To get HS2 to work properly, it would cost £237bn. Here’s the maths.

Last week, Tony Berkeley told Adam Boulton that to do HS2, and all the things that you’d need to go with it to make it work and deliver on (some of) the promises being made by proponents, the cost would actually be £237bn. Here’s the maths.

This table has been prepared by Micahel Byng, who wrote the standardised way of costing rail projects, which of course was not originally used to come up with the costs for HS2. He said:

“The figures quoted in the table are taken from established published sources and accepted estimates. The difference between the total of the table, £231.79 bn, and the figure mentioned in the interview this morning is the allowance for new traction and rolling stock in the Northern Power House Rail and Midlands Connect Areas, which is £5.22 bn, making a current cost total of £237 bn.”

Item Description Sub total Cost
£/bn £/bn
1 Independent Estimate of the Cost of Construction of the entire HS2 Project, Phases 1, 2a, 2b (East) and 2b (West) at 4th Quarter 2015 prices (ONS Output price Index = 100.10 ) 107.92
2 DfT Estimate of cost of Traction and Rolling Stock at 4th Quarter

Midlands Rail Programme prices;  (ONS Output price Index = 100.10 )

3 Capital cost of HS2 complete at 4th Quarter 2015 Prices 115.84
3a Inflation calculated on Office for National Statistics Indices to 3rd Quarter 2019; Index = 110.90 12.50
4 Capital cost of HS2 Project complete with trains at current prices 128.34 128.34
5 Capital Cost of HS2 Connecting Services per Sir John Armitt, “Infrastructure Intelligence” 6th August 2018;  (ONS Output price Index = 107.50 ) 43.00
5a Inflation Allowance 2018 to 2019 1.36
6 Capital cost HS2 Connectivity per National Infrastructure Commission at current prices 44.36 44.36
7 Capital Cost Northern Power House Rail Programme, BBC News 15th August 2019;  (ONS Output price Index = 111.20 ) 39.00
7a Inflation Allowance  2nd Quarter to 3rd Quarter 2019 -0.11
8 Capital Cost Northern Power House Rail Programme, current prices 3rd Quarter 2019 38.89 38.89
9 Capital Cost Midlands Connect Rail Programme; September 2019; (ONS Output price Index = 110.90 ) 20.20
9a Inflation Allowance 0.00
10 Capital Cost Midlands Connect Rail Programme; , current prices 3rd Quarter 2019 20.20 20.20
11 HS2 Entire project, connectivity, Northern Power House Rail and Midlands Connect Rail; current prices 231.79

Mr Byng continues:

“The point Lord Berkeley tried to make during the Lords Hearing and since is that the total cost of all the promises and requirements for rail improvement work offered by HS2 and its connections is £237 bn, at 3rd Quarter 2019 prices. If the Chancellor of the Exchequer has those funds available then all can be delivered. If he does not have the total sum required or does not want to commit to rail investment then choices have to be made.”

“With respect to he West Midlands Mayor, Andy Street and his advisors, and his contemporary in Manchester, Andy Burnham, if the total funds are not available, then choices have to be made. This was the question put, repeatedly, to Maria Machancoses, Midlands Connect, and Barry White, neither of which offered any answers. Perhaps the same question should be put to Messrs Street and Burnham.”

Additionally, as part of the project fear that has been orchestrated by the lobbyists scared their gravy train is going to derail, it’s been recently suggested that it would cost £12bn just to cancel. Obviously there has been no indication as to how they got to that number. The real figure is closer to £3bn. Again, Michael Byng explains the maths:

“The other point which was not covered in Adam Boulton’s interview with Tony Berkeley was the costs to date of the HS2 Project which would be lost if it was cancelled. To make the calculation, one has to begin with the amounts accepted as spent of committed to date, which I understand from Parliament if £8.75 bn. On that basis by subtracting the costs of works that can be incorporated into the Network Rail system or recovered by sales, is shown below.”

Item Description Sub total Cost
    £/bn £/bn
1 HS2 Project Cost incurred to date; “Evening Standard” January 2020   7.50
2 Claims arising from supply chain contract cancellations   1.25
3 Capital Cost incurred on HS2 Cancellation   8.75
4 Reuse of land created on the Down Side at London Euston Station reused for new platforms for Chiltern line Electrification 2.05
4a Reuse of tunnelling preparatory work and design work London Euston to Old Oak Common 0.57
5 Capital Cost of HS2 Works at London Euston reused 2.62 -2.62
6 Reuse of land created at Birmingham Curzon Station site 0.88
6a Reuse of design work for Birmingham Curzon Station for conventional rail 0.44
7 Capital Cost of HS2 Works at Birmingham Curzon reused 1.32 -1.32
8 Land acquired by Compulsory Purchase for HS2 Limited; returned to the market by the “Crichell Down” rules on land ownership or sold off at “Open Market Value 1.77 -1.77
9 Capital Cost Net Loss to the Exchequer due to HS2 Cancellation   3.04
5 comments to “To get HS2 to work properly, it would cost £237bn. Here’s the maths.”
  1. The cost is not only financial.
    The gain in environmental protection – especially our Ancient Forests – has not been mentioned when considering cancellation.

    • Following the recent 2 storms, I wonder how much of the proposed line will suffer from flooding and how much longer and how much extra cost will be added as a result. If tunnels are to be built the they will no doubt be at risk of flooding and so trains will be delayed on this white elephant of a project.
      Has StopS2 looked into the potential risks that will occur from the now frequent floodings that are hitting the UK and will doubtless get worse?

  2. Pingback: STOP HS2 | New alternative railway proposals instead of HS2

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