HS2 update Transport Select Committee 10/1/24

[Nicholas Lewis]

Sir John Thompson was at the TSC today this is my precis from listening to it as no hansard update has yet been issued

Reports civils are over 50% complete now. Tenders back for railway systems and will be awarded by summer.

Doesn't see Handsacre as an issue with stopping of phase 2 - thats from the perspective of HS2 connecting to WCML what happens after that is NRs problem.

Construction material costs +27% over last three years on average if the costs were in 2024 prices the forecast costs would be 60-66B (49-56B at 2019 prices currently used in progress reports)

Now says estimate was flawed as set too early - what on earth were all the consultants doing at great cost beggars belief then.

Despite having an act of parliament still get bogged down in local planning issues has delayed progress along with govt slowing them down so project is getting elongated.

Says trains will have to be 250m now not 400m unless Crewe, Manchester Piccadilly etc are rebuilt.

Cost plus contracts have 99% of risk loaded against HS2 ie taxpayer. Contractors also getting a straight fee on what they spend so no incentive to save cost.

1800 bore holes have to remediated before the HS2a land can be sold

advice to DfT is to not amend the rolling stock contract

Phase 2 cancellation issues that need resolving before HS2 can reforecast - do you want us involved in Euston, whose going to tunnel to Euston, is OOC to be downsized, is Eastern stub to be built (?) do you want to change Curzon street so its connected to local network to make better use of platforms there.

Says board had poor data when he joined - unbelievable statement what on earth were all the consultants doing - but they've sorted that which is why cost forecast has gone up. Reporting was qtrly now its monthly - again unbelievable statement of the previous mgt of HS2

Will now be a railway systems delivery only team was previously joined with stations and a chief railway office to integrate it all

200m will be spent by HS2 Ltd on no regrets work at Euston

There is lot still to unpick from phase 2a works which may mean many undertakings given in the act will still have to be fulfilled

Confirms speculation that a 2nd door per carriage will be required for dwell times

Mods:leave it to you if you want to merge into another thread but couldn't see a relevant one thats still open

 

[Snow1964]

BBC news also has summary news article

HS2 to Birmingham may cost £65bn, railway boss says

Sir Jonathan Thompson says inflation has added up to £10bn to cost of London to Birmingham stretch.

www.bbc.co.uk

 

[HSTEd]

Confirms speculation that a 2nd door per carriage will be required for dwell times

Was there ever any chance of there not being a second door per carriage, they weren't gong to procure TGVs were they?

Also why are HS2 telling us that trains will have to be 250m whilst simultaneously advising the Government not to alter the rolling stock contract?
Are they expecting the government to pay for an extremely expensive rebuild at Manchester Piccadilly, out of someone else's budget?

 

[Angmering1974]

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.

[0] https://www.railtech.com/all/2024/0...fficient-high-speed-rail-network-says-report/

 

[Benjwri]

Also why are HS2 telling us that trains will have to be 250m whilst simultaneously advising the Government not to alter the rolling stock contract?
Are they expecting the government to pay for an extremely expensive rebuild at Manchester Piccadilly, out of someone else's budget?

The trains in the contract are 200m, able to be run in multiple for 400m units. Presumably the idea od not amending the contract is they are hoping to run an extensive service on the conventional lines after Birmingham, or it is more of an attempt to at least delay a decision on stock until after the election, given the potential for uncertainty over whether a labour government could reinstate phase 2, as is being pushed for.

 

[GRALISTAIR]

What on earth were all the eye wateringly expensive consultants doing?

 

[hwl]

Was there ever any chance of there not being a second door per carriage, they weren't gong to procure TGVs were they?

The tender specified 2 doors per intermediate carriage and 1 passenger door per end carriage for each side.

 

[The Planner]

What on earth were all the eye wateringly expensive consultants doing?

What they were asked to do, its whoever set the questions you need to be challenging.

 

[Benjwri]

What they were asked to do, its whoever set the questions you need to be challenging.

This is typically what happens. The government will hire lots of consultants for lots of different jobs, but the person who sets those jobs didn't know what they were doing, and then a consultant will come along to produce work based on what another consultant has done, but there will be some essential piece of information missing, which then has to be fed back, and then all the work done previously has to be either redone, or gone back over to work out something which would have been far cheaper if it had been asked for in the first place.

 

[matacaster]

What on earth were all the eye wateringly expensive consultants doing?

Consultants were all working hard on the train.....the gravy train!

 

[WatcherZero]

Was there ever any chance of there not being a second door per carriage, they weren't gong to procure TGVs were they?

