Category Archives: HIGH SPEED RAIL

Why transport projects keep going wrong

Posted on by
2

All over the world transport projects “go wrong”, in the private sector as well as in the public sector. It is not just a British problem – though our disasters seem to be worse than most. A common – almost universal – error at the start of most transport projects is unrealistic initial cost estimates.

There are three major generic causes of cost overruns:

  • The high risks of technological innovation. (The “frontiers of knowledge” are also the frontiers of ignorance!)
  • Changes in project specifications and designs (especially from interfering politicians).
  • Evolving safety and environmental demands (which often seem to get absolute priority, whatever their cost).

All three were prominent in the three government transport project disasters in my 2007 book They Meant Well, Government Project Disasters, namely: The R101 Airship; Concorde; and the Channel Tunnel high-speed rail link to London (HS1). 

But Flyvbjerg (with co-authors), who is the leading expert on this topic, has a more brutal view:

“Cost underestimation and overrun cannot be explained by error and seem to be best explained by strategic misrepresentation, namely lying, with a view to getting projects started. … [They] have not decreased over the past seventy years. No learning seems to take place.”

That is a shocking conclusion, suggesting that, despite past evidence, contingency allowances for cost overruns are still usually much too small. Post-project audits should be essential for all major projects, whether they have “gone wrong” or not.

Revenues from transport projects are also subject to huge margins of error, often being wildly over-optimistic. For example, the (private sector) Channel Tunnel had predicted sixteen million Eurostar passengers in its first full year; but the actual number was only three million. (The 1987 forecast for total Channel Tunnel passengers in 2003 was forty million but the actual number was only fifteen million.) Both passenger volume and average level of fares seem to be hard to guess accurately, especially if one ignores potential competition. 

A further danger for government projects is reluctance to abandon projects even after it has become obvious that they are not viable. According to Peter Jay, Concorde’s advocates constantly employed four red herrings: patriotism; the need to keep up with technological progress; unemployment; and the importance of not offending France. (Britain was trying to join the Common Market at the time!) Roy Jenkins, Air Minister in the first Wilson government, tried to cancel this Anglo-French project in 1964, but soon had to un-cancel it!

For government projects, “national prestige” was often a factor. (Speaking about Concorde, Jo Grimond, the Liberal Party leader, said: “Whenever I hear the word ‘prestige’, my heart sinks.”!) My impression is that “national prestige” was rarely a factor in starting a government project; but was likely to come into play once a project had started to go wrong.

In managing transport projects, there are three essentials:

  • Regular reviews, focusing on the latest estimates of the amount and timing of future cash inflows and outflows.
  • Up-to-date market research to try to reassess likely demand where relevant.
  • An “exit champion” if need be, to argue the case for abandonment.

I would even expand the third point and urge the appointment of at least two “devil’s advocates” from the very start of a project (for private sector projects as well as government projects). Their function would be to question everything – and to criticise and oppose where they thought that sensible. The purpose of formally appointing them would be to legitimise their actions. Otherwise, anyone who queries management decisions is likely to be regarded almost as a traitor. (At least two such appointments, because it is much easier to ignore a single person’s views.) Recommending abandonment – which is difficult – would be one of their potential tasks.

Many private sector projects go wrong too; but I suspect they can be quietly dropped sooner and with less fuss than government projects, where political embarrassment is always likely.  (Cancelling HS2 is a partial exception, because probably a majority of the public think that was a sensible decision, merely delayed for far too long.)

In all six of the government projects in They Meant Well, many of the management failures (though by no means all) were really down to politicians: publishing misleading estimates; installing inadequate or over-complex organisations; appointing incompetent managers; insisting on excessive secrecy (a special weakness of British governments!); funking abandonment; or generally interfering in far too many details, which usually leads to extra costs and expensive construction delays.

Before politicians decide to embark on large quasi-commercial projects, they should provide convincing answers to two questions:

  • Why won’t a private enterprise company undertake this project? (If it will, let it.)
  • Why does government, in contrast, think the project worthwhile?

If private sector companies are unwilling to get involved, one obvious reason may be because they think the risks – on either the costs or the revenues (or both) are too high. Political pressures may push governments towards going ahead, even if they are aware of the likely financial outcome (which they may care about less than profit-seeking businesses.)

Flyvbjerg et al. conclude that even with “government projects”, a significant part of the capital required should be genuine risk capital, with private financiers bearing the consequences of a wrong decision to go ahead. That should help ensure a high degree of involvement by private lenders, which in turn should lead to more effective monitoring, better cost control and also better controls against construction delays.

D.R. Myddelton

Image: gov.uk

Why it’s still worth cancelling HS2

Posted on by
Reply

Ministers have already wasted an astounding £30 billion on High Speed 2 – but it’s still worth scrapping this ill-conceived vanity project.

The government has fallen victim to the sunk-cost fallacy. It continues to throw good money after bad. The saying “When you’re in a hole, stop digging” is particularly apt.

Cancelling HS2 now would enable the remaining expenditure to be reallocated to higher-value uses, generating far greater returns than continuing to squander vast sums on this loss-making scheme.

Moreover, several billion have gone on purchasing property along the route. Much of this could be recouped – ideally with the victims of the land-grab getting first refusal on their former homes and business, wherever possible.

Scrapping HS2 would also have the benefit of scuppering local vanity projects linked to the scheme – whether loss-making tram links or “regeneration” projects to create state-funded Potemkin villages next to the stations.

On the downside, there would clearly be significant costs from cancelling contracts, laying off staff and so on. But these would be relatively small compared with the ballooning HS2 budget.     

About £27 billion of the total spent so far has gone on Phase One, the section between London and Birmingham (recent government figures have been adjusted to 2023 prices).

The official target cost for Phase One is approximately £49 billion in 2023 prices. Since more than half of this has reportedly already been spent, it’s likely the final bill will be far, far higher.

An independent estimate from a credible source predicted Phase One would end up costing around £67 billion (adjusted to 2023 prices). This looks more plausible than the government’s figures – though the scope of the project has been and remains subject to change, making it problematic to compare like with like.

Much will depend on what happens at Euston. The last 4.5 miles of the line, tunnelled under Inner London, together with the expansion and remodelling of the station, could easily end up costing taxpayers around £10 billion – plus the potential for massive additional costs to improve local transport links to the terminus.    

It’s possible ministers and officials will cook up some way of putting a big chunk of Euston’s costs off-balance-sheet in order to artificially reduce the bloating HS2 budget. But it’s also possible they will abandon this part of the project entirely and terminate trains at Old Oak Common permanently.

Uncertainty about the cost, completion date and scope of Phase One makes it difficult to estimate the costs and benefits. Worse still, there is already a substantial literature questioning the assumptions used to create the various iterations of HS2’s “business case”. For example, the shift to virtual meetings and working from home create a very big question mark over the number of high-value-of-time, high-fare-paying business travellers who will use the new line.

