Monday 20 January 2020

HS2 - the costs get worse but what options are there?

You may expect the us here at C@W to deplore the rising costs of HS2 (hint, looking back to 2013, we have amazingly been consistent on this) as the gross workings of an excessive public sector.

The sheer rise in costs in incredible, nearly quadrupling from the initial estimates and there are some reasons why which make it so:

1) Ploughing through the home counties and London has led to a lot of legal challenges as a lot of expensive compulsory purchases of land. In China, where they doe things more cheaply, they given you an option of leaving your house or being bulldozed within it - saves on funeral costs too.

2) In a bid to be green a lot of allowances have been made not to damage the countryside. Again in many countries the simpler and cheaper option is to build up and over the forests etc on a raise trainline. It looks terrible and long term is more costly to maintain but is much cheaper to get going with.

3) With a dearth of other big contracts to do, the private companies involved have gold plated the contracts to extract as much value as they can from the Government.

Despite this, what else are the Government going to do to revitalise the North. In a less climate change affected state we could build a ton of new airports like the US and have much easier access to flying but that is not 'going to fly' with politicians today. There are no easy choices that will enable large scale upgrades and whilst extending motorways is all very well that needs to be done as well, not instead of HS2.

Additionally, electric trains can be run off a main grid so again they are long term a more sustainable form of mass transit.

All in all, it will be very disappointing if the Government cave in to lobbying and cancel this project at a time when UK borrowing costs are still near all time lows. If anything we should be pressing the button on these projects and looking to extend the service to Scotland and Northern Ireland over the next few decades.


Sobers said...

The costs are over £100bn and they've not even started yet. I'd put a pound to a penny that the costs once the last sleeper is laid will be at least £150bn, maybe even £200bn.

A bit of googling suggests 'The North' comprises about 15m people, so by my maths thats about over £10k for every man, woman and child. Perhaps they might prefer the cash?

DAD said...

"Additionally, electric trains can be run off a main grid so again they are long term a more sustainable form of mass transit."

But then we need to spend '£squillions' on new (additional) power plants.

Anonymous said...

It'll be more like £trillion by the time it's finished in a few decades

david morris said...

"This article is sponsored by the railway industry"

DJK said...

"...what else are the Government going to do to revitalise the North"

There's plenty else they could do with 100Bn. How about building metro systems in Birmingham/Manchester/Leeds, etc. The last metro built outside of London was the Glasgow Subway in 1896. (Newcastle doesn't really count, as it's mostly a reuse of suburban lines closed in the 1960s). Or how about a new cross-pennine rail link, or upgrading the A1 to motorway throughout.

Bringing Birmingham within commuting distance of London is not revatalising the North.

Nick Drew said...

It's Keynesianism all the way

Same with the nukes (HPC, SZC etc) of which epic cost, several billion is simply civil engineering - and UK firms / unions get a decent crack of the whip in the steel-and-concrete aspects, unlike the reactors etc which are froggie all the way

I know 0 of macro-economics but I do recall there are times when Keynesian schemes work well, and time when they are deeply counterproductive. Anyone have a view as to where we are in that cycle? (I assume CU's point abt interest rates is germane to this)

Anonymous said...

A few of those billions would pay for a big improvement to the national network of cycle paths.

Better transport within the North is more urgent than connecting London to Birmingham (which is not in the North -- the North begins at Hull).

Don Cox

DJK said...

The cost of HS2 is plainly wrong. The original 112 miles of the London and Birmingham railway was built from scratch in 1833 with 4.5 million of capital. At the time, this was likened to building the pyramids. The 4.5 Mn includes everything needed to create a working railway system from scratch. The interwebs give UK GDP as £495 million in 1833, so the railway was built for less than 1% of annual GDP.

Current GDP is 2.622 trillion, so the 100 Bn of HS2 represents nearly 4% of (a vastly greater) GDP. For me, that really doesn't pass the smell test.

Anonymous said...


The extra 3 % accounts for the Finance, HR and Legal departments. Didn't have to worry about those in 1833.

DJK said...

Anon: 3% of GDP? That's a lot of HR. Against that, the modern builders can use earth-moving machinery, as opposed to employing 20000 navvies for five years. Surely, it should be cheaper to build a railway now?

Matt said...

Agree with all the comments before mine that the North doesn't need a marginally faster train set to London.

It needs investment across the North. Liverpool, Manchester and Leeds could be connected by much more efficient train and road networks instead for example.

E-K said...

What are they going to do to revitalise the North (and many other places for the same money for that matter)

Work on the many bottle necks that exist in the present transport infrastructure.

Roads: build bypasses, widen motorways, fill potholes

Rail: build longer platforms, passing loops, take out level crossings, cut down trees, shore up banks and line tunnels, defend sea walls.

Not only would these things have a similar rejuvenating effect that a triple bypass has on a generation X smoker it also delivers fully on Keynsianism and keeps money out of lawyers' pockets.

They'd even have money left over to enable the police to enforce drugs law.

Most of the HS2 engineering will be done by German contractors in automated machinery as it is.

HS2 is an utter waste of money and a vanity project so bloody typical of a political class obsessed with the spectacular rather than the mundane - dreary little issues they are elected to put right.

E-K said...

By the time it's built rail will be obsolete anyway. Either we're going into a super version of VR or there will be fully automated and trouble free maglev.

Charlie said...

It's already obsolete, and northerners would much rather the money is spent improving local commuter routes. Have you tried to commute into Leeds or Manchester by train in the last ten years? A sardine would feel uncomfortable. Night-time transport could do with some money spending on it too - last bus out of Leeds on a Friday/Saturday night is 22:30 and has been for the last forty years.

I know the green lobby don't like it - the A1/M1 combo is woefully under capacity at peak times. Why the A1 isn't M-Way all the way to Scotch Corner is beyond me.

But the green lobby will like this - how about some decent cycling provision? The north is still far behind the south in this respect, despite generally being more "spacious".

dearieme said...

Shame, shame, CU, or are you just teasing?

Supporting HS2? Poppycock!

Anonymous said...

E-K - I'm surprised at you. Like everything else, the Brits did maglev first - then gave it up. See nuclear electricity, passenger jets, hovercraft, Harrier jets, LCDs etc etc


"The world's first commercial maglev system was a low-speed maglev shuttle that ran between the airport terminal of Birmingham International Airport and the nearby Birmingham International railway station between 1984 and 1995. Its track length was 600 m (2,000 ft), and trains levitated at an altitude of 15 mm [0.59 in], levitated by electromagnets, and propelled with linear induction motors. It operated for 11 years and was initially very popular with passengers, but obsolescence problems with the electronic systems made it progressively unreliable as years passed, leading to its closure in 1995."

andrew said...

It is a surprise to very few that the one big thing holding the uk back (outside london) is the american standard of the public transport system

Nessimmersion said...

Surely capitalists should be aware of the sunk costs fallacy?
EK has it - best value to be obtained from money still to be spent on infrastructure.

Peter MacFarlane said...

HS2 won't revitalise the North, it will just bring Birmingham into London's commuter belt.

Wildgoose said...

Linking up the North is more important than making even more links to London, and that (inevitablty) start in London.

Having said that, I do recognise that London has a rail capacity problem. So it probably makes sense to build the initial leg to Watford - but then STOP.

Germany is successful partly because in places like the Ruhr Valley they have small and medium towns with fast connections between them that make them work as part of a greater whole. THAT is what is needed here in the North. HS3, not HS2.