Also why are HS2 telling us that trains will have to be 250m whilst simultaneously advising the Government not to alter the rolling stock contract?
Are they expecting the government to pay for an extremely expensive rebuild at Manchester Piccadilly, out of someone else's budget?

The HS2 trains in the contract are 200m operating as 2x200m, the existing Pendolino are 265m meaning they will offer less capacity unless they are extended or doubled up, which requires platform extensions.

 

[Nottingham59]

The HS2 trains in the contract are 200m operating as 2x200m, the existing Pendolino are 265m meaning they will offer less capacity unless they are extended or doubled up, which requires platform extensions.

... which has been blindingly obvious for years. They should have specified splittable 500m trains from the start.

 

[Gerald Fiennes]

It was 'blindingly obvious' and was discussed with the project team at some length about a decade ago. The whole philosophy of the project from the start was the 200m unit, based on TGV practice: HS2 never wanted (or were required) to shift from that. A train made up of 265m and 130m units might have been another way together, although this would have meant less seatings thanks to nosecones/cabs and more electrical equipment. If all that is built is Phase 1, then chaging the conttract to get 265m train might be a better way to go, depending on the size of the variation order bill.....

 

[MadCommuter]

It was 'blindingly obvious' and was discussed with the project team at some length about a decade ago. The whole philosophy of the project from the start was the 200m unit, based on TGV practice: HS2 never wanted (or were required) to shift from that. A train made up of 265m and 130m units might have been another way together, although this would have meant less seatings thanks to nosecones/cabs and more electrical equipment. If all that is built is Phase 1, then chaging the conttract to get 265m train might be a better way to go, depending on the size of the variation order bill.....

I wonder if we're at the point now where any change that will result in additional spend, gets declined regardless of the bigger picture?

 

[Snow1964]

I wonder if we're at the point now where any change that will result in additional spend, gets declined regardless of the bigger picture?

There is a certain amount of irony in if it results in additional expenditure on trains to replace the not built section to Crewe.

Of course in common sense world wouldn't allow any variation orders, and would stick to contract price, and Contractual timeline, to avoid any overall cost increase.

Of course everyone knows could add most of the Midlands rural sections of new lines (excluding stations) both west and east lines, for about 10% extra cost (extra £6bn), which gives about 50% line length increase.

 

[GardenRail]

Is it going to Euston, or not?

 

[Gerald Fiennes]

Better ask Vicky Pollard that one!!!

 

[deltic]

Cost estimates were never based on reality - Treasury said you are going to build it at a cost of £m a mile as that is what has been benchmarked from other countries with allowance for higher land costs in UK. HS2 weren't able to check ground conditions on large parts of the route as they werent allowed access prior to PArliamentry approval

 

[LNW-GW Joint]

The project seems to have more questions to answer than before the cancellation of Phase 2.
We appear to have an over-specified, or mis-specified, project if it is only to serve as a replacement for the southern WCML.
Its stations are too big, its trains too small, and there is no "vision" as to how its trains will fit into the WCML network.
Not to mention if/when it will reach Euston.
The best prospect might be to keep it all in limbo until the next government can get to grips with it.
But I haven't heard anything constructive from Labour yet as to what they would do with the project.

 

[chris2]

The project government seems to have more questions to answer than before the cancellation of Phase 2.

Corrected that for you.

 

[The Planner]

Its stations are too big, its trains too small, and there is no "vision" as to how its trains will fit into the WCML network.

Disagree, there was until people started hacking at the project with a knife.

 

[Benjwri]

New Civil Engineer has published an article, which is paywalled. It focuses on an angle the BBC has not mentioned, providing another explanation for cost overruns:

HS2 chief says government’s inability to afford construction schedule contributed to overruns​

The chair and acting chief executive of HS2 Ltd has said the project’s delays and cost hikes have been partly caused by the government not being able to afford the construction schedule.

Speaking in a Transport Select Committee session on 10 December, HS2 chair Sir Jon Thompson said: “The government itself has sometimes said [...] ‘We can’t really afford the schedule, so we need you to go slower because we can’t really afford it in cashflow terms.’” He said the current year was a good example of this.

It is mentioned this is a smaller factor in the cost overrun, and there were some far bigger the ones, however this is still an interesting point.