Official figures for HS2 Phase One suggest that the costs are roughly equal to the benefits. The benefits may be slightly higher than the costs if somewhat nebulous “wider economic benefits” are factored in (these are typically relatively small for long-distance routes). However, if realistic assumptions are used for the calculations, the costs are likely to far exceed the benefits (one important aspect of this is discussed below).

It will be interesting to see how escalating costs and other problems affect the government’s next “business case” for HS2 Phase One. Will the figures be manipulated to keep the benefits just above the costs – or will they finally throw in the towel?

Moreover, every pound taken via taxation (or borrowed by the government to be repaid through future taxes) costs the economy significantly more than a pound in total. Taxation and government borrowing impose additional economic damage beyond the direct cost – for example by making certain economic activities no longer worthwhile and incentivising the misallocation of resources. The same is true of printing money to fund schemes – effectively a hidden form of taxation.

In other words, taking these additional costs into account, the benefits of HS2 would have to be substantially higher than the direct costs for the project to be worthwhile (the ratio depends on the nature of the state funding).

In any case, there are plenty of transport schemes that are much better value for money than HS2. The benefits often outweigh the costs by a factor of three, four, five or even more.

Let’s assume, for the sake of argument, that Phase One costs an additional £40 billion from the present to completion (in 2023 prices). If the scheme were cancelled now and that £40 billion invested in much higher value transport projects, it’s plausible it could generate (for illustrative purposes and simplicity’s sake) say £100 billion in benefits. This would far exceed the purported benefits from Phase One (see here for some official estimates and further details of their methodology; note that the “cost” in such calculations is not the same as the project’s budget).

And unlike HS2, such an alternative could provide a strongly positive return even when the wider costs of taxation and/or government borrowing are factored in.

There’s a problem with this solution, however. Politicians and officials often disregard economic analysis when deciding which transport schemes get the go ahead. While HS2 is a particularly egregious example, given its mammoth scale, the rot has also spread to smaller rail projects, road schemes, cycle lanes and so on.

It’s not unusual for projects to get the go-ahead even though the costs outweigh the benefits – and this is based on the official analysis – often “cooked” to make the project look better than it really is in order to please political backers and other vested interests.

So, it’s possible the illustrative £40 billion saved by cancelling HS2 Phase One could end up being wasted on other uneconomic schemes – though it seems unlikely they would be worse than HS2.

Ministers could avoid this outcome by introducing a strict minimum benefit-to-cost ratio for transport projects. If proposals failed to reach this threshold – set quite high to take account of exaggerated benefits, unrealistic cost estimates and other manipulations – they would automatically be refused.

Unfortunately, politicians are typically content forcing taxpayers to fund uneconomic schemes in order to “buy votes” in target regions or curry favour with powerful special interests.

This depressing context makes another option more attractive. As in many Western nations, the UK’s public finances are in deep trouble, with borrowing at dangerously high levels – vulnerable to disaster in the event of a severe external shock. This makes cancelling HS2 to reduce government borrowing a particularly attractive option. It could form the centrepiece of a programme of radical spending cuts, which might also include scrapping other vanity projects.

Restoring confidence in the public finances would have huge economic benefits: encouraging investment, boosting productivity and raising the prospect of future tax cuts. Isn’t this a good reason for ministers to stop digging?   

Richard Wellings

Image: gov.uk

Why the UK needs the Rotodyne and not HS2

Posted on by
5

The massive investment required by HS2 is wasteful and will provide a very limited set of benefits. This article argues that a better use of funds would be the creation of a compound gyroplane fleet and rooftop landing sites in certain areas of some cities.

The first point to understand is the physics of high-speed transport. An object moving at twice the speed requires four times the energy. An object moving at four times the speed needs sixteen times the energy.

Thus, a train at 300 km/h is sixteen times more energy greedy than one at 75 km/h, which also should explain to the non-engineers and non-scientist minded why freight trains travel so slowly. High-speed rail is the very opposite of energy efficient. Electric high-speed trains travelling at 300 km/h+ are some of the worst energy guzzling machines we have.

The merit function for high-speed rail puts journey times and city centre to city centre connectivity as high priorities, far above energy efficiency, landscape preservation and flexibility.

For any pairing of cities that does not include London, this project is a bust. Yet the entire country is forced to pay for it.

What worked in Japan was a curious mix of ultra-high population density linked with a small number of population centres on flat plains.

In the UK, with its rolling countryside and older tracks, the 200 km/h tilting Advanced Passenger Train (APT) (although a victim of politics) was the only sensible choice. It exists today as the Pendolino, built under licence from Italian firms within the UK, but mostly abroad.

To create high-speed connectivity for the subset of passengers who require that option every day, the compound gyroplane is a very good choice. This can serve any two points within the UK in a maximum of two hours – not dissimilar to a stratosphere cruising jet, but without the need for expensive airport infrastructure. If the take-off areas are secure, then such a vehicle can even land on rooftops in the City of London.

The compound gyroplane would work for any and every type of person, in every area of the UK, while being a massive export earner and long-term job creation scheme.

The Fairey Rotodyne was an aircraft developed from 1956 to 1962 by the UK aeronautics company Fairey, later merged with Westland. It was a compound gyroplane with propellers and a large main rotor which was operated by “tipjets” – small combustion engines at the extremities of the rotor which provided a jet thrust to move the rotor for take off and landing. The main rotor itself was otherwise unpowered and it would freewheel in flight, providing lift.

This article examines the potential benefits of the craft in terms of providing an addition to the transport options in the United Kingdom. In order to assess these, it is important to engage in some analysis of existing transport modes and their benefits.

The physical geography of the United Kingdom is similar to Japan and New Zealand – a long, thin archipelago. However, the population distribution on the main island, Great Britain, does not lend itself to the construction of high-speed rail in anything but three operational axes which are economically viable. 

The high quality and high speed of the East Coast and West Coast mainlines mean that a good enough quality of travel can be obtained there. Going any faster than 140 mph (225 km/h) is not optimal, due to the energy use and increased cost.

A faster service could be obtained for the comparatively small number of customers who really need to go from London to Newcastle in under 1 hour by using helicopters or small aircraft. At a similar price point to the business class ticket on the high-speed rail system, there is a niche that can be met by use of a hybrid helicopter/aeroplane, which could thus also link the island of Ireland, Isle of Man, Isle of Wight, Scilly Isles, Inner and Outer Hebrides and Faroes. Charter services could perform multi-city stops and hops.

Travel options matrix

The variables we wish to examine are: speed, cost, capacity, energy efficiency and distance.

High-speed rail occupies a specific niche of the transport equation – high speed, high cost, low energy efficiency and medium capacity. The sweet spot for this mode is long distances between 150 and 600 km with large (100+) numbers of passengers.

