Out-Law News 3 min. read

Higgins Report: UK high speed rail line can be "catalyst for fundamental change", says expert

Starting work on the northern branch of the UK's new national high speed rail line earlier would reduce the final cost of the project, the new chair of the company set up to deliver the project has said.

Reporting on the project Sir David Higgins, chair of HS2 Ltd, said that this would allow regional cities to benefit from the economic advantages earlier. Higgins said he had "resisted the temptation" to reduce the £14 billion contingency included in the government's £50bn project budget due to "uncertainty over the legislative timetable plus the inherent risks associated with any project at this early stage". However, he said that he was satisfied that the project could be delivered on time and within budget.

"Sir David has been prudent in not seeking to reduce the contingency for HS2 at this stage, although this may disappoint some," said transport infrastructure expert Patrick Twist of Pinsent Masons, the law firm behind Out-Law.com. "His record of delivering the Olympics on time and to budget means his statement that Phase One can be delivered within the existing £21.4bn budget is entirely credible. He has rightly made clear that any material reduction in cost will be dependent on the length of time the parliamentary process takes."

"There are two strong messages coming out of the report. First that the overall costs of the project will be reduced by starting Phase Two earlier and bringing its benefits to the Northern cities three years early. Quite simply, the longer it takes the more it costs - it is a message well understood in the construction industry but to date the government has preferred to spread the cost over a longer period. The second is his call that more be done to integrate HS2 into the existing rail infrastructure so that it can be a catalyst for fundamental change," he said.

Higgins took over as chair of HS2 Ltd, the company set up to deliver High Speed 2 (HS2), in January and was commissioned by the prime minister to report on how the project could be delivered earlier and at a lower cost. Under current plans an initial London to Birmingham section of the line would be completed in 2026 with a proposed second phase connecting the line to Manchester, Leeds and Heathrow Airport following by 2033. The project is currently estimated to cost £42.6bn, of which £14.56bn is contingency, with an additional £7.5bn for rolling stock.

The report's central recommendation is to extend the line 43 miles further north than planned in Phase One to a new transport hub at Crewe, which Higgins said could be completed by 2027. Doing so would allow the second phase of the route to be completed by 2030, instead of 2033. Crewe's location would allow the station to act as an interchange between regional and long-distance rail services, as well as bringing together road and rail services for the region as a whole, according to the report.

Although the report does not set out specific cost savings, Higgins recommends that the government scrap a planned link between the new line and the existing HS1 line between London and the Channel Tunnel. This would save £700 million, according to the report. The report also recommends a "more ambitious" redevelopment of Euston station, the proposed London terminus for HS2, which would "transform and regenerate" the local area and could be delivered by the private sector.

Responding to the report, transport secretary Patrick McLoughlin said that the government would remove the link with HS1 from the HS2 Hybrid Bill and instead commission a study into alternative ways to improve connections between HS2 and Europe "once the initial stages of HS2 are complete". The government will also ask HS2 Ltd and Network Rail to develop more comprehensive proposals for the redevelopment of Euston, and to develop proposals for an integrated hub station at Crewe in time for them to be considered along with the responses to the public consultation on Phase Two.

Transport infrastructure expert Patrick Twist said that it would be important for the regional cities that a link to continental Europe be preserved.

"Few would argue that the currently proposed HS1-HS2 rail link is suboptimal, but businesses in Birmingham and the North will look for this link to be upgraded so that it can provide effective and efficient through services to the continent," he said. "Reconsideration will not be welcome if it simply means dropping the link for the present."

The HS2 Growth Task Force chaired by Lord Deighton, Commercial Secretary to the Treasury and head of the team behind the London Olympic Games, is due to publish its own report setting out how it will maximise the economic benefits of HS2 at the end of this week. "No doubt it will also stress the importance of improving connectivity and using HS2 as a catalyst for development," Twist said.

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