A new report from the National Audit Office says the Department for Transport and HS2 Ltd underestimated the complexity and risk of HS2 from the start.
The DfT’s latest estimates put the cost of the project at up to £88bn, 58 per cent higher than the funding currently available. However, estimates from other sources put the overall cost at more than £100bn, with services on Phase 2 lines to Leeds and Manchester not complete until the 2040s. Although work is already underway on some parts of HS2, main construction is yet to begin and a final decision on the project’s future is due in the coming weeks.
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According to the NAO, the original timeline for Phase 1 of the project from London to Birmingham was overly ambitious and based on previous infrastructure programmes that did not have the same scale and complexity as HS2. The NAO issued warnings about the timeline in both 2013 and 2016, but HS2 Ltd and the DfT failed to heed them and only revised its schedule for the opening dates in April 2019, by which point estimated costs for Phase 1 had risen from £31bn to £40bn.
“There are important lessons to be learned from HS2, not only for the Department for Transport and HS2 Ltd, but for other major infrastructure programmes,” said Gareth Davies, head of the NAO.
“To ensure public trust, the Department and HS2 Ltd must be transparent and provide realistic assessments of costs and completion dates as the programme develops, recognising the many risks to the successful delivery of the railway that remain.”
The NAO reports states that HS2 Ltd did not account for the level of uncertainty and risk in the programme when estimating the costs of Phase 1 in April 2017. It used an inappropriate method for calculating contingency funding at such an early stage of development, setting aside just £7bn.
Commitments made to parliament regarding increasing tunnel lengths and installing noise barriers along sections of the track have further added to the overall cost. The NAO says that HS2 Ltd now has greater confidence in its figures after revising its estimate for Phase 1, but also points out that significant challenges remain in completing the project and delivering value for the taxpayer.
Michael Gross, former owner of the Euston Estate which was sold to HS2 Ltd under compulsory purchase, said that even though the NAO’s report was critical of the project, it did not paint a complete picture. He claims land purchases between London and Birmingham were underestimated by a factor of five.
“Whilst the NAO report makes grim reading for HS2, it was out of date even before it was released,” said Gross. “This week’s leak from the Oakervee Review predicts that a total spend of £107bn is far more realistic. This would put the project closer to 95 per cent over available funding. A high speed rail link between London and the north remains a fantastic concept. However, the current management team has made HS2 unaffordable.
“They continue to deceive the taxpayer that an increase from £33bn to £107bn is somehow the cost of doing business. Untrue. HS2 Ltd repeatedly deceived Parliament and the taxpayer. They undervalued thousands of properties denying landowners up-and-down the line fair and reasonable compensation. HS2 Ltd were well aware that their £4bn fund to purchase all the land between London and Birmingham was short by fivefold.”
……..”fantastic concept”…….”unaffordable”……
Sums it up perfectly, unfortunately.
This is the result of the usual issue, principally that the proponents of a scheme trivialise or ignore inconvenient facts. They prefer to believe their own visions and goal over and above reality, usually because the inconvenient facts undermine their business case. Instead of acknowledging problematic and consequential issues which allows the means and recognition of solutions to those issues, they ignore them to their peril and eventual embarassment. Politicians in particular believe their own propaganda, as we have seen with recent dismissive and frankly patronising if not disgraceful comments from Donald Trump and his lickspittles over a 17 year old from Sweden. Facts get in the way of pursuing their own preferred goal, which in some cases is really only for their benefit. While complaining about the costs (which they don’t actually personally have to meet) they ignore the real purpose of the project which always and only was to facilitate easier (?) communiting to London from the more remote fringes of the country. Thereby turning swathes of the North to be nothing more than dormitory suburbs of Greater London.
HS2 has been an emotive topic in the press for years. I have no idea as to whether it is a good or bad thing, but the arguments about cost over-runs are disingenuous: all large complex projects over-run. Look at Cross-rail, Trident, Queen Elizabeht II, Tunnel etc: none would have started if the pessimistic costs were used, or adequate contingencies applied at the planning stage.
What is important is that the comparisons and bases used are fair and sensible. To pretend that the costs and timescales of most of these are other than best estimates is self-delusion. On top of this there is always a long delay between technical approval and financial closure: commonly years. It is essential that long term projects are evaluated as thoroughly as possible, then the best informed decision is made.
Sadly, most of the UK media are dominated by pressure groups whose lobbying dominates all rational thinking: the BBC and ITV news being the worst affected.
As Eurostar trains do not go above 200 mph, it seems pointless for HS2 to go above 200 mph. Would that save money? Would it save valued countryside features? Being slightly slower might let you go around sensitive sites rather than straight through them.
Otherwise scrap HS2 & put the money into other rail & road projects.
Sadly it appears that the UK has been run by dreamers and purveyors of vapour ware for the 10+ years.
It’s time some of these white elephant projects (inc Hinckley C) were publicly investigated for costs and real benefits, BEFORE money was committed to them.
Then let the NAO audit ALL contracts as let,
Failure to plan thoroughly and effectively is planning to fail.
Your artists impression of the train crossing a bridge sums it up. No ugly catenary stucture and cables! A train that blends into the sky, and a perspective that flattens it out by a factor of 2. What are we selling?
The whole project is ill conceived and is a vanity project cooked up allegedly to solve capacity issues (What capacity issues? It is just badly managed), connectivity (Not good for East Anglia, Wales, the West of England and the North beyond Leeds) and economic growth. The money would be much better spent on efficiently and effectively wiring up a lot more the rail network for passengers and freight traffic and yield truly national, regional and local benefits. This means keeping the DfT & Network Rail out of it. Their “expertise” on the GW routes is clearly wanting (See the NAO report and shudder).
Mega projects can be delivered on time and on budget. Road projects are good at this. Rail projects get gold plated and are invariably late. Key questions as to how much more could be squeezed from the existing network on a sustained basis need to be asked to determine a base line against which incremental investment schemes could then be introduced. Re-opening lines closed in the 1960s and 1970s in a bout of economic vandalism could feature as part of this approach. Some significant boring out of lines for high cube containers or trailers (eg Trans-Pennine) could be fed in.
Moving passengers between a few cities at high speed may not be the most cost effective strategy.
I agree with Phil Mortimer’s comments about the vanity and a dubious and vague capacity argument.
The Feb 2019 Williams report reveals some of the figures relating to the importance of railway to the economy:-
2% of trips are by railway except for the commute to London (where it is nearly 50%)
freight now comprises around 6% of the total traffic on the rail network…which equates to 9% of domestic freight
— so it is hard to see the capacity arguments benefiting the economy – except for those commuting to London.
So it might be worth the NAO considering the transparency of the touted persistent benefits to the economy as a whole.
Indeed if the freight aspect is important to the economy then establishing and re-establishing links into the rail network is the important way forward. {Though the railway reviews seem to focus more on the existing rail tracks rather than considering railways as part of the economic infrastructure}
Though Phil does mention increasing the size of some of the tunnels there are also other aspects – such as increasing the number of stations and network links and improving the road rail interfaces (so part containers and full containers could be transferred). It is interesting to note that in some countries tram freight is being developed…
A further worrying issue is the combination of the HS2 franchise (unless government run!) and the existing WCML franchise. This smacks of attempting to drive passengers onto HS2 when the conventional route options would be just as if not more attractive. I suspect there is also an attempt to stop other operators taking up slack on the WCML and offering competing services which could be just as attractive as HS2 on time and probably cheaper. It all looks like some sort of monopolistic stitch up conjured up by the supporters of HS2 using any means possible to press the case for the indefensible.