Low-speed rail is low speed, relatively low cost, highly energy efficient and is almost always high capacity. The distance of this mode of travel is anywhere from 50km to 1000km. From 50+ passengers.

Minibus/coach travel is the lowest cost, highest capacity, low to medium speed, medium energy efficiency and very flexible. The distance of this mode of travel is anywhere from 50km to 1000km. 20+ people. Linking islands is only possible with the use of ferries.

Car travel is medium cost, medium speed, low capacity, low energy efficiency and the most flexible of all the ground transport options. The distance of this mode of travel is anywhere from 3km to 1000km. Linking islands is only possible with the use of ferries

Aeroplanes are the highest speed, high cost, inflexible and need long distances for the cost-benefit analysis to make sense. They are only efficient (in both terms of cost and energy) with very large numbers of people and somewhat medium to very long distances. Apart from flights from the South of England to Scotland, Ireland or the North of England, this is not a viable option for intra-UK travel.

Helicopters are the highest cost, most flexible form of transport in the UK, though of very low capacity and abysmal energy efficiency. More versatile in terms of places that can be reached and at speeds comparable with high-speed rail, they are nevertheless almost prohibitively expensive for anything but occasional use. They are not a commuting option.

Within this matrix, there exists an unmet niche: that of high speed, medium to high capacity, low to medium cost, with flexibility comparable to helicopters.

Enter the Rotodyne compound gyroplane.

Eric Matthew W. Masaba

Image: Rotodyne 2 by L. Chatfield, Flickr (CC by 2.0), cropped.

Should HS2 be converted into a road?

Posted on by
1

Imagine the following nightmare scenario for HS2…

Phase One opens in 2033, around seven years later than originally planned, and tens of billions over budget.

To make matters worse, travel patterns have changed dramatically since High Speed 2 was first conceived. Routine business meetings now take place online, meaning demand for business travel has collapsed.

At the same time, a high proportion of professionals now work from home most of the week. They come into the office only occasionally and often avoid travelling during peak hours. The misery of long-distance rail commuting has largely been consigned to the past – at least for higher income groups.

HS2 still attracts a large number of passengers, though as with HS1, far fewer than forecast when the project was approved. The government has deliberately been slowing down services on the West Coast Main Line (WCML). As predicted, they have rigged the rail market to push more passengers onto the new route.

Competition is still a problem, however. Because few business travellers are using HS2, the vast majority of passengers are day-trippers, tourists, students and so on. They will switch to a slower journey on the WCML, the Chiltern Line, or even the coach if it saves them a few pounds. Inevitably this puts downward pressure on fares.

HS2 therefore faces financial disaster. Its construction was never going to be commercially viable, but it now requires heavy subsidies just to cover its operating costs.

And there are other clouds on the horizon. Driverless cars are finally being rolled out. While their top speed is lower, door-to-door journeys are often quicker than by HS2 – and far more convenient too, particularly for the elderly and those carrying luggage. The demand for rail is being further eroded.

HS2 has therefore become a major headache for ministers. They’ve already wasted tens of billions building the scheme and now it’s going to cost billions more to keep it running. In practice, this will mean cutting services on other parts of the network. After years of economic stagnation, the Treasury can no longer justify vast subsidies for the rail industry.

But there could be a solution.

Converting HS2 into a road has the potential to turn a heavily loss-making white elephant into a profitable business that could cover its operating costs and perhaps help to fill the financial black hole left by the project’s construction.

The government has claimed that up to 18 trains per hour, in each direction, could run along the southern section of HS2. Each train would carry up to 1,100 passengers. This amounts to roughly 20,000 passengers per hour. However, there is widespread scepticism that the planned frequency can be achieved in practice, particularly when many of the services are likely to experience delays on the legacy network before they join the new high-speed line.

Nevertheless, conversion into a road would massively increase potential capacity. Should the market demand it, the route could be managed to eliminate congestion and to maximise passenger numbers. Applying conservative assumptions, 600 coaches an hour, or one every six seconds, could carry 30,000 passengers an hour in each direction with 50 passengers per vehicle. (There are several real-world examples of busways achieving similar results). And obviously there would be relatively simple ways of increasing capacity further, for example by using driverless technology to reduce the gap between vehicles. A two-second gap – frequently observed already on motorways – equates to 1,800 vehicles per hour, or 90,000 passengers – around five times an optimistic figure for HS2.

As for journey times, it’s true that HS2 would reach a far higher top speed than the coaches. However, door-to-door journey times are what counts. The coaches would boast a far higher service frequency. Perhaps one would leave central Birmingham every minute. Better still, they could serve a much wider range of destinations, offering direct services into London and other places on or near the route from a large number of towns, villages and suburbs. Services could use the existing road network before joining and after leaving the former HS2. In this way, a far larger population could benefit directly from the new infrastructure.

Similarly, in London services could go to numerous destinations directly and wouldn’t have to terminate at Euston – perhaps continuing to the West End, City or Victoria Coach Station, for example. This in-built flexibility – which could also open up the route to shorter commuter journeys within the south-east – offers the potential of using the path of HS2 far more intensively than under existing plans.   

The shift in travel patterns detailed above suggests that an ultra-high-capacity route might not be needed. In this case, spare “slots” could be sold to cars and goods vehicles, raising additional revenue and taking pressure off the motorway network. A congestion-free road into central London could prove extremely valuable.

While it has not been possible to cover every aspect of railway conversion in this article (for more details and technical analysis, see the main Transport Watch website), the evidence suggests this option would provide higher capacity at significantly lower cost than HS2 – which would translate into lower fares and eliminate the need for operating subsidies. In addition, there would be major benefits from the greater flexibility to adapt to changing market conditions and new technologies. Finally, there could be significant environmental benefits, with lower top speeds translating into less noise and reduced energy consumption compared with HS2. (Given current policies, it is assumed that the road vehicles using the route would be electric by the mid-2030s).   

Going back to the situation in 2022, the best option remains cancellation of the entire High Speed 2 project. Even though billions have already been spent, the remaining budget would still deliver much higher returns if redeployed elsewhere (see the sunk-cost fallacy). Nevertheless, at some stage over the next few years Phase 1 of HS2 will hit the point of no return – not least due to the political embarrassment from abandoning it as it nears completion.    

When this happens, wouldn’t it make sense for ministers to reconsider the final trajectory of the scheme? Clearly it would be less costly to decide on the road option at a relatively early stage rather than installing a railway, and all its paraphernalia, only to rip it out a few years later.

Richard Wellings

Image: gov.uk

Wasting tens of billions on uneconomic rail schemes won’t level up the North

Posted on by
1

The North of England’s economic problems are undeniable. There is relatively little wealth creation in its once-great cities. The entrepreneurial dynamos of the industrial revolution are now heavily dependent on government handouts, with public spending typically making up half or more of their ‘GDP’.

