Out-Law News 2 min. read
16 Dec 2013, 10:31 am
The Transport Committee's new report on the project also called on the Government to "emphasise more clearly to the public that the estimated cost of HS2 is £28 billion", and not the £50bn figure, which includes rolling stock and contingency, that has been widely quoted in the press. The impact of cost increases, which the committee found were largely due to the costs of reducing the impact of the project on local residents, had been "exaggerated", the committee said.
Major projects expert Patrick Twist of Pinsent Masons, the law firm behind Out-Law.com, said that the committee's proposals "made a lot of sense", but would be difficult to implement.
"The northern cities would undoubtedly receive the economic regeneration benefits of the project earlier if construction started in the north, and Phase 2 was constructed first," he said. "At the southern end, capacity is the key driver and the need to free up train paths for commuter and freight traffic necessitates this work being started as soon as possible."
"Two factors mean that the Committee's suggestion that the two phases be built simultaneously would be difficult to implement: the first question is whether the construction industry actually has the capacity in terms of resources and manpower to undertake the whole project in one go. That could probably be sorted with careful planning, but the other constraint is financing: Phase 1 construction will start about the same time as Crossrail construction ends and the annual spend will not be materially larger. Phase 2 then kicks in as Phase 1 ends. The Treasury will not support any rescheduling which would result in the whole spend being concertinaed into a much shorter period," he said.
HS2 is planned to be built in two stages. The initial London to Birmingham section of the line is currently scheduled for completion 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.
According to the latest estimates, the project is expected to cost £46.2bn with an additional £7.5bn for rolling stock. However, this figure includes a £14.56bn 'contingency'. The DfT has already commissioned Sir David Higgins, the incoming head of HS2 Ltd, to report on how the project could be delivered earlier and for a lower cost through better planning and early engagement with industry. He is due to present his findings to the Transport Secretary before the second reading of the Hybrid Bill in the House of Commons in March.
Committee chair Louise Ellman said that Higgins had assured them that he would "re-examine the case for building the line from north-to-south, as well as from London northwards" as part of his work.
"We support the strategic case for HS2 published recently by the Government," she said. "Having looked at this, and at new research by KPMG that examined the project's possible regional economic benefits, we remain confident that construction of a new high speed line is the only way to deliver the step change in capacity on the West Coast Main line needed to accommodate long-term demand for both passengers and rail freight."
However, she added that the committee's support for the project was "not unqualified".
"We would not accept a situation in which other vital transport projects were delayed because of HS2's funding requirements and we remain concerned about how refinements – for example, to incorporate a stop for Heathrow into the plans for Phase 1 – may have an impact on the budget," she said.