Official HS2 costs have gone up, but who knows where to.

Documents seen by the Independent on Sunday have confirmed an increase in the cost of Phase 1 of HS2. Up to now, the cost of the project from London to Birmingham has been officially stated as £21.4bn, but they are now “approaching £30bn” according to official documents HS2 Ltd submitted to the Treasury ahead of the Comprehensive Spending Review. When HS2 was first announced, the official cost for Phase 1 was budgeted to be £15.8bn.

Until now, with Phase 2 projected to cost £21.2bn, the official budgets for both phases of the project including contingency was £42.6bn, rising to £50.1bn when the cost of the trains are added. These costs, which were announced in 2013 but set on 2011 prices remain the official costs of the project. However estimates from sources close to Government now say the cost is “Likely to be £70bn to £80bn”, over double the £30bn the network was meant to cost when announced in 2010. This is in line with the £73bn it was reported the Treasury thought the cost of HS2 was in 2013.

It is claimed the increase in ‘out turn costs’ takes account of the rising cost of construction. However, besides shortages of building materials, wages in rail industry construction have increased 74% in just three years, which does not seem to be adequately reflected in the cost increase.

Despite this significant increase in costs, the Government are still claiming the benefit-cost ratio, which has been widely criticised by economists for adding in unsubstantiated benefits, will stay around the 2 to 1 mark.

Whilst the taxpayer is now expected to foot an increased bill for HS2, it has also been claimed the Government is already preparing the ground for a private operator to run the trains, meaning like with HS1, it could most likely be sold off at a significant loss. There are suggestions that HS2 Ltd themselves are already considering foreign buyers.

Stop HS2 Campaign Manager Joe Rukin responded:

“These figures show that since HS2 was first announced in 2010, there has been more than a doubling of the costs. With trains not due to run for over another decade, who knows where the cost of this white elephant will end up. A responsible chancellor would be asking serious questions about whether it is really worth it, but instead Mr Osborne is cooking the books to invent benefits which simply aren’t there to make HS2 look more palatable, at the same time as drawing up plans to flog it off the private sector at a fraction of the cost. If HS2 was really worth it, investors would be lining up to build it. The fact they are not shows this is nothing more than a vanity project, the costs of which will continue to spiral.”

Penny Gaines Chair of Stop HS2 added:

“It’s no surprise that Government is are working on increased cost.  The supposedly generous contingency is being eaten up by costs that should have always been included, Euston is an expensive problem that HS2 Ltd have effectively given up on, and parts of HS2 are being ditched at every turn.”

 “What is really surprising is that the benefit cost ratio stays so high, despite an increase in cost.  For HS1, the actual costs of building it turned out to be twice the benefits.  And the recent report into the economics of HS1 was so desperate to find something good to say they resorted to the line that people’s assumption that HS1 had economic benefits was a benefit in its own right.”

8 comments to “Official HS2 costs have gone up, but who knows where to.”
  1. Just after the war Great Britain built it self up with the best health service the best police force the best army the best boarders control now l ask myself it’s not the people of our country which have caused the mess we are in its all the governments in the past just looking after there own intrests and waisting billions of £ on projects like Concorde hs2 etc it’s about time they should take control of there actions and look after and build our country to be great again

  2. I read in the mail that the Swiss have designed double decker train coaches which can cope with our low bridges and give twice the capacity .So why are we spending billions on hs2 that no one wants and will never run at full speed when we could solve our capacity problems over night with these coaches .or is the real fact that to many of our leaders have to. Much to loose for themselves to make a fast buck

    • A very interesting disclosure,Davis; i should love to know the ORIGINAL source of this story.

      Perhaps the Swiss were expecting to accommodate Gnomes- of Zurich?-who would not require so much headroom as the rest of us.
      More than once I have banged my head while getting up from my seat inside an ‘Elefant’ double decker -and this despite the generous size of the continental ‘structure gauge’ which permits taller and wider carriages.