Even the bright spots of the northern economy are creatures of the state. The universities rely in large part on government-guaranteed loans and research grants. And the professional services sector concentrated in Leeds and Manchester is parasitic on costly regulations imposed on individuals and businesses. In reality it represents the destruction of wealth.

Unfortunately it’s difficult to be optimistic about the northern economy in the long term. High costs combined with room-for-improvement in human capital (skills etc.) mean that the region will continue to struggle.

A programme of radical spending cuts and deregulation could of course reduce the costs of doing business in the North – but the short-term effect on public services and local economies is unlikely to be politically palatable. The scale of deregulation required to make a significant impact is probably impossible while the UK remains signed up to red tape imposed by the EU and various other supranational bodies.

At the same time, long-term demographic trends are likely to exacerbate the region’s human capital problem, with increasing numbers of elderly and incapacitated, as well as young people typically ill-equipped to undertake high-skilled jobs. Those who think improved training and education can resolve the latter issue are surely deluded.

The tides of economic geography are also working against the North. The region finds itself on the periphery of a Western Europe sinking rapidly into stagnation and irrelevance as the global core shifts to the East. Indeed, even the region’s handouts may be at risk as the vast UK revenues based on Western geopolitical power and associated market-rigging eventually unravel.

In this context there is a ‘fiddling while Rome burns’ quality to the government’s levelling-up agenda, which in part reheats George Osborne’s plan to create a ‘Northern Powerhouse’ by speeding up rail journeys between the region’s major centres. This is not, however, to deny that transport investment has the potential to deliver significant economic benefits.

Reductions in transport costs lower the cost of exchange, which in turn boosts trade and brings higher productivity through specialisation, economies of scale and so on. They also enable the development of agglomerations, clusters of activity that may further increase productivity and output. For example, thicker labour markets may lead to the better matching of workers to jobs and increased firm density may lead to greater knowledge sharing and to increased specialisation in supply chains.

Thus, in theory, better transport links could improve the economic performance of the North by enabling its businesses to make better use of its human capital. There could also be significant benefits from creating a larger hub in say Manchester. Improving the connectivity of the airport, for example, could increase the number of flight destinations that are economically viable, raising the attractiveness of the city as a business location.

Improved transport infrastructure in the North won’t be enough to overcome the region’s long-term structural problems, and it can’t reverse the impact of global economic trends, but it does have the potential to improve economic performance and perhaps slow down the rate of relative decline. This conclusion, however, depends on the assumption that such infrastructure would deliver a substantial reduction in transport costs in the North, which is where proposals to ‘invest’ billions in rail improvements fall short.

Indeed, the plans are likely to be useless for the vast majority of transport users in the region, and worse still will impose large tax costs and deadweight losses on the wider economy.

Consider plans for an enhanced rail link between Manchester and Leeds city centres – whether branded as part of HS3 or Northern Powerhouse Rail or a less ambitious improvement to the existing line. Imagine that journey times are cut from around 50 minutes to about half an hour.

Such an outcome is, however, unlikely to deliver significant results in terms of the thicker labour markets and other ‘agglomeration economies’ that are essential element to the aim of having these cities work as a single economic unit.

The main problem is the geography of northern conurbations. They are ‘multinucleated settlements’ comprising numerous smaller centres such as Stockport, Oldham, Salford, Rochdale etc. In addition, the region exhibits a high degree of suburbanisation and has experienced significant counterurbanisation.

Despite the huge government subsidies poured into inner-city regeneration programmes over the last thirty years, the vast majority of high-skilled workers reside in the outer suburbs or semi-rural villages. The gentrified inner-city districts so characteristic of London are largely absent.

The urban geography of the north suggests that a 30-minute city centre to city centre journey time would not deliver the single labour market so vital to the vision of the ‘Northern Powerhouse’. Typical door-to-door journeys would still be too time consuming and expensive for practical daily commuting. Indeed the seemingly quite large percentage reduction in travel times promised by rail improvements becomes relatively small when examined in these terms.

To give a practical example, take someone who lives in the wealthy suburbs of north Leeds and works in Manchester. The bus trip to Leeds station takes say 35 minutes in the morning peak, but in practice the commuter has to allow 50 minutes to give some leeway for transfers and the walking involved. The 30-minute ‘high-speed’ trip to Manchester takes the total up to 80 minutes, and then the worker faces say a 10-minute walk to his office – making a total of 90 minutes or a 3-hour round trip, about three times the average.

The situation is of course similar or worse for residents of many of the various ‘satellite’ towns and villages in the region. It should also be noted that employment hubs, such as the universities, main hospitals and Salford Quays are often a considerable distance from the city centre stations, increasing travel times further.

Such long journeys would be unacceptable and/or impractical for the vast majority of potential commuters, effectively adding 40 per cent or more to the length of the working week. Moreover, the cost – about £4,000 a year based on current fares and possibly much more if a ‘high speed’ premium were charged – makes this option prohibitive for many workers.

Urban planners might attempt to address at least the travel-time problem by encouraging more high-paid workers to live in city centres through adopting policies of restricting suburban development and driving it instead into high-density tower blocks close to rail hubs. At the same time, businesses could be forced or nudged to locate near the stations. This could perhaps get door-to-door round trips to just under 2 hours.

But even if Kowloon densities were achieved, say of 100,000 residents in the square mile around the main hub stations, this would still represent a tiny fraction of the total population of Yorkshire and Lancashire – and in reality not all of the residents would be trans-Pennine commuters. This hardly suggests a transformative effect on the regional economy. Such high-density environments also create numerous costs and problems, such as anti-social behaviour and congestion, the so-called diseconomies of agglomeration. Moreover, it’s difficult to see how they would appeal beyond quite limited niche groups.

It therefore seems likely that rail improvements will prove a costly failure in terms of uniting the labour markets of Leeds, Manchester and Sheffield. Worse still, the North will have to contribute a significant share of the tax bill and suffer a proportion of the resulting wider economic losses. Even if London and the South-East pay much of the cost, this will still have a negative knock-on effect on northern economies.

Rail schemes will also be largely useless in terms of freight transport in the north, further diminishing its potential to deliver many of the vaunted competition and specialisation benefits. This also applies to many businesses that rely on cars and vans to carry their equipment, such as construction firms. Faster rail links are only likely to benefit a small number of sectors, particularly professional services, which as mentioned earlier is typically parasitic on other businesses and typically contributes little to wealth creation.

Indeed the relatively short distances between the major northern cities and their dispersed, multi-nucleated nature makes rail freight impractical and uneconomic apart from a handful of niche markets. It’s far cheaper to load cargo on to lorries for fast, door-to-door convenience. Unsurprisingly, given this fundamental obstacle, there has recently been very little rail freight traffic on the trans-Pennine routes between Leeds, Manchester and Sheffield – with the exception of bulk limestone from the Peak District quarries.

