Posted 18th April 2018 | 11 Comments

Fears grow over true cost of HS2

TRANSPORT secretary Chris Grayling is being urged to commission an independent report about the costs of HS2 from the Infrastructure Projects Authority. Critics are increasingly voicing fears that official estimates are seriously flawed, even allowing for a 35 per cent contingency allowance, because the full scope of the work is still unconfirmed.

Tony Berkeley, a consistent critic, is claiming that experience with the spiralling costs of electrification has cast the official HS2 calculations increasingly into doubt. He is supported by consultant quantity surveyor Michael Byng, whose methods of forecasting the budgets needed for major projects have won increasing respect within the industry, particularly after he created the method now used by Network Rail to cost its projects in the wake of major overruns.

Mr Byng has prepared a 4000-page document analysing the costs of HS2. After his advice had been requested by the Department for Transport, he concluded that the true cost of Phase One between London and Birmingham is likely to be at least £50 billion, compared with the latest official figure of £24.3 billion. This includes a one-third contingency allowance but not the cost of new high speed trains. The cost of the whole scheme, including the extensions to Manchester and Leeds, is now said to top £100 billion.

Last summer, Mr Byng told the Sunday Times: “Michael Hurn, the project sponsor at the DfT, is a very good guy and is very worried at the advice he’s been given [by HS2]. The big contractors are also worried. They’ve said when they submit a bid it’s nowhere near [as low as] the estimates that HS2 have got for the job.”

Chris Grayling has refused to share details of cost estimates on the ground of commercial confidentiality. Lord Berkeley said: “I agree that it would be imprudent for HS2 Limited to share its cost estimates in advance of the agreed final target price in 2019, but I am sure you will agree that the estimates and target costs should fall within a realistic budget.”

In his latest letter to Lord Berkeley, Mr Grayling says: “As you know from previous correspondence on this issue from both Lord Ahmad and Paul Maynard MP, HS2 Ltd and the Department do not agree with the cost, schedule and engineering assertions made by Michael Byng. The Phase One funding envelope (without rolling stock) is £24.3 billion.”

Lord Berkeley remains unconvinced. He has told the transport secretary: “The amount of contingency allowed at different stages of a project must reflect the amount of detail available in the design at that time, if significant cost overruns are to be avoided. My worry is that the scope of the work should have been known at this stage in sufficient detail to be able to provide a reasonable cost estimate … the evidence we have heard not only from contractors and local authorities but also from HS2 people themselves clearly points to a serious lack of understanding of the final scope, let alone the costs.

“Under these circumstances, I believe it would be sensible for you to commission an independent report from the IPA to examine these issues before it is too late to make changes.”

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Jez Milton, Manchester

    Just get on with building the thing! What are HS2 and its contractors messing about at? The only place anything is visible is Euston, and even there it just seems roads have been closed and buildings made empty.

  • John, London

    The early 1980s tilting APT were designed to run at 155mph and reached 162mph on existing British track, and was designed to increase speeds on existing curves by 40%. It was primarily designed for the west coast main line which even today takes twice the traffic of the much straighter east coast main line. The west coast mainline was inferior in the early 1980s to what it is today.

    The west coast main line does have clear bottlenecks on the most used sections south of Preston to London. The Norton Bridge Junction improvements dropped the London-Liverpool times below 2 hours. These bottlenecks can be removed, without a great amount of money being spent, increasing the capacity and speed of trains. To the point the latest tilting trains, Alston say they have a 186 kph train, will be running at far higher speeds than the paltry 125mph we have now.

    - Liverpool/Manchester-London can be 1 hr 10-15 mins by:
    - Removing bottlenecks on the west coast mainline, making
    flying junctions and 4-track to Weaver Junction.
    - 4-tracking Winsford to Weaver junction
    - Improve the line to Liverpool from Weaver Junction;
    - Introducing the latest tilting trains;
    - Introducing the latest signalling systems.

    London to Liverpool/Manchester will be a time of around 1 hr 15 mins. That is not short of HS2 and with little outlay to achieve that.

    The east coast main line is pretty straight and times to Leeds would also be similar to HS2.

  • Andrew Hardy, Leeds

    There is a another problem on the horizon for HS2. If you live in the North, you've been told that HS2 will re-balance the economy and stimulate the "Northern Powerhouse". If you live in London, you've no doubt read Lord Adonis' speech on HS2 "Golden Arrow to London" where he unashamedly explains that HS2's primary purpose is to allow skilled jobs from the North and the Midlands to be sucked into London via commuting. So Grayling and HS2 have to throw as much money into it as quickly as the can to make sure that by the time the regions realise they've been had it will be "too late to stop it".

