WP REF HS2 SUMMARY DATA again WEB

Our July 2013 piece available, here http://www.transport-watch.co.uk/hs2-economic-analysis-laughed-out-court-july-2013 , explains why the original Economic analysis should be laughed out of court.

For more laughter we now have the KPMG report of September 2013, with the title page caption, “HS2 engine for growth”. The introductory letter of apology, following the front cover provides:

“This document is issued for the party which commissioned it and for specific purposes connected with the captioned project only. It should not be relied upon by any other party or used for any other purpose.

We accept no responsibility for the consequences of this document being relied upon by any other party, or being used for any other purpose, or containing any error or omission which is due to an  error or omission in data supplied to us by other parties”.

In the light of that we ask, how lacking in confidence can the authors be?

The main finding is that there will be Wider Economic Benefit’s, WEBs, valued at £15bn per year, from a “Y” shaped network connecting London to Birmingham and Manchester, and Birmingham to Nottingham, Sheffield and Leeds.

The analysis raises the question as to whether the theory could not be used by Government to justify spending vast amounts of taxpayers’ money on every loss-making enterprise in the land. After all this one, as set out in our previous, creates an actuarial loss of nearly £70bn, a loss which depends on laughably high passenger forecasts – implying that the actual loss is likely to be an amusing amount above the £70bn.

That aside, here is the new thing. The Economic Analysis of January 2012 provides, at para 3.2.1, 270,000 daily HS2 trips at Euston plus 110,000 inter-region HS2 trips between the other cities served, providing a total of 380,000. Table 2 claims that 24% of those passengers, i.e. 91,000, are generated by the scheme itself, representing circa 45,000 round trips. It is only those generated, or new trips, which could generate the alleged £15bn WEB’s since all the other trips arise in the absence of the scheme.

Dividing the £15bn by the 45,000 yields an astonishing third of a million pounds for every generated daily round trip, or, if we assume 300 effective days per year, £1,100 for each generated return trip. Who in their right minds could ever believe that?

In our previous note we expressed the view that if accountants behaved as does the rail lobby, and those promoting HS2 in particular, then those accountants would soon be in prison.

We go on to say that the facts suggest a corruption at the heart of the nation.  Instead of officials receiving bundles of notes in brown envelopes, they take vast salaries in return for the “unpalatable task of tricking the Government on a mammoth scale”, a quote taken from Stewart Joy’s book, ‘The Train that Ran Away’, published in 1973.  Joy was previously the Chief Economist for British Railways. He goes on to say, “These men were either fools or knaves”.

In what category do our politicians fall if they believe, or pretend to believe, this nonsense to do with High Speed Rail, let alone those who produced the reports?