Accordingly, if reducing freight costs were a major component of the government’s strategy, resources would be allocated to the road network rather than rail. While some vague plans have been mooted and incremental improvements announced, it’s clear that faster rail links are the main priority.

Such modal bias is particularly misguided because it would be possible to fund trans-Pennine road improvements – such as a fast Sheffield-Manchester link – with private investment at no cost to the taxpayer, with construction costs covered by future toll revenues. Yet our politicians seem to prefer uneconomic rail projects. Indeed they often go out of their way to obstruct non-state initiatives to improve infrastructure, by imposing strict planning restrictions, for example.

Something is clearly very rotten in the state of British transport policy. Time and time again, politicians are wasting taxpayers’ money on ill-conceived projects that fail to deliver their objectives. Transport investment should be about maximising economic returns by allocating scarce resources in the most cost-effective way, but instead it has become a PR-driven process of grabbing headlines, ‘buying’ votes and paying-off special interests.

Richard Wellings

An earlier version of this article was published on Richard Wellings’ blog.

Image: Wikimedia Commons

HS2 is not a cost-effective way of increasing rail capacity

Posted on by
3

The government’s policies to increase rail capacity are looking increasingly foolish when Covid-19 is already leading to long-term changes in travel habits.

Office workers may choose to waste less time commuting and work a day or two each week from home. Business people will increasingly use video conferencing software rather than wasting the whole day travelling down to London for a routine meeting.

At the same time, the government’s finances are likely to be strained over the next few years. Rather than wasting roughly £100 billion on High Speed 2, policymakers should consider more cost effective ways of addressing rail capacity issues. This would be a far less reckless approach to spending taxpayers’ money than a horrendously risky megaproject that is already massively overbudget.

Here is a list of alternative measures. A big advantage is that unlike HS2, they can be implemented incrementally, specific to locations where they are practical and cost-effective, offering far more flexibility in the context of huge uncertainty over future passenger numbers.    

  • Introduce more flexible pricing to flatten the peak. Passengers would have greater financial incentives to travel during the “shoulders” of the peak, or indeed off-peak, thereby making more efficient use of existing infrastructure and rolling stock.
  • Phase out government subsidies and price controls so that fare levels better reflect industry costs.
  • Convert first class carriages into standard class carriages to accommodate more passengers.
  • Introduce high-capacity “economy class” coaches with more standing room instead of seating, offering lower fare options. (This is only likely to be a practical option post-Covid).
  • Lengthen trains by adding more carriages and extending platforms. Double-length trains could even be used on busier sections and then split part-way through the journey.
  • Deploy improved signalling technology to reduce the necessary gap between trains.
  • Consider using double-decker trains where the engineering costs would not be prohibitive.
  • Address bottlenecks by re-engineering junctions: relatively expensive but still much cheaper than building brand-new infrastructure.
  • Divert freight onto quieter routes, enhancing loading gauges where necessary. For example, intermodal traffic from Felixstowe to the Midlands and North can be sent via the Ipswich-Nuneaton route rather than the southern West Coast Main Line.
  • Allow full vertical integration to end the artificial separation between track and train, and between different franchisees and open-access operators. This should improve the financial incentives to make more efficient use of spare capacity.
  • Finally, in some locations there may be a strong economic case for lifting the railway tracks and converting the route into a busway or road, the former typically providing higher capacity at much lower cost than rail transport.

Richard Wellings

Image: Shutterstock

HS2 and the “Great Reset”

Posted on by
1

High Speed 2 never made any economic sense. In commercial terms it was always going to make heavy losses. Ballooning budgets mean the costs are now likely to outweigh the benefits. And it’s crystal clear that alternative transport investments would deliver far higher returns.

So, why on earth is the project still going ahead?

One theory is that transport policy was captured by powerful special interests. Construction firms, train manufacturers and an army of consultants stand to cash-in from the scheme. They certainly haven’t been shy about lobbying MPs and ministers over the last few years.

Councils in the North and Midlands will use HS2 to grab yet more taxpayers’ cash to fund their pet “regeneration” projects around the new stations. No wonder they’re backing the line so strongly.

Then there are the senior bureaucrats. HS2 provides them with some of the best-paid jobs in government.

But there are compelling arguments against the special interests hypothesis. This is not to deny their influence on policy, but to question whether it is strong enough to be decisive.

Looking at political incentives, HS2 has been unpopular with the public, those against typically far outnumbering those in favour. The scheme has also been an endless source of embarrassment and bad publicity for successive governments, with numerous negative media stories on cost overruns, deception, incompetence, protests and the ill treatment of businesses and residents along the route.   

Having said this, the current government’s levelling-up agenda undoubtedly plays into the hands of the HS2 lobby. They could now argue that ministers were abandoning their pledges to boost the North should the line be cancelled or scaled back.

But earlier on, it would surely have made political sense to scrap HS2 and instead lavish the money on regeneration schemes in individual towns and cities across the region, including local transport upgrades. This would have been a quicker, more effective and less risky way of “buying” votes.

So, neither special interests nor political incentives seem to fully explain why HS2 is going ahead – which brings us to another possibility.

During the pandemic, awareness has grown about the so-called Great Reset agenda, often marketed by politicians as “Build Back Better”. This set of policies, promoted by transnational “elite” institutions such as the World Economic Forum and the European Commission, is being imposed across the Western bloc and its satellites.

At the heart of this shift is radical environmentalism – at least when taken at face value. In transport policy it translates into a ruthless war on drivers. This assault was ramped up in 2020 with the government paying councils to close large numbers of roads to through traffic and narrow main roads to install (often empty) cycle lanes.

Ministers also announced a ban on the sale of new petrol and diesel cars from 2030. The cost of electrification is likely to run into the high hundreds of billions, with motorists picking up much of the bill. The government is also considering introducing a national road pricing scheme, ostensibly to replace the vast revenues currently stolen from motorists via fuel duty.

It isn’t difficult to discern the direction of travel. Ordinary motorists will gradually be forced off the roads by a combination of regulation, tolls, taxes and closures. Driving (and also flying) will increasingly be the preserve of the rich.

So, how does this agenda relate to HS2?

At the moment a significant proportion of people travelling from the South East to the North or Midlands, or vice versa, choose to drive. Rail makes most sense for city centre to city centre journeys, particularly trips involving central London, which is car unfriendly to say the least. But if the journey starts and finishes in the suburbs, if other stops are planned en route, or if heavy luggage is carried, the car is often quicker and more convenient than the train.

However, if the Great Reset agenda is enforced, most people won’t have this choice in fifteen or twenty years’ time.

Imagine someone driving from Yorkshire to London in the not-so-distant future. He struggled to afford an expensive electric car and rapid charging socket, and is saving up for the eventual battery replacement.