  • John B, Woodford Halse

    Far better to "pause" HS2 and get on with building what is really needed, i.e. better links in the north (HS3). Seems to me that HS2 is driven more by dogma than necessity.

  • Chris Neville-Smith, Durham

    "Since HS2 HAS NEVER BEEN JUSTIFIED AS AGAINST continuation of the existing systems in operation"

    Every business case for HS2 (and every rail project) compares services with the new infrastructure compare to those without. That's what "Do Minimum" versus "Do Something" is about. Read it and tell us why they got it wrong if you want, but it is incorrect to say that HS2 has never been justified against carrying on with the existing services.

  • Windsor Alexander Thomas, Buckland Common, Tring, Herts.

    Following the announcement of HS2 by the Government, I opposed HS2 for 3 years until I became convinced that the Government was bloody-mindedly hell-bent on doing it. My own money-of-the-day forecast for HS2's design, construction and start-up costs in £'s of the day remains at £150 Billion, until start-up is achieved. Lifetime operating costs will be another £350 Bn, over the 70 year period for which HS2 Ltd's operating forecasts were made. Since HS2 HAS NEVER BEEN JUSTIFIED AS AGAINST continuation of the existing systems in operation, I fully expect that HS2 will run into the buffers and be scrapped within a decade of its starting operational service.

  • Chris Jones-Bridger, Buckley

    After the revelations regarding the decision making regarding the cancellation of electrification projects it is imperative that the government is open & transparent regarding the costs of HS2.

    When initially promoted it was as a stand alone infrastructure of national importance and independent of investment decisions for the classic network. Following the completion of Crossrail it was sen as a natural progression for the engineering expertise released. Also funding was seen as separate from the budget for day to day rail operation and investment. It is clear from the reasoning for cancellation of MML electrification that HS2 is having an increasing influence over decisions for the classic network. As ever in railway investment the DfT is beholden to the constrains imposed from the Treasury.

  • Denis Howroyd, Amersham

    If and when the HS2 trains start to run, from London to Birmingham, anyone concerned could refer to my warning. It was in the December 2016 magazine of the professional electrical engineers (IET). They’d see that these trains are likely to overheat large motors used in industry. Anyone can ask for a recording of the 3-phase voltage to see whether the safe limit is being exceeded. If it is then the trains would be banned, and countless £billions wasted. National Grid say their prediction of this effect is confidential. They should publish it in the IET library. Otherwise the electrifying should be abandoned now in view of the risk to other consumers.

    Denis Howroyd CEng MIET

  • Melvyn, Canvey Island, Essex

    These anit HS2 brigade simply won't accept that HS2 is actually being built and as for comparisons with Electrification well much of the cost increases arise because poor knowledge of routes particularly the GWR meant the HOPS system which was expected to cut costs and speed electrification kept coming across unknown cables etc thus making progress far slower and thus more expensive. This won't apply for most of HS2 as its a brand new railway just like HS1 was and thus it will be built on a clean route .

    Oh when we build motorways we don't count the cost of cars and lorries that will use the motorway and same applies to a new railway. Although cost of first tranche of trains built to classic Compatible gauge has been agreed by the DFT but still comes within overall budget for HS2 .

  • david c smith, Bletchley

    I'm not anti - HS2, but have thought for some while it is projected for the wrong route. There has, to my knowledge, always been a poor benefit / cost case from its inception. Benefit is limited as Birminham and Manchester are already well within day - return times from London, whilst costs , which involve two long, wide - bore high speed tunnels, building the new line through a part of England with relatively dense and high value housing and the works in / around Euston, are high. Qouted per - mile costs are around three times those of French LGV.

    The Scottish Central Belt and Northeast England, however. could experience a " sea change" of new day - return opportunities if the ECML were to be the basis for HS2. The per - mile costs would likely be significantly lower, and probably a mix of new 200mph LGV type cut - offs , totalling around 200 miles, together with upgrading ( mainly the signalling ) the remainder for 140 mph would altogether cost less than half the current project. Centres in Yorkshire could aslso reap some more modest benefit. And, of course, this would give extra capacity too, as with the current scheme.

  • Chris Neville-Smith, Durham

    Maybe I'm getting knee-jerk dismissive over all these claims, but after so many so many contradictory arguments have been made on these claims, which go on to be debunked, it's getting to the crying wolf stage.

    My immediate cause to be sceptical is that this appears to be based on electrification instead of new builds. The electrification woes simply reinforce the long-standing observation that upgrading existing infrastructure whilst keeping it running is a nightmare. The closest precedent to HS2 is Crossrail, which was a completely new build on a comparable budget, and that broadly stayed within budget.

    Also, even if he's right, that will also apply to conventional upgrades. Unless we want to swtich to the Green Party's solution of basically doing nothing about people unable to get from A to B, I don't see what this changes.