He also goes on to speak about what the plan was to avoid cost overruns for phase 2, before it was cancelled, and the biggest change was said to be using smaller contracts, rather than the large multi billion pound contracts which were used for phase 1. By breaking up the contracts into smaller ones, the civils companies could be expected to take some of the risk and burden of cost overruns, as is typical for any construction projects. Interestingly they talk about a big issue being with the huge multi billion pound contracts insisted on by the government, providing clarity of the 99% of risk quoted above, in that this was because of the size of the contract that no consulting firm would take on the potentially billions of pounds of risk in one contract. I wouldn't say the harsh comment of it meant the consultants didn't care is true as mentioned above, but that when things went wrong and changed is was the government's responsibility to pay for, whereas in a more typical contract the consultancy would have to pay some of those costs which happened due to no ones fault as well. It was also mentioned smaller contracts would have allowed better management and control.

 

[stephen rp]

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.

 

[The Ham]

265m vs 250m isn't the question to be asked, it's how many seats did each have, if the HS2 stick is anything more than about 520 then it's probably cost enough but to worry about the extra costs.

 

[350401]

265m vs 250m isn't the question to be asked, it's how many seats did each have, if the HS2 stick is anything more than about 520 then it's probably cost enough but to worry about the extra costs.

A 200m 8 coach HS2 train is currently proposed to have 528 seats - this is more than the 469 in a 9 car Pendolino and I suspect that this number can be increased a fair bit - removal of some tables, kitchen area etc.

 

[The Ham]

A 200m 8 coach HS2 train is currently proposed to have 528 seats - this is more than the 469 in a 9 car Pendolino and I suspect that this number can be increased a fair bit - removal of some tables, kitchen area etc.

Given there's 22 x 9 coach and 35 x 11 coach units (589 seats) the total fleet capacity is 30,933 seats.

At 528 seats per set the same number of sets would deliver 30,096.

The reason I said 540, is that it would be 30,780 so really not with any extra cost.

Given at last check rail use by TOC was roughly at 2011 usage, total fleet seating capacity being down by 2.7% isn't going to be an issue for the time being.

Therefore it's reasonable for the comment to be made that it's not worth changing the contract.

Certainly much more reasonable than the circa 20% reduction in train length would imply the capacity has reduced by.

 

[Nicholas Lewis]

New Civil Engineer has published an article, which is paywalled. It focuses on an angle the BBC has not mentioned, providing another explanation for cost overruns:



It is mentioned this is a smaller factor in the cost overrun, and there were some far bigger the ones, however this is still an interesting point.

He also goes on to speak about what the plan was to avoid cost overruns for phase 2, before it was cancelled, and the biggest change was said to be using smaller contracts, rather than the large multi billion pound contracts which were used for phase 1. By breaking up the contracts into smaller ones, the civils companies could be expected to take some of the risk and burden of cost overruns, as is typical for any construction projects. Interestingly they talk about a big issue being with the huge multi billion pound contracts insisted on by the government, providing clarity of the 99% of risk quoted above, in that this was because of the size of the contract that no consulting firm would take on the potentially billions of pounds of risk in one contract. I wouldn't say the harsh comment of it meant the consultants didn't care is true as mentioned above, but that when things went wrong and changed is was the government's responsibility to pay for, whereas in a more typical contract the consultancy would have to pay some of those costs which happened due to no ones fault as well. It was also mentioned smaller contracts would have allowed better management and control.

Indeed its rather debunked the theory that by creating JVs you were transferring risk. In fact in many industries in the UK ever since the client tried to transfer risk to the private sector it hasn't worked out well. If this was a BR scheme it would have been multiple contracts with BR taking overall responsibility for delivery and integration. Worked out pretty well on ECML and before that the Selby diversion let alone numerous other big schemes. All delivered at far lower cost and quicker than current schemes seem capable of doing and this is largely a greenfield project.

 

[marko2]

Indeed its rather debunked the theory that by creating JVs you were transferring risk. In fact in many industries in the UK ever since the client tried to transfer risk to the private sector it hasn't worked out well. If this was a BR scheme it would have been multiple contracts with BR taking overall responsibility for delivery and integration. Worked out pretty well on ECML and before that the Selby diversion let alone numerous other big schemes. All delivered at far lower cost and quicker than current schemes seem capable of doing and this is largely a greenfield project.

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.

There's plenty recent history not so far away in the railway industry - in passenger franchises - of this effect.

 

[Arkeeos]

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

And you would be wrong.

 

[Nicholas Lewis]

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.

Of course but this is pretty standard civil engineering in fact the whole railway system is standard and by HS2 Ltd own admission contract strategy for phase 1 was flawed. Spanish manage to build their HS system without too many dramas on contract pricing or delivery through their terrain.

There's plenty recent history not so far away in the railway industry - in passenger franchises - of this effect.

All those franchises burnt through their bonds though and didn't cost the taxpayer anything at the time.