He incurs heavy tolls as the government tracks his drive south. On entering London, the surveillance system levies an additional hefty “congestion charge” tax. He’s then delayed by 20 mph speed limits, cycle lanes, road humps and chicanes. The route he used to take is no longer possible due to road closures and he has to make a long detour.

On arriving at his destination he struggles to find a parking space. One side of the road has been turned into a cycle lane and the other is permits only. When he finally finds one, the charge is prohibitive. He decides that he won’t bother driving next time. He will use video conferencing or if absolutely necessary take the train.

So, the transport market is going to be so heavily rigged that most people will have little choice but to travel by rail if they make these kind of journeys – assuming they can afford it (these policies are likely to bring a major reduction in overall personal mobility, with negative knock-on effects on job opportunities, business costs, productivity and wages).

This authoritarian agenda may explain politicians’ attachment to HS2. Senior officials and ministers have been aware of and signed up to Great Reset-type policies for years. They knew a big crackdown on private motoring was coming and were just waiting for a pretext to impose it. In the meantime, the true scale of the shift and its implications would deliberately be hidden from the public.

HS2 will prove very useful to government ministers during the coming assault on private transport and mobility. They will deploy it to deceive the public that they are speeding up journeys and improving connectivity when for the vast majority of travellers the exact opposite is true.

It is no coincidence that the EU, together with the UK and US governments, are all now promoting uneconomic high-speed rail and very similar transport policies more generally. This is a top-down agenda, ordered by an unaccountable transnational “elite” and imposed by its lackeys in national governments. Both liberty and democracy are being crushed in the process.

Opposing this railway is therefore about far more than saving taxpayers’ money, protecting private property and halting environmental destruction. If HS2 is stopped, or even scaled back, our leaders will find it harder to undermine people’s freedom to travel.

Richard Wellings

HS2 – summary case against

Posted on by
2

This piece summarises the main arguments against HS2.

  1. The cost, including the trains and the often omitted links to the new stations, will be at least £80 billion. That is equivalent to nearly £3,000 for every household in the land.  Meanwhile, 45% of us use a train less than once a year and 99% of us will seldom, if ever, use a high speed one.
  2. The financial loss faced by those living in 2036, assuming the fares out to the remote year of 2096 actually arise, will be £74 billion at 2011 prices – equivalent to pouring the wages of 74,000 working men’s lives down the drain, or perhaps 100,000 if the forecast fares do not materialise. Not quite WW1 levels but trying hard.
  3. Transformational? The trips generated by the network will add a trivial 1.5% to rail journeys and an even more trivial 0.05% to all passenger-journeys. It is only those which can be transformational since the rest obviously pre-exist.  With numbers as small as that it is impossible to sustain this “transformational” story line whilst maintaining a straight face.
  4. Regeneration: The network is said to generate 100,000 jobs although many, if not most, may be relocations. If the project proceeds each of these supposedly new jobs will have cost the taxpayer £800,000. How many will that destroy in that part of the economy which makes a profit? Again the official story line (economic regeneration etc) is destroyed.
  5. Wider Economic Benefits, the WEBs: The KPMG report claims that the proposal will generate WEBs worth £15 billion per year. Those can only arise because of new or generated business and commuter trips (the supply side). They number circa 7.8 million per year. Dividing the £15 billion by the 7.8 million trips provides £1,930 or nearly £4,000 per return trip, 14 times the average value for the nation as a whole!!
  6. Existing Trips must have higher WEBs than those generated merely because a journey time has been reduced somewhat. The usual theory suggests double. Hence if KPMG’s £15bn is to be believed, existing trips on the West Coast Main Line generate WEBs with an average value of circa 30 times the average for the nation as a whole……… The charitable conclusion is that KPMG did not carry out this reality check. If it had, surely it would not have been so stupid as to publish the £15bn.
  7. The passenger forecasts: The original forecasts made for HS1 were three times as high as the numbers which materialised. Those for HS2 require eighteen 1,100-seat trains per hour, an extraordinary thing not yet achieved on any high speed network in the world. No risk is assigned to that, indicting a flamboyant disregard.
  8. A key driver for the forecasts is the growth in Gross Domestic Product. However, between 1955 and 1995 GDP grew by 150% but rail use did not change. In contrast, since 1995 GDP grew by 40% but rail use has increased by a whopping 70%. The comparison suggests GDP has little to do with it. Instead the recent growth will be due to the razzamatazz of privatisation
  9. Capacity: Virgin’s trains carry an average of 160 passengers whilst offering over 500 seats. In the peak three hours half the seats are said to be empty. That alone places a question mark over the claims that, without HS2, capacity will be inadequate. In any event, substantial increases in capacity could be achieved at relatively low cost by lengthening the train and some platforms etc. More importantly, the sensible approach when demand exceeds supply, particularly if a product makes a loss in the billions of pounds, is to balance supply and demand by raising the price. Against that background I dare say a straight face would have difficulty maintaining the notion that the West Coast Main Line lacks capacity without breaking in half.
  10. Ludicrously the CPRE and DfT claim that HS2 will have the same capacity as a 12-lane motorway. Well, the supposed eighteen 1,100-seat trains per hour will offer a paltry 19,800 seats. That is nearly four times less than the 75,000 available from one lane of a motor road carrying one thousand 75-seat coaches per hour at 100 kph. At that speed the head-ways would average 100 metres.
  11. The quaintly called “Willingness to pay calculus”, upon which the economic analysis depends, allows fares to be subtracted from costs and the difference, the net cost to the government, to be compared with the supposed social benefits. However, the theory reduces to the absurd when it is realised that changing the economic boundary of the scheme or changing the tax regime, changes the net costs. It persists because, without it, no railway scheme would ever pass the cost benefit test – suggesting dishonesty at the highest level.
  12. The North-South divide is hardly likely to be reduced by the proposal; quite the reverse. For example, Phase 1 was said to generate 40,000 jobs with 9,000 in construction and 1,500 attributed to operating the line. Of the remainder, 70% would be in London.
  13. International comparisons confirm that such schemes benefit capital cities rather then the regions and that the financial losses are vast. For example the debt due to the much lauded Japanese system is $280 billion.

This project is not, as claimed by Graham Nalty, in Local Transport Today of 4th April, a great idea being led by the wrong kind of people. Instead it is an entirely stupid idea sold to the gullible by conmen – men who, in the words of Stewart Joy, Chief Economist to British Railways, in his book, The Train that Ran Away, are “prepared cynically to accept the rewards of high office in the railways in return for the unpalatable task of tricking the Government on a mammoth scale”. Such men, Joy wrote, are “either fools or knaves”.

At what point is irrational enthusiasm mis-selling and at what point is mis-selling plainly fraud?

