Labour *Could* reinstate HS2 Northern legs after Government fails to sell off land

[Bald Rick]

This is no different to what happens in upgrades when they fail miserably, which they essentially always do.
Great Western Upgrade and West Coast Route Modernisation both provided a tiny fraction of the benefits for many times the original project cost.

What fraction (presumably large) of the benefits of the WCRM were not delivered?

 

[The Ham]

Original estimate for the whole of HS2, including Phase 1 to Birmingham and Phases 2 to Manchester and Leeds was ~£37 Billion, which adjusted to CPI inflation would be around ~£56 Billion in 2024. And to be clear, that's the price for the whole of HS2, getting it to Leeds and Manchester.

Last week the estimate of Phase 1 to Birmingham only, was now ~£50 - £56 Billion in 2019 prices, with estimated additional costs of £8-10 Billion for cost inflation up to 2024 prices, so over £60 Billion for Phase 1 only. The whole of the HS2 budget has been taken up by the construction of just one of the three phases, leaving no budget left to build Birmingham to Leeds, or Birmingham to Manchester.

I don't see how it can be regarded as anything other than out of control?

To a certain extent it doesn't matter what the original cost estimates were. What was the final estimate when HS2 phase one was given the final go ahead? Up to £56.6bn in 2019 prices.

For example, I looked at doing an extension based on £2,000 per m2 which came in at £75,000. I then allowed for a good level of uplift so had a budget in my head of £100,000 including a new kitchen. When the quotes came in then were actually £150,000 without the kitchen. The £75,000 figure wasn't an unreasonable first guess, but that still doesn't mean that I should have been able to tell the builder to do it for that much.

If I had decided to go ahead to £150,000 and it had actually cost £165,000, would it have been said that the costs had got out of control? No, because the first estimate hadn't fully grasped just how much building inflation had gone up during the time of COVID. Yes there would have been an extra £15,000, but that had included a change to the original design.

However even if we were to stick to the original numbers of £37bn and £7.5bn for the trains (which have been added in, even though they normally wouldn't, but in doing so it means that the running costs are significantly reduced as there's no lease costs to pay - which is typically about 1/3 of the a TOC's costs), the costs have indeed increased. However, with the phase 2 elements likely to be around 3/5 of the phase 1 costs we're looking at a cost of £105.6bn in today's prices.

That compares with (£42.5+ inflation) £56.8bn. Whilst that's fairly bad, in that the total cost had nearly doubled (+86%), is that in particularly bad for infrastructure project? It should be noted that this also doesn't allow for some of the extra costs (at least £5bn worth of infrastructure costs) which have come about due to changes and a LOT of redesign costs.

If we add those £5bn of costs (which were added to mitigate some of the worse concerns of the opponents, adding 13.5%) then the starting number is £47.5 with inflation you get to £61.2bn (so an uplift of 73%), the reason for this second update is so we can compare like with like for the Lower Thames Crossing.

The Lower Thames Crossing first had costs of £3.4bn in 2014 (this included updates to mitigate some of the worst concerns by Kent, which was priced as costing £0.25bn, adding 7.3%, so about half that is the HS2 mitigation figure) it's now expected to cost around £10bn, maybe a low as £9bn Add inflation to £3.4bn and you get to £4.5, so even £9bn is +100%. As such the cost over runs for this project are probably worse than HS2 (possibly as bad as we don't have accurate costs for all of phase 2 of HS2 so it could be a little higher than the numbers used, but to get to +100% it would need to be around £113.4bn without the extra £5bn or £122.4bn with it).

Whist there's been calls in the press for the scheme to be killed off, the politicians haven't done so. You could have funded a significant amount of the new infrastructure projects in the Network North Document (i.e. excluding things like filling of potholes)

The Stonehenge Tunnel is also not great when it comes to costs (it's much harder to find accurate numbers), again there's concerns that the costs are out of control, yet it too is still going ahead.

If it's reasonable to cull HS2 it's even more reasonable to cull the Lower Thames Crossing due to costs being out of control.

Having said that, it's well know that building inflation is generally higher than the main rate of inflation and so it's no great surprise that these projects are where they are.

It's also no surprise that those who want lower taxes but still all the services which can only be delivered by paying taxes (who often also don't think that walking, cycling and public transport benefits them) are also likely to be opposed to spending on public transport but are happy not to hold road schemes to the same standards.

It appears that the current government follow this thinking. The questions which many perhaps need to consider, are they happy for road schemes not to be held to the same standards and do we want to be governed by those who think this way?

It's a reasonable answer to say that you are happy for both of these things to be the case. However don't be surprised when others who disagree with one or both of these then disagree with you.

However, I suspect that there's quite a few who have been happy to follow the lead of those in government without asking themselves these questions and may actually (naturally) disagree with these two points.

 

[Nicholas Lewis]

Despite expecting this sort of thing from Starmer, I am still strangely annoyed at this decision. As a left-leaning voter with an interest in railways and a desire to see Britain's network be better, Labour are honestly not selling themselves to me as a genuine option for the next election, and that is a real shame.

Remember at the moment Labour are utterly desperate to be seen as economically competent so if he had suggested it would be reinstated Torys would have used it to demonstrate that "there you go they will raise your taxes and go on a spending spree". So they have to stay silent and we need to be patience

Most important thing, confirmed by Sir John Thompson at Transport Select Committee last week, that the land wont be sold anytime soon as they have a stack of issues to work through and aren't exactly getting on with it so land corridor will be protected and Labour can at least put a pause on it all. Also given Labour keep pushing growing the economy as their centrepiece national infrastructure is key to that.

 

[HSTEd]

What fraction (presumably large) of the benefits of the WCRM were not delivered?

Well 140mph and moving block signalling, with the latter the core of many of the promises that we being made about the project.

 

[The Planner]

Well 140mph and moving block signalling, with the latter the core of many of the promises that we being made about the project.

Still delivered a theoretical 66% uplift in capacity.

 

[Bald Rick]

Well 140mph and moving block signalling, with the latter the core of many of the promises that we being made about the project.

Those aren’t benefits.

WCRM actually delivered more capacity for long distance, London Commuting, regional and freight services than was specified at the outset (whenever you deem ‘the outset’ to be). It also delivered better journey times for many flows than anticipated. Where it fell short of the PUG2 specification (which was abandoned no later than 2001) was purely on journey times, but some of that was due to adding in stops for commercial reasons, and adding in dwell time for operatonal reasons that were obvious to everyone excelt the Virgin commercial team at the time. The journey time loss through non provision of 140mph was a couple of minutes. Barely a scratch on the benefits case.