does that release capacity?

 

[Rudi]

Risk of satisfactory job completion on time and on budget cannot be passed on. The only risks that can be mitigated by passing them on are financial as not paying is the only effective weapon the client has.

As an illustration, the Humber Bridge southern tower needed to be built on the one specific piece of rock on the South Side of the Humber that could be used and enormous insurance premiums had to be paid by the contractor - far more than their assets. So this was factored in to the price to the taxpayer. If anything significant had gone wrong with constructing the tower, then the bridge could not have been built (no-one knows how to demolish and re-build it). So the tax payer would have got a lot of money back - but no bridge.

The problem with Risk Management is getting the client to face that achieving what's wanted is entirely theirs, and the best way to mitigate ii is for them to use their brains to identify all the risks and to instigate a culture of blame-free direct notification of failures. The best example I know of here is the airline pilots' "Near Miss" reporting. The lessons learned are said to be essential to the industry but great care is taken by the report handling group to ensure absolute anonymity.

 

[Busaholic]

I see the new Hinkley Point nuclear power station is well behind schedule and facing vastly increased costs.

Sunak to announce it's only going to be built as far as Hinkle.

Or Inkley, which has a famous moor, of course.

 

[Manutd1999]

We have done this one before, high speed bypasses of what, and how does that release capacity?

We are getting into speculation, but a first phase could have run from somehwere north of Watford to Rugby. Capacity into Birmingham/London could have been increased with a 4-track section between Coventry and Birmingham, the Bordesley Chords project to increase capacity at New Street and maybe squeezing in a couple of extra platforms at Euston and/or moving the Watford DC line out of Euston.

That delivers most of the benefits of Phase 1 without the new stations and with a lot less tunneling.

Then you start to look at extending the bypass towards Crewe/Derby etc.

 

[stuu]

We are getting into speculation, but a first phase could have run from somehwere north of Watford to Rugby. Capacity into Birmingham/London could have been increased with a 4-track section between Coventry and Birmingham, the Bordesley Chords project to increase capacity at New Street and maybe squeezing in a couple of extra platforms at Euston and/or moving the Watford DC line out of Euston.

The biggest capacity bottlenecks ARE the sections into the cities

 

[The Ham]

As I understand it, a lot of the costs are related to the fact that the government wanted to have infrastructure which was so well engineered that there was no chance of it moving more than quite rigid tolerances. In doing so, the contractor has to ensure that their proposal is built in such a way that meant that it is significantly over engineered.

As such, almost regardless of the speed the costs wouldn't actually change that much.

Likewise, it's been suggested that part of the reason for the year is slab track was to do with the frequency of services, and that there's probably a reasonable case to (if you were building new) to do likewise for a lot of the rail network where there's more than 10tph.

 

[The Planner]

We are getting into speculation, but a first phase could have run from somehwere north of Watford to Rugby. Capacity into Birmingham/London could have been increased with a 4-track section between Coventry and Birmingham, the Bordesley Chords project to increase capacity at New Street and maybe squeezing in a couple of extra platforms at Euston and/or moving the Watford DC line out of Euston.

That delivers most of the benefits of Phase 1 without the new stations and with a lot less tunneling.

Then you start to look at extending the bypass towards Crewe/Derby etc.

It doesnt deliver the benefits as Euston is still constrained, all those extra tracks between Watford and Rugby and 4 tracking the Cov corridor doesnt get more trains in and out of Euston.

 

[Nicholas Lewis]

Very few long-distance trains will actually be removable.
Unless you propose to leave MKC et al without services beyond Birmingham, which I imagine would go down like a lead balloon with the electorate.

As for "using the excess capacity", freight trains are pretty much entirely unrenumerative from the perspective of the infrastructure operator. They only contributed £11m in the last financial year in infrastructure charges.
And the two major west coast main line franchises (Avanti/ICWC and LNWR/WMT etc) are burning well over a billion pounds a year in net subsidy as it is. Once the long distance traffic is removed its going to get far worse.

It's a recipe for major increases in net subsidy which is hardly ideal given the overall political and economic situation.

Looking at DfT over 25k payments the last two updates from Oct/Nov have WMT being paid c48m for each of those months but only a modest 2m payment to First Trenitalia Rail suggesting like LNER they are close to covering base costs. So as you rightly say the cost of running WCML isn't going to drop that much unless they drop line speed back to 100mph it will be in the highest track category for starters. HS2 will be deadweight around the industry unless it is separated out from the classic network.