      As a matter of fact, as the ‘Mail’ should have known, if they had checked, over sixty years ago,in about 1950, a couple of sets of double deck coaches were built for the overcrowded Southern electric (third rail) routes into London.
      But they were soon withdrawn. They were just too cramped- and abve all, they took so long to load and unload at the frequent commuter stops that any small benefit in terms of passenger capacity was more than cancelled.
      (Two of these coaches survive in preservation,as curiosities)

      Double deck does not double passenger capacity, even when it is practical. Why? because the extra staircases and vestibules take up so much space within the coaches.I guess that 30-50% is the maximum that could be hoped for.Also,unlike in Britain,platform heights in mainland Europe vary and are generally lower than in the UK, so that lower deck saloons can be hung closer to the rails and still not strike the platform edge.

      Size does matter-unless one is contemplating rebuilding the entire network; station platforms, tunnels road bridges, lineside equipment…
      Just providing for overhead electrification is challenging- and expensive- enough; while attempting to keep the trains running on the existing lines.

      I think that, once again, one should take this (any? ) story in the ‘Mail’ with a very large pinch of salt.

      • To be fair, this proposed design is aimed specifically at the UK market. The design looks innovative and utilises the space routinely reserved for traction equipment in an attempt to overcome the natural constraints of UK gauge dimensions.

        That said, I too have profound doubts about its potential efficacy. No amount of clever design can overcome the physical limitations imposed by UK gauge – for example it may be possible to improve the efficient use of space top to bottom but it cannot overcome side to side space restrictions.

        This design is only on the drawing board at present – there isn’t even a full size mock up developed, which would be mandatory if the possibility of taking the idea any further was even to be considered. Even if it makes it that far, we’re talking about many years if this design is to make it to production and the real world

        I don’t think this idea will progress – I think it’s a non-starter but of course the Mail has seized upon it now in an attempt to muddy the waters of HS2 debate.

        You can find out more info at the following URL

  3. you will find in last week’s hansard – written answers that the cash cost of HS2 until September end 2015 from 2009 stands at 1.25 billion pounds. reply by minister of transport.
    How much more?

  4. Surely when this is linked with the cuts our police forces are facing,the ever increasing funds required for the nhs and crisis in elderly care,the Treasury must stop this blatant misuse of our money!

  5. Smaller would have been better than the big, bigger biggest and awesome approaches from Blair to Brown to Hoon to Adonis to Hammond to Greening to McLoughlin to Cameron and Osborne and Rudd and their special advisers and Senior Civil Servants. What a failing state of affairs the UK finds it self in. Insufficient money, houses/flats, motorways, seats on the London underground. In overstretch on spending deficits and population interlopers. Weak on management of problems, NHS and Benefits. Over reach on Legislation. Unprotected from European surges in taxi drivers, cafe and coffee bar servers and from electricity power demands this Christmas and unable to stop the decline and slide into more discontentment of its voters for all parties. Would suggest it is more than Euston we have a problem it is daily we have more problems. In the quaint Select Committee room the few MPs and civil servants, lawyers waffle on whilst the nation suffers the blight of HS2 and the wrong HS2. Cameron, Osborne and Adonis long lost touch with reality and Adonis looks to con cities of the North for contributions to the mistaken belief high speed rail has answers to the current and growing inadequacies of populations of people and motor vehicles outstripping the road and motorway space and the space to put new infrastructure. Cameron got the idea of the Big Society very wrong the PR man had no delivery only message. Osborne had no money only the tapping into loan sharks from overseas with vested interests. Please get real Senior Civil Servants, and MPs and those in the Lords that take but do not show the courage of scrutiny by pontification and self interests. Time for the UK to listen to Nigel Lawson’s messages that the UK has lost sight of ambition,. Measured ambition to self govern within its land space, borders, means and abilities. HS2 will give way to common sense soon and the £80 Billion the nation cannot afford on this gravy train has to be concentrated into power generation and into practical methods not pie in the sky false idols please. Hoping the next petitioners start to explain to the Select Committee it is not about their personal compensation but about policy choices of which this HS2 is and was always a gross ingulgence that would not have been contemplated 150 years ago or since as it fails to provide the very object of rail travel economically for many.

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