Notes and calculations

(1)   Cost – £43bn for construction plus £7bn for the trains plus £30bn for connections, ref IEA estimate, providing a total of £80bn.  The UK population is circa 60m.  Family size set to 2.2.  Hence the cost per household is £2,933.  That ignores tax at 20.9%, included in the economic assessment.  Perhaps that should be added.  After all, every project or enterprise must make its contribution to the nation.

(2)   Financial Loss.  Table 15 of the October 2013 Economic analysis shows a financial loss at the 2011 price and discount base of £31.5bn for the “standard case”.  Rolling that up at the Treasury Discount rate to the presumed opening year of 2036 provides £74bn.  That represents the actuarial loss, at 2011 prices, faced by those then living – supposing the very high passenger forecasts, and the corresponding fares, out to the remote year of 2096, actually arise.

(3)   Transformational? HS2 Ltd say that the project will generate 76,000 new passengers-journeys per day, (FoI request 13-873).  The 76,000 corresponds to roughly 22.8 million per year.  It is only those new trips which can be “transformational” since all the rest (obviously) pre-exist.   There are currently 1.5 billion passenger-journeys per year by surface rail, and 43.5 billion passenger-journeys by all modes (walk and cycle excluded).  Hence generated, or new, passenger-journeys may account for a trivial 1.5% of all surface-rail journeys and for an even more trivial 0.05%, or one in 2,000, of all passenger-journeys.  Clearly that cannot be transformational.

(4)   Regeneration – cost per job.  If the scheme cost or the long term financial loss are both circa £80bn, see above, and if the supposed £100,000 jobs generated actually arise and are indeed new, and not relocated jobs, then the cost per job is, by division, £800,000.

(5)   Wider Economic benefits. KMPG’s report claims £15bn per year.  These can only arise from generated or new business and commuter trips, the supply side, since all the rest obviously pre-exist.  HS2 Ltd refuse to say how many of the 76,000 generated trips are for business and commuting purposes.  However, paragraph 5.2.13 of the April 2012 Demand and Appraisal report says one third of the HS2 trips are for business purposes.  Increasing that by 25% to allow for commuting provides 41%.  Here we will use 40%, which appears very high indeed compared with the 20% which applies to the nation as a whole. There are 255 effective days per year for such tips.  Hence the new business plus commuter trips may number 76,000 x 255 x 0.4 = 7.75 million per year.  Dividing the £15bn by that number provides £1,930 or close to £4,000 for a round trip.  Nationally Travel Survey Table 0409 provides 177 commuter plus business trips per year per head per year.  The GDP is about £1,500bn. Dividing that by the population, 60mn, and by the number of trips per head, the 177, provides £141, which is 13.7 times less that the £1,930.

Item (9), Capacity – the 160 average train occupancy is from the Office of the Rail Regulator’s data.  It is calculated by dividing Virgin’s passenger-km by its train-km.

The rest is either well known or nearly so to those who care to look.

Paul Withrington

HS2 – fraud in high places?

Posted on by
Reply

We pride ourselves that there are few instances of corruption in the UK. At any rate, “brown envelopes” are rare. However, we have a deeper and more pernicious malaise, namely vast salaries and careers built and dependent upon giving advice which panders to a pre-existing policy or belief or supports some power group, regardless of how wrong that advice may be. A reverse proof of that is the dire consequence which “whistle blowers” suffer. HS2 represents the top end of that pernicious and damaging state of affairs. Here are some examples.

HS2 lobbyists claim that the project will be transformational and lead to economic growth, a project which the nation simply cannot do without.

However, the effect will be to increase passenger-journeys by rail by a trivial 1.5% and passenger journeys by all modes by an even more trivial 0.05%, or one in 2,000. “Transformational”, Ha, Ha.

The Y-network is supposed to create 100,000 jobs although many, if not most, may be no more than relocations. The cost, including the trains and the (otherwise omitted) links to the new stations, will be £80 billion, equivalent to £800,000 per job. How many will that destroy in that part of the economy which makes a profit?

Job creation? You must be joking. Jobs for the boys more like it. Applying these HS2 principles to the nation as a whole would bankrupt us all in no time.

The KPMG report of September 2013 claims that this scheme will generate £15bn per year in Wider Economic Benefits (WEBS).

However, these WEBS can only be generated by the new or generated business and commuter trips (the supply side), since all the rest pre-exist. Dividing the £15bn by those new trips, yields a value which is between 14 times that of the average for the nation as a whole – a result which illustrates how ludicrous the £15bn is.

Presumably those highly paid KPMG employees did not carry out a reality check. Had they done so they could not have published the £15bn, or at least not with straight faces.

Stewart Joy, Chief Economist to British Railways in the late 1960’s wrote in his book ‘The train that ran away’, that  “ …there were those who were cynically prepared to accept the rewards of high office in the British Transport Commission and the Railways in return for the unpalatable task of tricking the Government on a mammoth scale. Those men”, Joy wrote, “were either fools or knaves”. There were no libel actions, but Joy had been forced out, too honest to work with railway men. We comment, now as then.

Our view is that HS2 Ltd’s executives and associated lobbyists should be indicted for mis-selling on a gigantic scale – shamelessly promoting a project which, together with the trains and the links to the stations, may cost £80bn and generate a financial loss, after accruing fares out to the remote year of 2096, of the same amount, equivalent to wasting the lives of 80 thousand working men.

For detail see our previous blog or click here to open Item 9 of Topic 17 on the Transport-Watch web site.

Paul Withrington

HS2 “transformational” and other jokes

Posted on by
Reply

1.   Transformational?

HS2 Ltd claims that the proposal will be “transformational”.

HS2 Ltd also say that the project will generate 76,000 new passengers-journeys per day, (FoI request 13-873). The 76,000 corresponds to roughly 22.8 million per year. It is only those new trips which can be “transformational” since all the rest (obviously) pre-exist.

There are currently 1.5 billion passenger-journeys per year by surface rail, and 43.5 billion passenger-journeys by all modes (walk and cycle excluded). Hence generated, or new, passenger-journeys may account for a trivial 1.5% of all surface-rail journeys and for an even more trivial 0.05%, or one in 2,000, of all passenger-journeys.

Transformational?  Ha, Ha.

2.   Job creation

Supporters of HS2 claim it is essential to the nation etc. HS2 Ltd also say that the Y-network will create 100,000 jobs whilst admitting that many, if not most, of those may be no more than relocations.

The initial cost of HS2, including the trains and links to the stations, may be £80 billion. The financial or actuarial loss (costs minus income out to the remote year of 2096) faced by those standing in the opening year of 2036 will be close above £74bn (1), supposing the ludicrous passenger forecasts arise. Hence the cost per job will may amount to at circa £800,000. How much employment will that destroy in that part of the economy which makes a profit?

Job creation? You must be joking. Jobs for the boys more like it. Applying these HS2 principles to the nation as a whole would bankrupt us all in no time.

