UK’s £33bn high-speed line gets cautious welcome

The Commons Transport Committee, which scrutinises the actions of the UK government’s Department for Transport, has concluded there is a “good case” for the planned £33bn High Speed Two rail scheme, while outlining a number of provisos and implied criticisms.

There is a “good case” for the UK’s planned £33 billion (€37 billion; $53 billion) High Speed Two (HS2) rail project, according to a report by the UK Parliament’s Commons Transport Committee, which examines the expenditure, administration and policy of the government’s Department for Transport.

The report said that the high-speed rail network, designed to link London with major cities in the English Midlands, North of England and Scotland, would “provide a step change in the capacity, quality, reliability and frequency of rail services between our major cities”.

It added that the high-speed line would offer economic and strategic benefits not available through conventional lines; help to rebalance the economy and bridge the North-South divide [in affluence]; boost growth; and would be affordable, at a cost of around £2 billion per annum over 17 years.

However, the report was not the ringing endorsement that government ministers may have been hoping for. It said that the government must “firmly commit” to the so-called “Y-network” (linking the project to the northern cities of Leeds and Manchester) before seeking to get parliamentary approval for the link from London to Birmingham in the West Midlands. It said it was “concerned” that, under current plans, the high-speed lines would not reach Leeds and Manchester for more than 20 years.

The report also insisted that the government “must do more to promote local and regional growth strategies” to maximise HS2 benefits, and said that investment in HS2 “must not lead to reduced investment in the ‘classic’ rail network”. Furthermore, it said it was “disappointing” that such a major strategic scheme was being designed and assessed “to a large extent based upon the value of travel time savings which are not universally accepted”.

The private sector will probably take comfort, despite the report’s occasionally equivocal nature. After all, a recent report by independent free market thinktank the Institute of Economic Affairs described the project as a “white elephant” and accused the government of “very optimistic” estimates regarding demand growth for HS2.

In June this year, it emerged that the government was considering leasing the HS2 rail line to the private sector one year after it is completed. While construction of the line would be on the government’s balance sheet, the private sector would be called upon to help fund stations.

HS2 is not expected to start construction until 2017. The first stretch of the line is expected to cost £17 billion, and would connect London to Birmingham. The full scheme is not expected to be up and running until 2026.

In November 2011, Canadian pensions Borealis and the Ontario Teachers Pension Plan reached financial close on a 30-year concession to run the UK’s first high-speed rail line (HS1) for £2.1 billion. The 110-kilometre HS1 line connects London with the Channel Tunnel in Kent, which in turn connects England with France.