HS2 to be ‘mostly public money’

The UK government has given its clearest public indication yet that it intends to shoulder the majority of the costs for the development of the country’s second high-speed rail line, known colloquially as HS2.

“The government is proceeding with HS2 on the basis that the costs of the project will be met in large part from the public purse,” Simon Burns, Transport Minister, told Parliament.

“While my department has made clear that we will explore opportunities for third party funding and financing as the project develops, we are not at a stage in the process where we can say what proportion of the project costs might be met this way,” he added.

The £33 billion (€41 billion; $53 billion) HS2 project intends to build a Y-shaped network linking London to Birmingham, Manchester and Leeds , with stops in the East Midlands and South Yorkshire, and direct links to Heathrow Airport and to the country’s first high-speed rail line, HS1, which links London to Paris.

But the project has been mired in controversy more or less since it was announced, with many openly questioning its value for money. Recently, a group of MPs signalled they want to ask Prime Minister David Cameron to release an assessment by the Major Projects Authority unit, which allegedly classifies the project as “amber/red,” meaning the line’s future might be in doubt, the Financial Times reported.

When the line was announced earlier this year, the government said HS2 will generate up to £59 billion in benefits over a 60-year period. However, it admitted that phase one of the project would only create about £1.4 for every £1 invested, which it said lay in the “lower end of the medium value for money categories”.