3.   The North-South Divide

Claims by supports that HS2 or the Y network will reduce the North-South divide or regenerate the North are not substantiated. Any such effect will, at best, be trivial, reference Professor Geddes evidence to the Transport Committee’s inquiry into High Speed Rail (2010-2012).

4.   The Passenger Forecasts – no risk factor

The original passenger forecasts for HS1 were too high by a factor of three. The forecast for HS2 require up to 18 1000-seat trains per hour, or one train every 3 minutes 20 seconds, at peak times, which seems quite extraordinary.

An honest analysis would acknowledge that there is a considerable risk that the forecast may be too high, perhaps by a factor of two. If so the economic case would collapse.

Instead there is a pretence – Figure 1 of the October economic analysis – that there is a 75% probability that the scheme will have a benefit-to-cost ratio categorised as high, i.e. above two.

In the real world such a presentation would lead to a miss-selling action should the project fail, as it probably will.

5.   The “Willingness to Pay calculus”

The quaintly named “Willingness to Pay calculus” underpins the economic analysis. That theory enables the net cost to government to be compared with social benefits, such as the cash values of time savings etc.

The net cost is the full cost minus the “incremental” fares. The latter are the fares from HS2 minus those which the proposal would extract from the rest of the railway. However, the theory leads to the absurd. For example:

  • If the rest of the rest of the railway were privatised and free of subsidy then the incremental fares would rise to the full fares taken by HS2. That would greatly reduce net costs to government and increase the benefit to cost ratio no end.
  • If, at the stroke of a pen, domestic air transport were nationalised, along with the filling stations on the strategic road network, then the incremental fares from HS2 would be reduced by a amount equal to the loss of income from the air industry and filling stations caused by HS2. That would increase the cost to government, and hence reduce the benefit to cost ratio.
  • Private sector projects cost the government nothing. Hence the theory leads to the absurd conclusion that such projects, even if making losses in the tens of billions of pounds, have an infinite benefit-to-cost ratio – cost to government, zero, benefits to customers presumed above zero; hence benefit-to-cost ratio is, oh golly, infinity.
  • Merely changing the tax regime, a purely paper exercise, would alter the costs to government and hence the all important benefit to cost ratio.

A theory which produces such capricious result has to be rejected. Without it no railway project would ever pass scrutiny. Probably that is why this intrinsically dishonest “calculus” endures.

Instead decisions concerning projects where there are paying customers should be made on the basis that, if the proposal makes a loss, particularly if the loss is in the tens of billions of pounds, then for heaven’s sake DO NOT BUILD IT.

6.   KPMG’s £15 billion per year Wider Economic Benefits

KPMG’s report of September 2013 claims HS2 and the Y-network will generate an extraordinary £15 billion per year in Wider Economic Benefits (WEBs). These benefits can only arise from generated, or new, business and commuter trips – the supply side.

As at (1) above, generated, or new, trips total 76,000 per day. If 40% are for business or commuting they will number 30,400 per day. For such trips there are an effective 255 days per year. Hence the annual new business plus commuter trips will be circa 7.75 million.

Dividing KPMG’s £15bn by the 7.75 million provides an average value for these new business or commuter trips of circa £1,930, or nearly £4,000 per round trip. That value is 14 times the average for the nation as a whole (2), illustrating how unbelievable the £15bn is.

After all:

  • The £4,000 per round trip is in excess of what would have been achieved had the individuals stayed in their offices.
  • These new trips arise only because journey times will have been reduced somewhat.
  • Pre-existing trips did not need such an encouragement.  Hence they will have higher WEBs, possibly double the average for the new trips, implying an average value attributable to a pre-existing business or commuter trips on the West Coast Main Line of nearly 30 times that for the nation as a whole.

Charitably KPMG did not carry out such a reality test. Had it done so it would never published the £15bn, or at least not with a straight face.

7.   Information denied

In October 2013 we asked HS2 Ltd, under freedom of information legislation, to provide the proportions of trips which were for business, commuting and leisure. That data must be available since, without it, the economic analysis could not be carried out.

HS2 Ltd claimed it does not hold the information. We have continued to press for the data but without success. The date is now 8th March 2014. We regard this failure on behalf of HS2 Ltd as symptomatic of an organisation which will do all it can to prevent key data from reaching the public thereby suggesting corruption at the heart of the organisation.

(The 40% we have used under the previous heading is consistent with old reports)

8.   The October 2013 economic analysis

This analysis uses a lower value of time for the crucial business trips and a lower number of trips assigned to the scheme. On the face of it those reductions should reduce the computed benefits by 35%. Instead the new study pretends to an increase of 24%, which is astonishing, if not entirely unbelievable.

9.   A 12-lane motorway

The CPRE, and now the DfT, have put it about that HS2 will have the same capacity as a 12-lane motorway. That depends deceptively comparing trains with every seat taken with a motorway occupied by cars containing the national average of 1.5 people.

Instead, the correct comparison is the between the seats per hour offered by the trains and the seats per hour that would be offered by express coaches operating on a motor road.

HS2 pretends to 18 1,000-seat trains in one direction and on one track in the peak hour providing 18,000 seats. 1,000 express coaches travelling at 110 kilometers per hour on one lane of a motor road would have comfortable headways averaging 110 metres. Those coaches may very well have 75 seats each so providing 75,000 seats in the hour.

Hence, rather than  HS2 providing the same capacity as a 12-lane motorway, two motorway lanes, one in each direction, dedicated to express coaches would provide the same capacity as eight high speed rail tracks.

10. The HS2 letter head

HS2 Ltd has, as its letter head, “HS2 engine for growth”. We comment, there is no evidence that this scheme will bring any growth at all. Instead it will waste tens of billion of pounds, thereby stunting growth. Hence from the very first there is misrepresentation.

11. Fraud

Is there any prospect of prosecuting officials at HS2 Ltd and in the DfT for fraud on the basis that the information they produce misleads both politicians and the nation on a mammoth scale, tempting the government to pour £80 billion down the drain – miss-selling on a gigantic scale?

Paul Withrington

……………………….

Footnotes

(1)   Table 15 of the October economic analysis provides a loss to the Government of £31.5 billion.at the 2011 price and discount base.  Rolling that up at the Treasury Discount rate of 3.5% to 2036 provides £74.5 billion, representing the actuarial loss at 2011 prices faced by those standing in 2036, supposing the forecast fares and the ludicrous passenger forecasts actually arise

(2)   The nation’s GDP is circa £1,500 billion. National Travel Survey data provides 177 commuter plus business trips per head by all modes in 2012.  The population is 60 million.  Hence the value per trip is £1,500 billion divided by 60 million and by 177, providing £140 per trip, or £280 per round trip. The £280 is 18 times less than the supposed £5,200 average for the trips generated by HS2.