New rail investment plans further undermine the business case for HS2

16 July, 2012 – The Government’s announcement of £9bn rail investment (that includes £4bn on new schemes) in existing railways is sensible and welcomed.  But the Government must also know that announcing these plans further undermines their own business case for High Speed 2 (HS2), as such improvements have to be factored into their ‘base case’ calculations. Today’s announcement comes on top of another by Alstom that says massive improvements in journey times to Scotland can be made, and this is without HS2.

Hilary Wharf, Director High Speed 2 Action Alliance (HS2AA) says  “It is clearly a sensible approach to deliver incremental benefits to the existing network. We welcome it, albeit the pot is now smaller because of the huge £33bn cost of HS2.  Government’s plan for 2014-19 will bring early real benefits to far more people than a vanity project like HS2, that helps few people and not for 15 to 20 years”.

“But the sting in the tail is that some of these plans will also worsen the case for HS2. The current business case already has a wholly unrealistic comparison ‘base case’ (excluding projects like Evergreen 3), but these latest improvements such as the electrification of Midland Mainline (that reduces journey times to Sheffield) must now be factored into DfT’s ‘base case’. It simply worsens the economic case for Phase 2, as even the Chief Engineer of HS2 Ltd, Andrew McNaughton recognised it would, as long ago as 2009.”

“The Government are not the only people working out how to improve the existing network either.  Alstom say they can shave 50 minutes off getting to Edinburgh using Pendolinos and ERTMS on the East Coast Main Line – about the same as HS2 is forecast to achieve!.  So it’s another example of getting the same journey time benefits, but without spending £33bn on HS2.”

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Note for editors:

HS2 Action Alliance is a national organisation making the powerful case against HS2. It is a not for profit company working with over 70 local groups, who believe HS2 does not represent an effective answer to the UK’s transport, economic or environmental needs.  They have undertaken detailed evaluations of the HS2 business case. The latest analysis shows the case has sunk well below any threshold for proceeding.  A series of advertisements promote the ever diminishing business case, the alternatives, and reports being hidden by DfT and the Major Projects Authority.

The business case for HS2 has on DfT’s own numbers a Benefit to Cost Ratio (BCR) of 1.2 for Phase 1 and 1.3 to 1.5 for the Y (excluding Wider Economic Impacts). The BCR depends on comparing the benefits of HS2 with a ‘base case’ of proceeding with just the planned improvements (what is called the ‘do minimum’ case).  The electrification of Midland Mainline affects the HS2 ‘base case’, as it improves the line to Sheffield. This will deliver journey time and crowding benefits currently ascribed to HS2.  This ‘base case’ for HS2 will now have to be re-done.

An FOI request revealed an unguarded response from the Chief Engineer at HS2 Ltd about the MML electrification, where he noted in an email of 23 December 2009 to the South Yorkshire Passenger Transport Executive

‘…I think there has to be care not to undermine a very strong business case for a proper high speed line by proposing an investment in an intermediate solution which gives a proportion of the benefits and potentially allows government to say ‘they have got part of what they wanted so the priorities now move elsewhere.………..’

The ‘base case’ was always unrealistic.  It even excluded Evergreen 3 – the 100mph Chilterns Mainline to Birmingham introduced in September 2011. What is even more extraordinary is that HS2 Ltd say the exclusion does not make any difference as their model does not take different prices on different rail routes into account.  With Evergreen 3, a third cheaper and only 6 minutes slower than WCML, it has been successful in attracting custom, including away from WCML. The Public Accounts Committee just 2-weeks ago said HS2 had used ‘unrealistic assumptions about ticket prices’ and should redo their figures.

Rail magazine (Rail 700) announce Alstom’s plans for taking 50 mins off the London to Edinburgh times by using Pendolinos and ERTMS on East Coast Main Line so trains can reach 140mph. This is a comparable journey time saving to what HS2 promises, that also uses ERTMS (in cab-signalling) technology.

For more information please contact: Hilary Wharf   Tel: 07763 050 111  Email:  hilarywharf@HS2actionalliance.org