The Corner

Britain’s $125 Billion High-Speed Rail Project

From my country of birth, news of a high-speed rail project that makes California’s look well-planned and economical:

The planned high-speed rail line connecting London and northern England may cost as much as 80 billion pounds ($125 billion), more than projected by the government, according to the Institute of Economic Affairs.

Lobbying from local officials for new links to the line, known as HS2, and changes to the route due to opposition from residents will probably add about 30 billion pounds to the project’s total cost, the institute will say in a report to be published tomorrow. The government now estimates expenses at 42.6 billion pounds, according to the report.

I was following this project before I moved to America, and the initial estimate — which was attracting serious opposition — was $20 billion. Since then we’ve seen a four-fold increase in the “as much as” cost, as well as the addition to the project of a “Phase Two.” Per the New York Times:

Phase one of the project would link London to Birmingham, with trains making the journey in 49 minutes. Work is to start in 2017, with trains running by 2026. The cost ceiling is £21.4 billion at 2011 prices, though the target is to spend just £17.16 billion.

It currently takes about one hour and 25 minutes to get from London to Birmingham. At a cost of $32 billion at the very least, this will cut 35 minutes from that time. That’s $1 billion per minute.

Under phase two, for which an additional £21.2 billion has been budgeted, HS2 would split into two branches, with one branch going northwest to Manchester. Trips there from London would take just 68 minutes.

There honestly is no chorus of people in London complaining that they can’t get to Manchester fast enough. But even if there were, the notion that it makes economic sense to shave off a few minutes from the journey is anachronistic, and based on the claim that reducing travel time is important because people are unable to do any work on trains. As a member of parliament, Cheryl Gillan, noted in the Telegraph,

the Department for Transport has clung stubbornly to a decade-old report that assumes all time spent commuting on trains is wasted. In fact, the assumption that business people do no productive work when travelling by train has been a key justification used by the promoters of HS2.

Perhaps the most damning opponent of the project is Peter Mandelson, the former business secretary. In a rare moment of blunt honesty, Mandelson recently

wrote that Labour’s backing for the project in 2010 was a “politically-driven” decision intended to “paint an upbeat view of the future” following the financial crash. But his opinion shifted as the “understanding of the costs and benefits” changed. The original cost estimates were “almost entirely speculative”, he admitted. “Perhaps the most glaring gap in the analysis presented to us at the time were the alternative ways of spending £30bn.”

Doesn’t that sound familiar? Meanwhile, the Conservative government, which is backing the project, continues to go around the country making the case that Britain has no money and must cut the budget.


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