HS2 funding would not be diverted into other projects if line is abandoned, UK rail industry experts claim

Out-Law News | 06 Mar 2014 | 10:35 am | 2 min. read

Only a small fraction of the £42 billion allocated to the UK's planned new high speed rail network would be diverted to other transport and infrastructure projects if the scheme was to be abandoned, a group of rail industry experts has claimed.

In a new report (13-page / 3.5MB PDF), the High Speed Rail Industry Leaders Group (HSRILG) said that much of the money would be likely to be used to write down government debt rather than invest in alternative capital projects that lack the "scale and distribution of benefits" that the new line was forecast to provide. Based on a 75:25 split and current departmental funding allocations, the Department for Transport (DfT) could receive as little as £2bn of that money, of which £670 million would be allocated to new rail projects, they said.

According to HSRILG, abandoning the project would also deprive large areas of the country of regeneration opportunities and be detrimental to business growth. It would also not be possible to accommodate any more freight traffic on the rail network without the new line, the group said. Critics of High Speed 2 (HS2), the proposed new rail link connecting London with Birmingham and the north of England, have said that the money would be better reallocated to alternative projects.

"HS2 is about so much more than reducing journey times between London and Birmingham," said Steve Scrimshaw, a member of the group and managing director of Siemens' Rail Systems UK unit. "It is about a once in a generation, transformational opportunity to reconnect Britain and revitalise our busy rail network."

"The advantages of this cannot be overstated and this report points to some of those. That's why we, along with other business leaders and major employers, fully support HS2 and call on Britain to push forward in developing a world-class high-speed network and take advantage of the benefits it will bring to our nation," he said.

The initial London to Birmingham section of HS2 is scheduled to be completed in 2026, and will cut journey times between the two cities to 45 minutes, according to the DfT. A proposed second phase of the project envisages the construction of an onward 'y network' connecting the line to Manchester and Leeds, as well as to Heathrow Airport, by 2033.

Although the project has the backing of all three of England's main political parties, the Labour Party has threatened to withdraw its support if costs continue to rise. According to the latest estimates, HS2 is expected to cost £42.6bn with an additional £7.5bn for rolling stock. However, this figure includes a £14.56bn contingency. Sir David Higgins, the new head of the project, is expected to report on how the project could be delivered earlier and for a lower cost later this month, before the second reading of the Hybrid Bill in the House of Commons.

The HSRILG based its report on the "purely hypothetical" scenario of HS2 being abandoned "in 2014 or 2015 or soon thereafter". It said that although there were precedents for "loss of nerve, or a change in view on policy priorities"; in most cases the problem that the project was designed to solve "returns for a more confident generation to tackle". It cited the Crossrail route across London, which is due to open in 2019 after being rejected in 1994, and the ongoing debate on the need for a third London airport as examples of this.

More immediately, the report concluded that abandoning the project would result in "slower and less reliable rail services, and more congested roads", which would turn the UK into "an inefficient and increasingly unpopular country in which to do business". There would be a loss of regeneration opportunities and potential jobs, which could result in "brain drain" of highly skilled engineers leaving the UK to pursue opportunities elsewhere, it said. Internationally, abandoning the project would "signal to potential investors Britain's unwillingness to invest in its creaking infrastructure", it said.